M1 downgraded to "hold" by DBS Vickers; $4.05 target intact

Stock Name: M1
Company Name: M1 LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 4.05

SINGAPORE (April 14): DBS Vickers has downgraded M1 to "hold" from "buy", citing limited upside to its $4.05 price target.

The company's 1Q2015 earnings of $45.7 million (up 6.8% y-o-y) were in line with expectations, but its share price is likely to trade in a tight band until there is clarity on whether Singapore will have a fourth mobile operator, according to DBS Vickers analyst Sachin Mittal.

M1 downgraded to "neutral" by CIMB; $3.80 target intact

Stock Name: M1
Company Name: M1 LIMITED

Research House: CIMB

Price Call: HOLD

Target Price: 3.80

SINGAPORE (April 14): CIMB has downgraded M1 to "hold" from "add", saying the stock's current valuations are fair with the company's enterprise value at 16.2 times its operating free cash flows.

CIMB's price target of $3.80 is intact.

Following a q-o-q decline in its 1Q2015 revenue, M1 should benefit from an average price hike of $2 to $3 for its monthly post-paid plans, as well as from additional data usage revenue as subscribers move to tiered pricing plans, CIMB analyst Foong Choong Chen wrote in a note.

M1 cut to "hold", target reduced to $3.65 by Maybank Kim Eng

Stock Name: M1
Company Name: M1 LIMITED

Research House: Maybank Kim Eng

Price Call: HOLD

Target Price: 3.65

SINGAPORE (April 2): Maybank Kim Eng has downgraded M1 to "hold" from "buy" and cut its price target to $3.65 from $4.24.

M1 is the most vulnerable to new competition in Singapore's mobile market, with 20% to 30% of its mobile revenue at risk in the worst-case scenario, according to Maybank Kim Eng analyst Gregory Yap.

"If and when MyRepublic enters the market as a fourth operator, it is likely to target M1's subscribers as the lowest-hanging fruit," he wrote in a note today.

M1 started at "buy", $4.50 target by Deutsche Bank

Stock Name: M1
Company Name: M1 LIMITED

Research House: Deutsche Bank

Price Call: BUY

Target Price: 4.50

SINGAPORE (Feb 24): Deutsche Bank has started coverage on M1 with a "buy" rating and price target of $4.50.

"M1 offers the cleanest exposure to the Singapore mobile market, which we view as attractive compared to fixed-line," Deutsche Bank analyst Srinivas Rao wrote in a note.

"We believe M1 has an opportunity to make modest market-share gains without attracting a strong response from Singtel or Starhub," he said.

M1 kept at 'Add' with unchanged price target of $3.80 by CIMB

Stock Name: M1
Company Name: M1 LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 3.80

SINGAPORE (Jan 20): CIMB is maintaining "Add" on M1 Limited with an unchanged target price of $3.80.

In a Jan 19 report, analyst Foong Choong Chen said M1 should benefit from the $2-3 price hike across postpaid plans, excess data usage revenues, and given its expansion into fixed services.

M1's 4QFY14 core net profit came in flat q-o-q as revenue growth was offset by seasonally-higher handset subsidies.

Mobile service revenue grew 2.7% q-o-q due to higher data usage and postpaid subscribers re-contracting into higher-priced plans that were launched in Sept 2014.

M1 kept at 'buy' with $4 target price by UOB-KayHian

Stock Name: M1
Company Name: M1 LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 4.00

SINGAPORE (Dec 4): UOB-KayHian is reiterating its "buy" call on M1 Limited with a price target of $4.

In a Dec 4 report, analyst Jonathan Koh expects pent-up demand from customers who were waiting for the larger form factor offered by iPhone 6 and 6 Plus to be unleashed and the alleviation of supply constraint to produce positive net addition for the telco in 4Q14.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: M1
Company Name: M1 LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 3.70

Market Compass

11 December 2013~ Good Morning Singapore!

Singapore Idea Snippets:

11 Dec 2013 ~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day : Those who deny freedom to others deserve it not for themselves. - ABRAHAM LINCOLN Singapore: The Day Ahead SINGAPORE DAYBOOK :Stable bottom line for local telcos next year PROFITABILITY for the telco sector in Singapore is set to remain stable, with data revenue cushioning the bumps on the road ahead, according to the Fitch Ratings 2014 outlook report for telcos in the region. While revenue from text messages and international service will fall, a 20 per cent increase in mobile data revenue will offset the declines, resulting in a flat topline for the industry. "Data revenue will increase as a greater portion of users move to tiered data bundles, currently around 25-30 per cent of the overall subscriber base," the report said. "The data pricing structure has improved as customers now have to pay for incremental data use above 4 gigabytes (GB) per month; previously, users had a fixed monthly allocation of 10GB.". (Source: The Business Times) MARKET SCOOP Lum Chang incorporates two subsidiaries; buys UK property Far East Organization unit tops bids for Gambas Crescent Parcel 3 S'pore market offers 'safer path to growth' : Credit Suisse No TPP breakthrough after all, ministers to try again next month (Source: The Business Times) NOMURA Securities says ... M1 | BUY | TP: S$3.70 M1 will double its excess data usage charges from SGD5.30 to SGD10.7 per month per GB from 1 January 2014 Also for excess outgoing local voice calls, there will be a minimum one-minute charge and they will be billed per second thereafter At face value, the data re-pricing could boost revenues and EBITDA by 1-3%, but... 1) there could be some customers who may migrate to higher plans (especially if their excess usage is more than 2GB, we think customers could even become more vigilant towards their usage patterns, and cut back on usage As of Sept-13, M1 had 32% of its post-paid subs on tiered plans (or 322k subs), and around 16% were exceeding data bundles (or 52k subs) This is yet another attempt by the Singaporean operators to reprice data up, which is a positive for ARPUs SingTel also doubled its excess usage charges in September this year We maintain Buy on M1 - it is a simple story with simple catalysts There is a lot of focus on ARPUs since the operators moved away from 12GB to tiered pricing plans At a reported level, we haven't seen much improvement yet but a majority of this is attributed to falling roaming rates, which are still around 10-15% of wireless revenues we understand We think the Singaporean telcos missed out on a perfect opportunity to increase the base-line prices for all plans when 4G/LTE was launched - initially the operators intended to charge another SGD10/mth for 4G VAS, but it was waived during the promotion period, which seems to be continuing still This could potentially be introduced, and may provide a further boost to ARPUs Valuation Methodology Our DCF-based target price of SGD3.7 uses a WACC of 7.3% and terminal growth rate of 2%, with cashflows discounted to FY16F The benchmark index for this stock is MSCI Singapore Risks that may impede the achievement of the target price 1) More aggressive competition in Singapore; 2) limited ability to offer fixed-mobile bundles; and 3) a macro slowdown in Singapore OCBC Securities says ... COMMODITIES | NEUTRAL | As expected, the commodities sector performed relatively poorly against the broader market for most part of 2013, after we maintained our Underweight rating from 2012 Against the STI's 0.4% showing until 6 Dec 2013, the commodities stocks under coverage fell by an average of 6% They had also fallen by as much as 19% at their lowest versus the STI's 6% slide before staging a recovery in late 2H13 Part of the recovery was buoyed by news that economies are slowly recovering, led by the US According to its latest World Economic Outlook (WEO) report out in Oct, the IMF (International Monetary Fund) now expects World Output to grow 3.6% in 2014, up slightly from the likely 2.9% growth in 2013. However, it warns that downside risks remain Some of the "fresh" risks include slowing growth in China, which may affect many other economies, notably the commodity exporters among the emerging and developing economies However, IMF believes slower near-term growth is a worth-while trade-off as there will be positive net effects in the longer term, which should lead to more stable demand for commodities While market sentiment may remain somewhat cautious until investors get a better handle on the magnitude and extent of the Fed tapering (widely expected to take place sooner rather than later), we believe that further signs of a firmer recovery in the US economy could lead investors to adopt a more "risk on" approach And with the valuations of some of the commodity plays still looking relatively inexpensive, we could see potential upgrades for some of them if there is an over-correction in the market Hence we also upgrade our rating from Underweight to NEUTRAL OCBC Securities says... MIDAS HOLDINGS | BUY | TP: S$0.64 We expect firm earnings rebound for Midas in FY14F as high speed railway (HSR) contracts roll in Midas won its first HSR contract (Rmb168m) in over two years in October, as China resumed its HSR development programme, with more likely to come We believe the Group could win a substantial order arising from the recent second rolling stock tender for 314 train sets, or about 2,500 train carriages Over the next two years, we believe a further 700 over train sets could be tendered for, resulting in further wins for Midas in the HSR segment At the same time, we expect (PRC) metro orders to continue flowing in, and overseas orders, which have grown substantially in 2013, to continue to be robust as Midas looks to maintain a more diversified earnings base Maintain BUY, with our 12-month TP raised to S$0.64 (Prev S$0.60), based on 1.2x FY14F P/BV We believe current valuations are attractive for a stock whose earnings are poised for a strong rebound into FY14F and FY15F

