SG: MARKET PULSE: ComfortDelgro, Tat Hong, SingTel, KS Energy, Dyna-Mac (14 Nov 2013)

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: OCBC

Price Call: BUY

Target Price: 2.20

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.90

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: HOLD

Target Price: 3.81

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.50

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.44

MARKET PULSE: ComfortDelgro, Tat Hong, SingTel, KS Energy, Dyna-Mac

14 Nov 2013

KEY IDEA ComfortDelGro: Excellent set of 3Q13 results ComfortDelGro's (CDG) 3Q13 results exceeded our expectations with revenue increasing 8.6% YoY to S$978.4m while operating profit and PATMI grew 4.8% YoY to S$122.4m and 5.4% YoY to S$76.7m, respectively. The newly acquired Metroline West bus service in UK was the main contributor to the improved results although the group also enjoyed a better showing by SBS Transit. We expect ComfortDelgro to end FY13 with another record PATMI figure as continued strong performances from its taxi, bus and vehicle inspection operations should offset any weakness in the other segments such as rail (due to the DTL start-up costs) and driving centre operations. Based on our higher adjusted FY13/14 earnings, our fair value estimate increases to S$2.20 (S$1.95 previously). Maintain BUY. (Lim Siyi) MORE REPORTS Tat Hong Holdings: No surprises in 2QFY14 results Tat Hong's 2QFY14 results remained weak as expected. Revenue fell 14.2% YoY to S$185.3m while operating profit declined by 33.9% to S$18.6m. Despite the poorer showing, management declared an interim dividend of 1 S cent vs. 1.5 S cents last year. Entering 2HFY14, we expect Tat Hong's performance to stay weak. Its Australian operations are unlikely to produce any turnaround until early FY15 (at its earliest) as sentiment remains poor. Nonetheless, some positives from stability in Singapore, Hong Kong and China operations should help to cushion some of the declines. As the street had factored in expectations for a weakened performance, we should not see sustained selling pressure on the counter. Adjusting our forecasts downwards slightly, our fair value falls to S$0.90 (S$0.96 previously). Maintain HOLD. (Lim Siyi) SingTel: In-line 1HFY14, no change to outlook Summary: SingTel posted 2QFY14 revenue of S$4163.1m, down 9% YoY and 3% QoQ, again weighed by weaker regional currencies (AUD, IDR and INR depreciated 10% YoY against SGD). Reported net profit was flat YoY and down 14% QoQ at S$870.4m; excluding exceptional items, core earnings was flat YoY and +1.4% QoQ at S$884.0m. 1HFY14 revenue slipped 7% to S$8456.4m, meeting 50% of our FY14 forecast, while reported net profit gained 4% to S$1881.4m; core earnings rose 3% to S$1781.0m, or 48% of full-year forecast. SingTel declared an interim dividend of 6.8 S cents, same as 1HFY13, representing a payout ratio of 61%. Meanwhile, SingTel has kept its FY14 guidance unchanged - it expects consolidated group revenue to decline by mid-single digit level and EBITDA to decline by low single digit level; EBIT will also fall by mid-single digit level. We will have more after the analyst teleconference later. For now, we maintain our HOLD rating but place our S$3.81 fair value (based on SOTP) under review. (Carey Wong) KS Energy: Business as usual KS Energy (KSE) reported a 7.4% YoY rise in revenue to S$173.3m and a net profit of S$320k in 3Q13 vs. S$14k in 3Q12, such that 9M13 revenue and net profit accounted for 81% and 47% of our full year estimates, respectively. The lower-than-expected net profit was mainly due to a higher-than-expected share of minority interest. However, we would not read too much into this, as small changes in items above the line can bring about huge swings in PATMI given the relatively small quantum of net profit; our fair value is also based on P/NTA instead of P/E valuation. Gross profit margin was similar at 25.7% in 3Q13 compared to a year ago. Pending more details from management, we maintain our HOLD rating but put our fair value estimate of S$0.50 under review. (Low Pei Han) Dyna-Mac Holdings: 3Q13 PATMI below expectations Dyna-Mac Holdings announced 3Q13 PATMI of S$5.3m, which was a decline of 47.9% YoY and also below our expectations. This was despite revenue growing 11.7% YoY to S$66.8m. The miss was largely attributed to a larger-than-estimated increase in administrative expenses, which jumped 36.0% YoY to S$10.1m. For 9M13, revenue rose 44.2% to S$203.5m but PATMI was relatively flat (-0.2%), coming in at S$19.6m. Total YTD new order wins for Dyna-Mac was S$318m, and this has already surpassed that for FY12. Net order book stood at a healthy S$346m as at 13 Nov 2013 (versus S$215m as at 8 Nov 2012). We will meet up with management later for more details. Due to a change in analyst coverage, our previous Hold rating and S$0.44 fair value estimate is under review. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks climbed on Wed, lifting the S&P 500 and Dow to record closes, on hopes about Janet Yellen's testimony at a Senate confirmation hearing on Thu. - Olam International is selling nearly 12,000 hectares of almond orchards in Victoria, Australia for A$200m (S$232m) in cash. - Oxley Holdings has made it to the big boys' table, with net profit for 1QFY14 surging to a record S$250.8m, from just S$6.6m a year ago. - Rotary Engineering posted 3Q13 net profit of S$7.9m, reversing from its net loss of S$66.2m a year ago. - Banyan Tree Holdings reported a S$1.4m net loss for 3Q13, but half of the S$2.8m net loss a year ago. - Otto Marine posted a net profit of US$4.12m for 3Q13, down 13.1% YoY. - Croesus Retail Trust's DPU of 3.26 S cents for the 144 days ended 30 Sep beat its IPO forecast by 4.6%. - Singapore's casino regulator has for the third time this year hit the country's two casinos hard on the wallet for various regulatory breaches. - WBL Corporation's 4QFY13 net profit halved to S$8.6m, from S$17m a year ago.