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: DBS Vickers

Price Call: HOLD

Target Price: 7.15

Stock Name: M1
Company Name: M1 LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 3.95

Stock Name: Kep REIT
Company Name: KEPPEL REIT

Research House: Nomura

Price Call: HOLD

Target Price: 1.21

Market Compass

17 October 2013~ Good Morning Singapore!

Singapore Idea Snippets:

17 Oct 2013 ~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :One has to grow up with good talk in order to form the habit of it. - HELEN HAYES Singapore: The Day Ahead SINGAPORE DAYBOOK : Senate deal struck to avert default. Dow rises 1.3% at midday as US crisis nears end. [WASHINGTON] Senate Majority Leader Harry Reid said yesterday that a deal had been reached with Republican leaders to end a fiscal impasse that has threatened the United States with default. Mr Reid, speaking from the Senate floor, said that the agreement called for reopening the federal government with a temporary budget until Jan 15 and to extend US borrowing authority until Feb 7. Stocks soared as the crisis that has gripped Washington for weeks appeared to be nearing its end. Republican Senator Kelly Ayotte said that the House of Representatives might vote first on the plan to speed its way through Congress and put it on President Barack Obama's desk for signing before today's midday default deadline. The Dow Jones industrial average spiked 200 points, or 1.3 per cent, to 15,370 in midday trading. The crisis began on Oct 1 with a partial shutdown of the federal government after House Republicans refused to accept a temporary funding measure unless Mr Obama agreed to defund or delay his healthcare overhaul law. It escalated when House Republicans also refused to move on needed approval for raising the amount of money the Treasury can borrow to pay US bills, raising the spectre of a catastrophic default. Mr Obama vowed repeatedly not to pay a "ransom" in order to get Congress to pass normally routine legislation. (Source: The Business Times) MARKET SCOOP Keppel Land Q3 net profit jumps 70% to $126.4 million UniSIM to host third law school Keppel T&T Q3 profit up 4.2% Sky Vue top selling project in Sept RH Petrogas starts drilling of Klagalo-1 well in Indonesia ST Engineering secures S$600m of aerospace projects in Q3 Loyz Energy to issue 50m new shares at 35 cts/shr OCBC not seeking compensation from SingTel (Source: The Business Times) DBS VICKERS Securities says ... SINGAPORE EXCHANGE | HOLD | TP: S$7.15 Daily average trading volumes have remained high (3Q13: 3.6bn) amid the strong market activity for small cap stocks during the quarter The value-to-volume ratio has dropped further to S$0.37 compared to S$0.54 the previous quarter As a result, average trading value for 3QCY13 declined 18% q-o-q to S$1.3bn (2Q13: S$1.6bn) On a positive note, the proportion of capped trades (> S$1.5m) has declined to 35% (2Q13: 41%), providing support to average trading value Compared to HKEX and Bursa, SGX generates a higher proportion of its revenue from derivatives - 29% as at 2Q13 (Bursa: 16%, HKEX: 20%) This has helped SGX keep revenues strong Derivative activities for SGX have been picking up strongly over the past 4 quarters However, we expect a slight softening this quarter as derivative volumes declined by 17% q-o-q, largely from the Nikkei 225 Index Futures Although open interest rose 3% q-o-q, we do not believe this will be sufficient to offset the volume decline We estimate total revenues to drop by 10% to S$182m, expenses to remain stable at S$81m, and net profit of S$84m for the quarter Base DPS of 4 S cts is expected to be declared, similar to previous quarters Maintain HOLD, S$7.15 TPbased on DDM implying 23x FY14F EPS Downside to the stock price should be limited, supported by dividend yields of 4-5% based on a 90% dividend payout assumption Our forecasts are marginally tweaked and we introduce FY16F numbers Comparatively, our BUY recommendation for HKEX is on expectation of improving trading values, revival of IPO activities and improving LME profitability while for Bursa, we see upside from structural changes over time We see limited catalysts for SGX given soft trading values ahead. 4QCY13 is typically a slow quarter Possible revival of trading activity in 1QCY14 may add traction UOB KAY HIAN says ... M1 | BUY | TP: S$3.95 M1 reported a net profit of S$39.5m for 3Q13 (+19.4% yoy), in line with our expectations M1 added 9,000 post-paid subscribers while post-paid subscriber base expanded 4.4% yoy Post-paid ARPU declined by a marginal 0.8% qoq to S$61.80 due to lower roaming revenue The proportion of post-paid subscribers on tiered data plans has expanded from 26% in 2Q13 to 32% in 3Q13 Mobile data accounted for 29.7% of service revenue (3Q12: 24.3%) M1 added 10,000 fibre broadband customers with a higher adoption of mass-market plans The pace of activation appears to have improved. ARPU declined 2.3% qoq to S$46.20 M1's net debt/EBITDA was only 0.6x in 3Q13, vs 0.8x last year It generated free cash flow of S$79m in 9M13, +12.2% yoy Management will review the possibility of capital management exercise in 4Q13 Management maintained guidance of a moderate growth in earnings for 2013 Capex is expected at S$130m M1 will complete network enhancements in 4Q13, including: a) deploying a nationwide 3G radio network on 900MHz spectrum, and b) upgrading its core infrastructure to an all-IP core network, which supports dynamic allocation of resources involving pooling of mobile switching centres and customer databases M1 launched internet TV service MiBox in Jul 13 Management did not disclose the size of its subscriber base for pay-TV but expects to start the cross carriage for exclusive content, such as Barclays Premier League (BPL) matches, in mid-14 We like M1 as it is the largest beneficiary of the migration to tiered data plans as mobile accounted for 78.3% of service revenue in 3Q13 M1 has strengthened its ability to bundle multiple services with the addition of fibre broadband and pay TV services We maintain our earnings forecasts Our target price is S$3.95, based on DCF (required rate of return: 6.7%,terminal growth: 1.0%) Evolution into a triple-play telco encompassing mobile, fibre broadband and pay-TV services Special dividend could provide a positive surprise NOMURA Securities says... KEPPEL- REIT | NEUTRAL | TP: S$1.21 KREIT reported its 3Q13 results on 14 October after the market closed 3Q DPU of 2Scts (+0.5%y-y; flat q-q) met 24.9% of our full-year forecast of 7.9Scts Higher-than-expected income support and lower-than expected tax expenses helped offset higher-than-expected interest expenses and lower-than-expected contribution from associates KREIT's aggregate leverage was 43.9% as of end-September (vs. 44.2% as of end-June) Refinancing has been secured for the SGD282mn and SGD60mn in borrowings due in FY14F and FY15F respectively, which will increase KREIT's weighted average term to expiry for its debts to 3.8 years (from 3.6 years) It remains our view that management's near-term focus will remain on capital management On our estimates, same store NPI (SSNPI) grew 5%y-y in 3Q13 (vs. +7.2%y-y in 2Q13), underpinned by growth at Ocean Financial Centre (OFC), One Raffles Quay (ORQ) and Marina Bay Financial Centre Phase 1 (MBFC 1) Committed occupancy at KREIT's Singapore portfolio increased slightly to 99.5% as of end-September (from 99.2% as of end-June), principally driven by improvements at ORQ (100% from 99.8%) and OFC (98.8% from 97.9%) We reiterate our Neutral rating on KREIT. At FY13F yield of 6.3% (implied spread 3.9pp, vs the stock's own trading historical average of 4.8pp and office REITs' blended historical average of 3.9pp) and multiple of 1x the end-September book value of SGD1.25/unit (vs KREIT's trading historical average of 0.8x), we think valuation remains fair at best

SG: MARKET PULSE: M1, Tee Intl (16 Oct 2013)

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.17

MARKET PULSE: M1, Tee Intl

16 Oct 2013

KEY IDEA M1: Margins holding up in 3Q13 M1 Ltd reported its 3Q13 revenue of S$241.7m, down 5% YoY and 1.1% QoQ, mainly due to lower handset sales; but net profit rose 19% YoY and 1% QoQ to S$39.5m, aided by higher service EBITDA margin. 9M13 revenue was down 2.7% at S$729.3m, meeting around 64% of our FY13 forecast, while net profit rose 10% to S$119.7m, or 77% of our full-year estimate. Going forward, management has kept its 2013 guidance intact i.e. still expects to see moderate earnings growth; also keeps capex spending at S$130m. In light of the 9M13 results, we opt to pare our FY13 sales estimate by 8%; but we keep our earnings estimate unchanged. Our DCF-based fair value inches up to S$3.17 from S$3.10 on slightly risk-free assumptions. Maintain HOLD. (Carey Wong) MORE REPORTS TEE International: Impact from one-time expenses Tee International's 1QFY14 PATMI dipped 67.5% YoY to S$0.9m mostly due to S$1.9m in unrealized foreign currency losses and a S$2.8m spike in admin expenses. The increase in admin expenses consist of a one-time S$1.1m incentive payment to employees, S$0.7m from the newly acquired integrated turnkey material-handling subsidiary, and staff costs from a higher headcount. 1QFY14 PATMI constitutes only 4.1% of our FY14 forecast and we judge this quarter to be a miss. That said, if we adjusted for the one-time incentive payment and currency losses, core PATMI is estimated at S$5.6m which would have made up 25.0% of our forecast and been in line. Our fair value estimate dips to S$0.35, versus S$0.38 previously, as we lower our FY14 PATMI forecast down by 26% to S$16.6m. Maintain HOLD. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks tumbled Tue on signs of any progress toward a budget deal unravelling, two days before the nation is expected to hit its debt limit. - Keppel REIT posted a DPU of 1.97 S cents for 3Q13, up from 1.96 S cents a year ago. - K-Green Trust's net profit rose 7.4% to S$3.8m in 3Q13, from S$3.5m a year ago. - Nam Cheong is buying office space at Suntec Tower Three to house its Singapore corporate office for a price of ~S$30.3m. - Viva Industrial Trust, a stapled group that will have an initial portfolio of three industrial properties in Singapore valued at S$743m, is seeking to raise a total sum of about S$365m through an IPO. - Pure Beauty Investments plans to acquire Catalist-listed Singapore Medical Group for S$16.67m. - SIIC Environment Holdings is placing out 3.1b new shares to five investors including its controlling shareholder at an issue price of 8.5 S cents per placement share.

SG: MARKET PULSE: Telco, Starhub, First REIT, Yoma, M1 (30 Jul 2013)

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: SELL

Target Price: 3.82

Stock Name: First REIT
Company Name: FIRST REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.20

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.87

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.10

MARKET PULSE: Telco, Starhub, First REIT, Yoma, M1

30 Jul 2013

KEY IDEA Telco Sector: Minimal impact on SingTel SingTel will have to offer its BPL content to rival StarHub customers after the Ministry for Communications and Information (MCI) rejected its appeal for a stay of the Media Development Authority (MDA) ruling for the cross-carriage of the closely followed football content. However, the subscription comes with a price - new subscribers will have to fork out S$59.90 (before GST) for the stand-alone package, while existing mioTV subscribers can continue with the existing pricing of S$34.90 (before GST). While we may see some migration of subscribers from mioTV to StarHub's cable TV platform, we do not expect a huge number. We maintain our NEUTRALrating on the sector. While we also maintain our HOLD rating on SingTel, we downgrade StarHub to SELL. (Carey Wong) MORE REPORTS StarHub Ltd: Downgrade to SELL; BPL likely non-event StarHub Ltd will be able to cross carry the widely-followed BPL (Barclays Premier League) live matches for the upcoming 2013 to 2016 seasons. However, with a seemingly steep price point of S$59.90/month (before GST) for new subscribers (while existing mioTV subscribers continue to pay the current S$34.90 (before GST)), we suspect that any migration of subscribers from mioTV to StarHub's cable TV platform would be quite muted. In light of the likely muted boost from the BPL cross carriage and recent strong run-up in share price (9.5% after our upgrade on 3 Jun), we feel that the stock may have run ahead of its fundamentals. As we are also keeping our DCF-based fair value unchanged at S$3.82 (already accounted for a higher risk-free rate), we foresee more downside risk from here. Hence, we downgrade our call back from Hold to SELL. (Carey Wong) First REIT: Contribution from new assets First REIT's (FREIT) 2Q13 results were within our expectations. Revenue and DPU (after stripping out a special distribution in 2Q12) rose 43.4% and 16.4% YoY to S$20.1m and 1.85 S cents, respectively. Only 0.86 S cents will be paid to unitholders (on 29 Aug 2013) as FREIT had already made an advance distribution of 0.99 S cents on 26 Jun 2013 (prior to the issuance of new units for part payment of its acquisitions). FREIT is in the process of refinancing ~S$92m of its floating-rate debt to a 4-year fixed-rate unsecured bank loan. Upon completion, its floating rate exposure will be reduced from 72% to 46% of its total borrowings, which we view as a positive development. We retain our forecasts, HOLD rating and DDM-derived fair value estimate of S$1.20 on FREIT. (Wong Teck Ching Andy) Yoma Strategic Holdings: First take on Yoma 1QFY14 results Yoma Strategic Holdings (Yoma) reported 1QFY14 PATMI of S$1.6m, which decreased 80.6% YoY mostly due to higher staff costs as the group continues to build up a strong management team in anticipation of future activity. We judge 1QFY14 PATMI to be somewhat below view - forming only 14% of our full year forecast - but expect the pace of recognition at development projects to back-loaded in the year. 1QFY14 topline came in at S$15.2m, up 11.6% YoY due to higher contributions from recognition of residential sales. We highlight the slower pace of sales in Star City over 1QFY14, as the sales status for Buildings 3 and 4 only crept up by 22 units (from 491 units sold as at end Mar-13 to 513 units sold as at end Jun-13). However, we note the group also reported a potential conditional agreement with a third party investor for the sale of LDRs for five buildings (1043 units) in zone B of Star City, which could be a significant catalyst for Star City sales ahead. We would speak with management about this set of results and the outlook ahead and, in the meantime, maintain HOLD with our fair value estimate of S$0.87 under review. (Eli Lee) M1: Joins Pay TV fray M1 Ltd has announced its own Internet TV service - MiBox, which offers video-on-demand entertainment and educational titles, games, e-books and apps. Priced at just S$8/month with a 2-year contract for M1 fibre customers (S$12/month for non-M1 subscribers), customers will have access to MiBox's library of 18k video-on-demand titles, 116 TV channels, 1.2k e-books and 370 apps. In addition, there is also an extensive selection of chargeable premium video-on-demand, e-learning titles and apps. According to M1, the service offers a new TV experience for everyone, from students to working adults to homemakers to retirees. However, given M1's small fibre customer base and its relatively new presence in a pretty saturated Pay TV market, we do not expect to see any major impact on earnings. Maintain HOLD with an unchanged fair value of S$3.10. (Carey Wong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks posted a modest decline on Mon as home sales fell in the wake of higher mortgage rates and investors nervously awaited more data later in the week and a meeting of Federal Reserve policy makers. - United Envirotech Ltd has proposed to acquire membrane products manufacturer Memstar Pte Ltd, a wholly owned subsidiary of Memstar Technology Ltd, for S$293.4m. - Pteris Global Limited announced that it will be acquiring a 70% stake in Shenzhen CIMC-TianDa Airport Support Limited, owned by China International Marine Containers. - Blumont Group plunged into the red to the tune of S$22.4m during 2Q13 as the company wrote down financial assets. - SP Corporation Ltd posted a 20% drop in its revenue for 2Q13 to S$43.9m from S$54.7m last year.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.74

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 2.50

Stock Name: M1
Company Name: M1 LIMITED

Research House: Nomura

Price Call: BUY

Target Price: 3.18

Market Compass

18 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

18 July 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day : Losers live in the past. Winners learn from the past and enjoy working in the present toward the future. - DENIS WAITLEY Singapore: The Day Ahead SINGAPORE DAYBOOK : Falling exports may scupper GDP growth SINGAPORE] Singapore's miserable run on the exports front has continued and the advance official estimate of strong GDP growth in the last quarter may turn out to be overly optimistic. There are also questions over whether key non-oil domestic exports (NODX) will pick up steam in the second half after they wrapped up the April-June quarter with the longest run of declines since the global financial crisis. The NODX extended its fall in June with a steeper-than-expected 8.8 per cent tumble from a year ago, the fifth drop in as many months, according to the latest trade figures released yesterday by the government's trade promotion agency International Enterprise Singapore. Last month's decline followed a 4.6 per cent decrease in May and exceeded the 5.8 per cent drop which the market was looking at. Chua Hak Bin, an economist at Bank of America Merrill Lynch, calculated that the decline brought the full second quarter (Q2)'s NODX down 4.9 per cent, against a 12.5 per cent fall in the first quarter (Q1). (Source: The Business Times) MARKET SCOOP Singapore yards benefit from China shipbuilding woes Keppel Land Q2 profit up 0.9% Singaporeand Barbados sign open skies agreement SPH Reit priced at 90 cts, sees strong institutional interest Unifiberto place 74.56m new shares at S$0.02322 each CCT'sQ2 DPU at 2.07 cts, embarks on S$40m upgrade of Capital Tower Singapore's non-oil domestic exports fall 8.8% y/y in June One in 10 Singapore firms settle trade in yuan: HSBC (Source: The Business Times) UOB KAY HIAN says... CAPITACOMMERCIAL TRUST | BUY | TP: S$1.74 CapitaCommercial Trust (CCT) reported a 2Q13 distributable income of S$59.6m (+1.9% yoy, +7.0%qoq) and a DPU of 2.07 cents (+0.5% yoy, +5.6% qoq) The 1H13 DPU is in-line with our expectations, accounting for 50.1% of our full year DPU estimate of 8.0 cents 1Q13 revenues improved 1.8%yoy to S$97.5m while Net Property Income dipped 0.5%yoy to S$74.9m, due to better performance at 6 Battery Road and higher rental contribution from HSBC Building offset by lower occupancy at Capital Tower and higher property tax and operating expenses Occupancy rate rose 0.5ppt to 95.8% in 2Q13, helped by rising occupancies at 6 Battery Road and One George Street CCT signed and renewed 191,700sf of leases in 2Q13, with about 58% renewals and 42% new leases New and renewed tenants include CBRE, Mitsubishi UFJ Lease, Noonday Asset Management, AAPC Singapore and Bryan Cave Intl. Consulting Committed occupancy at 6 Battery Road rose to 1ppt qoq to 94.2% while occupancy at 1 George St rose 2.8ppt to 97.2% S$40m AEI announced for Capital Tower for the upgrading of common areas and technical specifications, with a projected return on investment of 7.8% (incremental NPI of S$3.1m) upon completion in 2Q15 Revaluation gain of S$85.3m from mid-year revaluation of properties With cap rates unchanged at 3.75% for Grade-A offices, gains were achieved primarily from higher signing rentals at CCT's properties and lower cap rates at Raffles City (down 15-20bps for retail and hotel components) Gearing fell 1.5ppt to 28.9%, due to higher asset valuations and lower borrowings, while average cost of debt also fell 0.2ppt to 2.8% as CCT adopted a 76% fixed/24% floating rate for its borrowing Sensitivity to a rise in the interest rate remains low as a 50bps increase in interest rate will impact DPU by -1% Average debt maturity fell 0.2 years to 2.8 years CCT has a debt headroom of S$1.2b for acquisitions before reaching a gearing of 40% Expiry of yield protection may be mitigated by retained earnings from Quill Management anticipates that estimated impact from the loss of yield protection at One George Street from July 2013 will be S$8m for 2H13 (7% of 1H13 distributable income) However, this will be mitigated by better portfolio occupancies, positive rental reversions and savings on interest expense In addition, CCT has retained S$10.8m of distributable income from Quill Capita Trust, which may be used for potential distribution to unitholders Positive rental reversions with average portfolio rents up 1.7% qoq to S$7.96 psf pm in 2Q13 from S$7.83 psf pm in the previous quarter AEI and redevelopment works remain on track, with CapitaGreen due to be completed in 4Q14, and the asset enhancement works (AEI) at Raffles City also due to be completed in 2Q14 AEI works at 6 Battery Road are due to be completed by 4Q13 We have a BUY on CCT with a target price of S$1.74 based on DDM (required rate of return: 7.2%, terminal growth: 2.2%) DBS VICKERS Securities says ... ASCENDAS REIT | BUY | TP: S$2.50 A-REIT's 1Q14 results were in line, with gross revenues and net property income growing 6% and 7% to S$150.9m and S$108.0m, respectively This was largely due to the acquisition of The Galen, supported by an organic uplift in rents Rental reversions remained positive at c9.6% compared to previously contracted rents while occupancy rates dipped slightly to 93.6% due to conversion of certain single-tenanted properties into multi- tenanted properties Weighted all-in cost declined slightly to 3.09% (vs 3.32%) but is expected to remain stable going forward Distributable income came in 11.3% higher at S$85.2m, translating to a DPU of 3.55 Scts for the quarter (+0.6% due to an enlarged share base) The recent completion of Unilever Four Aces Singapore (a built-to-suit facility) and the acquisition of A-REIT City @ Jinqiao are expected to start kicking in from 2Q14 We note that there is a S$13.5m rental guarantee on the latter, which will mitigate any earnings downside REIT has commenced leasing of the space, which is currently 3% leased with a further 20% of the space under negotiation A-REIT has an active good pipeline of development and asset enhancement projects (AEI), with an additional 3 AEIs at Techquest, LogisTech and Corporation Place unveiled, costing cS$25.4m and will complete in 2Q14 Together with its other developments, A-REIT has an additional S$190.8m in investments (new and uncompleted projects) that have yet to be funded Growth momentum will pick up from end of FY14F as these projects are progressively completed from 2HCY13. Amongst the development projects, Nexus@one-north, the largest development project in its pipeline (completing in 3QCY13), is seeing improving take-up rates, with reported occupancy of close to 58% Our TP is revised to S$2.50 as we raised our risk free rate assumption (2.6% vs 1.8%) We continue to like A-REIT for its stability and attractive yield of c6.1-6.5%. Upside to earnings will be acquisitions, which the manager is currently reviewing NOMURA Securities says... M1 | BUY | TP: S$3.18 A steady performance from M1 with service revenue 2% ahead of our expectations while EBITDA came slightly below due to mix change in handset sales Service revenue grew 9%, EBITDA grew 6% with 37% margin, and NPAT grew 11% y-y Management reaffirmed its FY13 guidance for moderate NPAT growth Key takeaways from the result to highlight: Some sequential improvement in postpaid ARPUs from data re-pricing Postpaid ARPU rose 2% q-q compared to a flat to 2% q-q decline for the past four quarters This, however, has a long way to go still as only 26% of postpaid customers are on tiered data plans now and only around 15% of subs appear to be exceeding data allowances M1 is also in discussion with OTT players for revenue sharing arrangements to protect ARPU\ Handsets continue to create margin volatilities Service margin fell from 39% in 1Q to 37% due to a rising mix of Android devices and accounting of these devices (expensed up front) Android handsets are now at 75% of the mix, from 60% in 1Q and 40% a year ago M1 has 67k fibre subs now with net adds of 7k This is around 3% of its total wireless base - improving this ratio is key to improving churn We estimate M1's fibre revenue contribution is SGD9mn, vs wholesale fixed cost of SGD7mn (excluding and advertising and other costs) FY13 capex guidance is now for SGD130mn, or at the lower end of its initial guidance This excludes payment for recently won spectrum, which will occur in end 2014 (SGD40mn) and 2016 (SGD64mn) We maintain Buy M1 has declared a 6.8sen dividend. Its 5% yield remains appealing and the stock is now trading at 17x FY13F P/E

SG: MARKET PULSE: A-REIT, M1, CCT (17 Jul 2013)

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.45

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.10

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.80

MARKET PULSE: A-REIT, M1, CCT

17 Jul 2013

KEY IDEA Ascendas REIT: Apparent growth drivers Ascendas REIT (A-REIT) reported NPI of S$108.0m and amount available for distribution of S$85.2m, up 6.8% and 11.3% YoY respectively. The increase was driven mainly by contribution from its newly-acquired The Galen and positive rental reversions. On the operational front, A-REIT continued to deliver as well. Despite starting FY14 with 21.4% of its revenue due for renewal, A-REIT has managed to reduce the figure significantly to 14.8%, thanks to its proactive portfolio management. Moreover, positive rental reversions averaging 9.6% were achieved across all its property segments. During the quarter, A-REIT also announced three new asset enhancement works to optimize its yield. In addition, we understand that A-REIT has completed the purchase of its second property in China in Jul, and is actively working to fill the spaces. These efforts, together with continued higher renewal rents and vacancies at its existing portfolio, are likely to provide further upside in its NPI. We are keeping our FY14 forecasts unchanged as the 1Q performance was within view. Maintain BUY and S$2.45 fair value on A-REIT. (Kevin Tan) MORE REPORTS M1: 1H13 results mostly in line - HOLD M1 Ltd saw its 2Q13 revenue +5.3% YoY (+0.6% QoQ) at S$244.5m, and was just 1.4% shy of our forecast, as smartphone customers and usage continue to drive revenue growth. Net profit climbed 11.2% YoY (-4.5% QoQ) to S$39.2m, or about 3% ahead of our estimate. 1H13 revenue slipped 1.5% to S$487.5m, meeting 42.7% of our full-year forecast (due to lower handset sales in 1Q13), but net profit rose 6.1% to S$80.2m, or 51.8% of our FY13 estimate. M1 declared an interim dividend of S$0.068/share, versus S$0.066 last year. With only very minor adjustments (<0.5%) to our FY13 and FY14 earnings forecasts, our DCF-based fair value remains at S$3.10; we have already factored higher interest rate assumptions in our model. Maintain HOLD for decent dividend yield of 4.7%. (Carey Wong) CapitaCommercial Trust: 2Q13 results within expectations CapitaCommercial Trust (CCT) reported 2Q13 distributable income of S$59.6m - 1.9% higher YoY. This cumulates to a 1H13 distributable income of S$115.3m, up 2.6% YoY, which is within expectations and make up 50.3% of our FY13 forecast. 2Q13 DPU is 2.07 S-cents which translates to a 5.4% distribution yield based on the last closing price of S$1.50. The growth in distributable income was mainly due to higher revenue contributions across portfolio properties, except Capital Tower, and lower finance costs which dipped S$3.4m QoQ due to reduced interest costs. Portfolio occupancy remained stable at 95.8% as of end 2Q13, versus 95.3% in the previous quarter. As a result of continued rental reversions, CCT's average committed office portfolio rentals increased from S$7.83 to S$7.96. We will be speaking further with management regarding these results and, in the meantime, put our Buy rating and fair value estimate of S$1.80 UNDER REVIEW. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks declined on Tue, with the S&P 500 breaking an eight-session winning streak after a Federal Reserve member urged reduced stimulus and Coca-Cola Co.'s profit fell. - The Monetary Authority of Singapore said the local banks are not at risk and regular stress tests have shown that adequate buffers are in place to cope with the upturn in interest rates. - United Overseas Bank has successfully sold a new bank debt with a loss absorption feature, in compliance with stricter Basel III rules on capital, the first Asian bank to do so. - United Fiber System has gone forward with its plan to acquire coal miner PT Golden Energy Mines (Gems) for S$1.88b in a reverse takeover deal with PT Dian Swastatika Sentosa (DSS).

SG: MARKET PULSE: CWT, Rigbuilders, SGX, M1, FCT, KepLand (17 Apr 2013)

Stock Name: CWT
Company Name: CWT LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.08

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 6.80

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.10

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.68

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.64

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.13

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.53

MARKET PULSE: CWT, Rigbuilders, SGX, M1, FCT, KepLand

17 Apr 2013

KEY IDEA CWT: Growth from warehouse assets and Commodity SCM CWT is a leading provider of logistics solutions for worldwide customers in the commodities, chemical, petrochemical, marine, oil & gas, defense and industrial sectors. A competitive edge is its global logistics network which connects customers to around 200 direct ports and 1,500 inland destinations. The group is currently developing two large warehouses, estimated to add another 50% to its owned warehouse space in Singapore. In total, we estimate its entire warehouse portfolio to be worth about S$800m. Meanwhile, the recently acquired Commodity SCM business is also expected to scale up quickly, taking advantage of the group's strong global logistics network and reputation as an established commodity collateral manager. Our SOTP fair value estimate for CWT is S$2.08 per share. Given the ample upside, we initiate coverage with BUY.(Chia Jiunyang) MORE REPORTS Singapore Exchange: Strong 3Q, but likely QoQ slowdown in 4Q Singapore Exchange (SGX) generated above market expectation 3QFY13 net earnings of S$97.7m, up 25.6% YoY. The strong performance came from several units, especially its core Securities and Derivatives businesses. A 3Q dividend of 4 cents has been declared and is payable on 2 May 2013. The final quarter is likely to see some slowdown, largely due to prevailing macro economic uncertainties, and we expect volatility to come back again as sentiment is likely to turn more cautious especially after the good gains for the key equity indices since the start of the year. We have raised our fair value estimate slightly from S$6.80 to S$7.16 based on the same 23x blended earnings. With an estimated dividend yield of 3.5%, total return is -3.5% and we are buyers only at S$6.80 or lower. Maintain HOLD. (Carmen Lee) M1: 1Q13 results in line; downgrade to HOLD M1 Ltd reported its 1Q13 revenue of S$243.0m (-7.4% YoY, -25.8% QoQ) which met just 21.3% of our full-year forecast, mainly due to lower handset sales and also the mix of handsets (Android now makes up >50% of its postpaid subscriber base). Nevertheless, net profit grew 1.7% YoY and 8.2% QoQ to S$41.0m, meeting 26.5% of our FY13 forecast. It may have also gotten a one-off boost from recognizing the unused credit in expired pre-paid cards that were periodically terminated. While we are not making any chances to our FY13 estimates as 1Q13 results were largely in line, our DCF-based fair value improves to S$3.10 (from S$2.89) as we tweak our interest rate expectations slightly lower in view of the still sluggish global economic performance. But as there is now <10% total return from here, we downgrade the stock to HOLD. (Carey Wong) Rigbuilders: Who has been ordering from the Chinese yards? There have been recent reports on Chinese yards surpassing Singapore yards in terms of jack-up rig orders YTD. Indeed, we find that jack-up orders for the former have totaled ~US$2.3b so far, compared to ~US$2.1b for the latter. However, we note that many of the contracts that Chinese yards have won so far are mostly from newcomers in the offshore industry, including speculators who sell the rigs later for a profit. Meanwhile, Keppel Corp (KEP) and Sembcorp Marine (SMM) have been diversifying their product range and innovating to stay ahead in certain niche areas. Maintain BUY on both KEP [FV: S$12.68] and SMM [FV: S$5.64]; we note that markets may be increasingly volatile ahead, providing an opportune time to enter such quality stocks. (Low Pei Han) Frasers Centrepoint Trust: 2QFY13 results broadly in line Frasers Centrepoint Trust (FCT) announced its 2QFY13 results this morning. NPI and distributable income grew by 9.7% YoY and 10.4% YoY to S$28.7m and S$23.5m respectively. DPU for the quarter came in at 2.7 S cents, up by a slightly slower 8.0% YoY due to retention of S$1.2m in distributable income. For 1HFY13, DPU rose by 8.5% YoY to 5.1 S cents. This is broadly in line with both ours and consensus expectation, with 1HFY13 DPU forming ~47% of our full-year DPU forecasts. FCT's portfolio assets continued to exhibit resilience. Average occupancy improved to 98.2% as at 31 Mar from 97.2% in the prior quarter, and positive rental reversion of 6.6% was achieved for 1HFY13. We will be speaking to management during the analyst briefing scheduled later in the morning. For now, we keep our S$2.13 fair value and HOLD rating on FCT unchanged. (Kevin Tan) Keppel Land: Diversifying stake in Tanah Merah site Keppel Land (KPLD) announced yesterday that it would join China Vanke (Vanke) in a strategic alliance to develop property in China and Singapore. In addition, Vanke would take a 30% interest in a KPLD's Tanah Merah GLS site for S$135.5m. Recall that KPLD had won this site with a S$434.6m bid last Oct and Vanke's entry price is only marginally above that of KPLD's cost. We believe this price is reasonable and, all considered, expect a neutral market reaction to this transaction. In our view, the potential loss of accretion to KPLD's RNAV from this divestment is limited and mostly offset by the benefits of diversification in an increasingly uncertain domestic residential space. Maintain BUYwith an unchanged fair value estimate of S$4.53. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US equities rallied Tuesday, on the back of optimism from a bounce in gold prices, good corporate earnings and positive housing data. - Moody's has cut its outlook for China's credit rating from stable to progressive, citing risk from local government debt and credit growth from shadow banking. - From Jun 24, commuters who exit MRT stations in the city area before 7.45am on weekdays will travel for free. - Grand Banks Yachts is on track to complete five luxury yachts for buyers from Singapore, Japan and Micronesia in FY13 (ending Jun 2013). This marks the highest-ever sales to the region since the 2008-2009 global financial crisis. - The payable consideration by Europtronic Group for the proposed acquisition of Gold Impact is S$160m. - Sabana REIT has established a S$500m Multicurrency Islamic Trust Certificates Issuance Programme.

MARKET PULSE: Cache, M1 (22 Jan 2013)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.32

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.89

MARKET PULSE: Cache, M1

22 Jan 2013

KEY IDEA Cache Logistics Trust: Still room for upside Cache Logistics Trust (CACHE) turned in a consistent set of 4Q12 results after market close yesterday. FY12 DPU totalled 8.365 S cents (+1.6%), matching our/consensus full-year DPU forecasts of 8.29/8.3 S cents. This translates to an attractive FY12 yield of 6.4%, higher than the S-REIT sector average yield of 5.8%. CACHE's portfolio occupancy as at 31 Dec 2012 remained at 100% as its leases are predominantly based on triple-net master lease structures. Weighted average lease to expiry also stood resilient at 3.9 years, with only 1.7% of GFA due for renewal in FY13. In addition, its built-in rental escalation for master leases was maintained at 1.25-2.5%. This should give CACHE with good earnings visibility and healthy organic growth in our view. With the major refinancing exercise in Jun 2012, CACHE had successfully increased its loan-to-value over its previous collateral, reduced its all-in financing costs and enhanced its debt expiry profile. Aggregate leverage was also healthy at 31.7%. This provides CACHE with the financial resources and flexibility to drive its new business initiatives. We maintain BUY on CACHE with a revised fair value of S$1.32 (previously S$1.30). (Kevin Tan) MORE REPORTS M1: FY12 results mostly in line M1 Ltd reported its FY12 results, which were mostly in line - revenue of S$1076.8m was 1.5% above our estimate, while net profit of S$146.5m was 3.3% below. We note that the shortfall was due to higher-than-expected tax expenses in 4Q12. M1 declared a final dividend of S$0.063/share and a special dividend of S$0.017/share, bringing the total full-year dividend to S$0.146 (versus S$0.145). Going forward, management expects to see moderate earnings growth in 2013 and has maintained its minimum 80% dividend payout ratio. It also expects to spend S$130-150m capex to expand network coverage and capacity. We are paring our FY13 earnings forecast by 9% after taking the guidance into consideration. But as we shift our DCF valuations out to 2015, our fair value remains unchanged at S$2.89. Maintain BUY as we still believes M1 has potential gain market share in the NBN segment. (Carey Wong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stock markets were shut on Mon for the Martin Luther King Jr. holiday, ahead of a busy week of earnings releases. Heavyweights Google, IBM and Texas Instruments are scheduled to release quarterly results later today, while Apple and Microsoft are expected to release their results on Wed and Thu, respectively. - Singapore's industrial production likely contracted 4.2% YoY in Dec, according to the median estimate of economists polled by Reuters, suggesting that 4Q and full-year 2012 GDP could be revised downwards. - Keppel REIT's 4Q12 distributable income rose 45% YoY to S$51.9m, 13% above its forecast, as net property income grew 85% to S$32.8m. The REIT quashed talk that it was currently looking into acquiring a stake in Marina Bay Financial Centre Tower 3.

MARKET PULSE: Telecom Sector, TEE (6 Dec 2012)

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.89

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.34

MARKET PULSE: Telecom Sector, TEE

12 Dec 2012

KEY IDEA Telecoms Sector: Defensive earnings in still-uncertain times Going into 2013, with the global economic outlook still looking somewhat shaky, we believe that investors may continue to favour stable yield plays for recurring income in their portfolios. We think that the telecommunication stocks will continue to be good candidates as their defensive earnings and strong ability to generate free cashflow should continue to sustain their relatively attractive dividend yields. As such, we maintain our OVERWEIGHT rating for the sector. Among the three telcos, we have a slightly preference for M1 (BUY, FV: S$2.89). (Carey Wong) MORE REPORTS TEE International: Unlocking value TEE International plans to unlock the value of its real estate business by spinning it off and listing it separately on SGX. It intends to keep a 70-75% stake in the property business, which TEE sees as a valuable source of future earnings. TEE plans to pay out part of the proceeds raised from the listing as a special dividend and use the rest to fund its expansion into new ventures. We have changed our valuation model to better capture the value of TEE's real estate business using the RNAV surplus method. This gives us a fair value estimate of S$0.34 per share for TEE (previously S$0.28), implying a potential upside of 7% from its last traded price of S$0.315. We have not factored in any potential gains from the real estate spin-off. TEE could see further upside in the current financial year as more revenue from its property projects is recognised. We maintain our HOLD rating. (Conrad Tan)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks mostly rose on Wed, amid signs that political leaders were willing to compromise in talks to avoid the fiscal cliff. The Dow rose 0.6%, the S&P 500 +0.2%; but Nasdaq fell 0.8%, weighed by Apple Inc's court battle with Samsung. - Majority shareholder Simon Cheong is offering to take SC Global Developments private at S$1.80 a share, valuing the firm at S$745m. Trading is set to resume today. - Oakwell Engineering plans to raise up to S$10m in working capital through the sale of five-year convertible bonds paying interest of 8% a year, to an individual investor. The bonds are convertible into Oakwell shares at S$0.0875 each. - Keppel REIT's subsidiary, Ocean Properties, has obtained a S$505m five-year term loan to refinance its outstanding loans. The loan facility will be secured by a mortgage against Ocean Financial Centre. - Sysma Holdings is offering S$35m to buy De Paradiso Development Pte Ltd, a Singapore investment holding company which owns two plots of land at Serangoon. The proposed acquisition is non-binding and subject to due diligence checks and the approval of Sysma's shareholders.

Phillip upgrades M1 to Neutral despite weak 3Q12

Stock Name: M1
Company Name: M1 LIMITED

Research House: Phillip Securities

Price Call: HOLD

Target Price: 2.41

Phillip Securities upgrades M1 to Neutral from Reduce. “Although net profits were low, and ebitda margins declined for the fifth consecutive quarter since 2Q11, we are upbeat on the improvement in service revenue, while noting that handset subsidies will be recovered in future quarters.”

It notes 3Q12 service revenue rose 2.9% on-quarter to $195.3 million on a larger customer base, but operating expenses rose 13.8% on-quarter to $213.2 million on increased handset costs. It expects nationwide LTE coverage and M1’s higher iPhone 5 subsidies vs peers will further increase its post-paid customer base.

“With the current uncertainty in the macro-economic environment, and as the search for positive real returns continue, M1’s dividend yield of 5.5% remains attractive at current prices. Fundamentally, M1’s service revenue growth continues to be healthy, while we do not expect any potential headwinds, other than a possible spectrum auction bidding war, for which M1 has the ability to compete in, possibly through an increase in borrowings from banks.” It raises its target to $2.41 from $2.38. The stock is up 1.1% at $2.69.

MARKET PULSE: Midas, M1 (16 Oct 2012)

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.51

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.80

MARKET PULSE: Midas, M1

16 Oct 2012

KEY IDEA Midas Holdings: Engines just getting warmed up We maintain our BUY rating on Midas Holdings (Midas) and raise our fair value estimate from S$0.435 to S$0.51 in light of the brighter prospects in China's railway sector. The latest data on total railway fixed asset investments (FAI) in China exhibited an encouraging 92.7% YoY surge to CNY72.7b for the month of Sep, which we believe highlights the progressive recovery in the sector. Another positive development came from the China Ministry of Railways' (MOR) decision to raise its 2012 railway FAI target from CNY610b to CNY630b, having only previously done so in Sep. Moving forward, we see further re-rating catalysts for Midas when China's MOR resumes the re-tendering of new HSR passenger train car contracts in the near future and continued traction gains in Midas' orders win momentum from the urban rail and power industries. (Wong Teck Ching Andy) MORE REPORTS M1: Sees QoQ improvement in 4Q12 M1 Ltd reported another set of softer-than-expected set of 3Q12 results yesterday. While revenue of S$254.7m (+4.0% YoY and +9.6% QoQ) was largely in line with our expectations, another sharper-than-expected decline in margins saw net profit falling some 19.5% YoY and 6.0% QoQ to S$33.1m. Nevertheless, management remains confident that 3Q12 net profit is probably the lowest for this year as it now guides for QoQ improvements in both top and bottom lines. But for the full-year, it has not changed its previous guidance given in 3Q, as it continues to expect the handset subsidies expensed upfront to have an impact on profitability. As such, we are paring our FY12F earnings by another 2.8%. However, we are leaving our dividend forecast of S$0.145/share unchanged, given its ability to generate strong free cashflows. Our DCF-based fair value also remains at S$2.80. Maintain BUY. (Carey Wong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - U S stocks climbed on Monday, led by gains in the financials healthcare. The Dow rose 0.7% to 13,424.23, led by Bank of America Corp. and Merck & Co. The S&P 500 Index climbed 0.8% to 1,440.13, with Citigroup Inc. as the top performer with better-than-expected earnings. - K-Green Trust - will be renamed Keppel REIT - posted 9M12 profit after tax of S$11.4m versus S$11.7m in 9M11. It will commence quarterly DPU payments from Oct, and 3Q12 DPU of 1.96 S cents will be made on 27 Nov. - Jackspeed Corporation registered 1H13 PATMI of S$258k, up 659% YoY. Revenue had climbed 62% YoY to S$21.0m. - IEV Holdings Limited has entered into a memorandum of understanding with Gas Malaysia Berhad to conduct a feasibility study on liquefied natural gas distribution in Malaysia. - Food Empire Holdings has incorporated a wholly-owned Nigerian subsidiary to provide marketing support for its products. - LionGold Corp Ltd has outlined operational plans for its main gold interests in Ghana and Australia, focused on increasing output, reducing production costs and increasing mine life.

MARKET PULSE: Dyna-Mac, M1 (12 Sep 2012)

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.

Research House: OCBC

Price Call: BUY

Target Price: 0.62

Stock Name: M1
Company Name: M1 LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.80

MARKET PULSE: Dyna-Mac, M1

12 Sep 2012

KEY IDEA Dyna-Mac Holdings: Well-positioned to capture new orders Dyna-Mac Holdings' (DMH) share price has jumped by about 29% since we upgraded our call to BUY ("Upgrade to BUY", 6/7/2012), outperforming STI's flattish performance over the same period. Looking ahead, we believe there is further upside as the group is well-positioned to benefit from possible new order wins. Recent orders for floating production systems are emerging at near record pace and the current backlog globally was at a peak of 67 units as of Apr 2012. To meet the growing demands, DMH recently acquired a 70% stake in a fabrication yard in Guangzhou, and rented another yard in Johor. In view of the improving outlook, we raised our fair value estimate to S$0.62 (previously S$0.52). Maintain BUY. (Chia Jiunyang) MORE REPORTS M1: LTE is still 2013 story at best M1 Ltd will launch its nationwide 4G LTE network in Singapore on 15 Sep, where it will offer 95% coverage for indoor and outdoor areas. M1 is also pricing its 4G services at a premium to its 3G bundles. While the 4G premiums could be a minor stumbling block (but unlikely to deter early adopters), the bigger stumbling block is likely to come from limited 4G handsets that are available. Hence, we believe that 4G LTE is still more of a 2013 story, as the mass market may still take some time to convert their 3G handsets to 4G. As such, we have not factored in any significant contribution from LTE until 2014 in our model. We continue to like M1 for its defensive earnings and relatively attractive dividend yield of 5.3%. Maintain BUY with an unchanged DCF-based fair value of S$2.80. (Carey Wong)

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NEWS HEADLINES - US stocks finished higher on Tuesday, with the Dow having its highest close since late 2007, as investors wait for this week's key decisions from Germany's top court and the US Fed. - SP AusNet has expressed disappointment with the Australian Energy Regulator's Draft Determination on the Gas Access Arrangement Review. SP AusNet says that the Draft Decision, if implemented as it stands, would reduce its nominal revenues by 21%. - Perennial China Retail Trust intends to issue S$130m worth of 6.375% fixed rate notes due 2015. - Hanwell Holdings' wholly-owned subsidiary has entered into a mutual release and settlement agreement with adidas International Trading B.V. and The Rockport Company, LLC. - Manufacturing Integration Technology has executed sale-and-purchase agreements to buy two units in North Spring Bizhub. - Food Junction Holdings Limited has announced the opening of its latest restaurant, The Boxing Crab, located next to Sentosa's Underwater World Singapore.

M1 rated 'buy' by Maybank Kim Eng

Stock Name: M1
Company Name: M1 LIMITED

Research House: Maybank Kim Eng

Price Call: BUY

Target Price: 2.85

Maybank Kim Eng Research in a May 18 research report says: "M1 has just launched a new prepaid product in conjunction with MasterCard and EZ-Link. The M1 Prepaid MasterCard is a multipurpose debit card that allows users to top up M1’s prepaid cards, pay public transit fares, ERP and car park charges and make contactless purchases.

"We think it is an interesting product that should help M1 increase customer stickiness and reverse negative net-adds in prepaid. The main selling point is that it offers a simple way to pay for goods and services but without the complexity of owning a credit card.

"M1 has provided a stable outlook guidance for FY12, driven by its mobile data and fixed services segment. We expect this new product to drive higher quality prepaid net-adds as well. Target price of $2.85, based on 15x FY12 EPS and dividend per share of 14.5 cents. MAINTAIN BUY."

M1 rated 'reduce' by Phillip Securities

Stock Name: M1
Company Name: M1 LIMITED

Research House: Phillip Securities

Price Call: SELL

Target Price: 2.38

Phillip Securities Research in an Apr 17 research report says: "M1 reported revenue increase of 2% attributable to growth in Mobile Services revenue & Fixed Services revenue. Growth in Mobile Services revenue was mainly due to a larger customer base, while Fixed Services revenue improved with a gradual increase in broadband subscriber base.

"EBITDA margin on service revenue declined 2.1ppt as the increase in operating costs outpaced the growth in revenue. Despite aggressive pricing by M1, the company’s growth in fibre subscriber base remains slow at a run rate of 7k subscribers in a quarter.

"M1’s postpaid mobile ARPU was stable at $52.9 per month. However, postpaid churn rate climbed to a recent high of 1.5% with postpaid net add of only 7k subscribers. Target price of $2.38. MAINTAIN REDUCE."