SG: MARKET PULSE: Tat Hong, Golden Agri (9 Oct 2013)

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.96

MARKET PULSE: Tat Hong, Golden Agri

9 Oct 2013

KEY IDEA Tat Hong Holdings: Weakness already priced in Following our recent discussion with Tat Hong's management, we are upgrading Tat Hong to HOLD and raise our valuation peg to 11x (previously 9x) and fair value estimate to S$0.96 (previously S$0.80). We feel that the stock has bottomed since the sell-off after its disappointing 1Q14 results, and that the street has adequately priced in its expectations for a weakened performance for the remainder of FY14. Its key market of Australia should start to see a pickup in business activity by early FY15 on commitments on infrastructure spending by the new Coalition government and as improving business confidence translate to actual spending. In the interim, relative stability from its SEA and greater China markets will help to offset some of the shortfall in performance figures for FY14. (Lim Siyi) MORE REPORTS Golden Agri: Headwinds remain Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, could continue to underperform with average CPO prices down 22% YoY and 2% QoQ in 3Q13. Outlook for CPO prices is also likely to remain muted, with stockpiles growing faster than expected going into 2H13. Market watchers are expecting an excess supply of oilseeds (soy, corn etc) to further weigh on CPO prices. Meanwhile, the impasse over the raising of the US debt ceiling could send the US economy into a recession, further weighing on global sentiment. In light of the headwinds ahead, we maintain our SELL rating on the stock with an unchanged fair value of S$0.465. (Carey Wong)

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

NEWS HEADLINES - US stocks fell sharply on Tue hit by growing jitters over the budget impasse in Washington, with the partial government shutdown extending into a second week with few signs of a deal to end it or raise the nation's debt ceiling. - Singapore's central bank is widely expected to keep the Singapore dollar on its rising path next Monday even as growth is expected to slow. - Despite a sputtering global economy, business sentiment in Singapore remains positive for 4Q13, said Dun & Bradstreet Singapore's latest Business Optimism Index. - SunMoon Food Company's latest debt restructuring has finally removed the proverbial sword of Damocles hanging over its head and given it a fresh impetus for growth. - The proposed IPO of a Philippine casino joint venture between Genting Hong Kong and Philippine conglomerate Alliance Global Group is back on the table, but looks to raise about half its initial target of up to 42.3b pesos (S$1.22b). - The vendor of Reflections Oasis Inc, the company that steel trader Albedo is trying to acquire in a reverse takeover deal to transform itself into a property play, has stressed its commitment to see the deal go through.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: Maybank Kim Eng

Price Call: HOLD

Target Price: 1.00

Stock Name: Marco Polo
Company Name: MARCO POLO MARINE LTD.

Research House: OSK-DMG

Price Call: BUY

Target Price: 0.61

Market Compass

26 September 2013~ Good Morning Singapore!

Singapore Idea Snippets:

26 Sept 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 : These critics with the illusions they've created about artists - it's like idol worship. They only like people when they're on their way up... I cannot be on the way up again. - JOHN LENNON Singapore: The Day Ahead SINGAPORE DAYBOOK :Tharman warns of China reform's global effect. He says it would be naive to think that the major act is going to be smooth [SINGAPORE] Growth below 6.5 per cent in China will significantly impact everyone else even if the world's second-largest economy can quickly address a slowdown, Finance Minister Tharman Shanmugaratnam said yesterday. "Anything below 6.5 per cent has major implications for the rest of the world, and especially for Asia and emerging markets generally . . . It can happen, for some period of time, not by intent, but it can happen." Although China remains fundamentally robust, the country is now undertaking far-reaching structural reform that carries real execution risks, Mr Tharman said as he described major global themes in a speech at the SkyBridge Alternatives (Salt) Asia Conference. "Each reform carries risk, and the risks in individual reforms are not uncorrelated with the risk in the other reforms. So mistakes can happen. And it would be naive to think that this major act of structural reform in the Chinese economy is going to be a smooth one." In essence, Chinese policymakers need to juggle a number of interrelated, dynamic parts. "You can't just do financial reform without changing your tax and fiscal structures, particularly those related to local government. You can't do financial reforms and fiscal reforms without SOE reforms - state-owned enterprise reforms . . . (and) you can't do economic and financial reforms without social reforms." Mr Tharman does not believe that China is headed for a hard landing because policymakers there "understand the issues well and deeply", and politically the country is able to move quickly and decisively. China is "set on the right path, but it's extremely complicated". "Mistakes can happen, and although they can be corrected, the ripple effects on the rest of the world are significant," he said. Mr Tharman also highlighted the still-unanswered problem of demographics in mature economies, which he expects to be a persistent problem for the next decade and beyond. "If you have a continuing stagnation of the middle in mature economies, it's going to change the global economy." The problem of middle-class stagnation manifests itself not just in falling competitiveness relative to the growing middle class of emerging economies, but also domestically in the form of inter-generational tension as the younger populace struggle to match the wealth and growth enjoyed by older segments, Mr Tharman said. Mature economies need to figure out "a new social compact", because commitments made when societies were more rapidly growing "are now found to be unaffordable, either because they were unfunded or because they were funded through debts which are now unsustainable", he pointed out. "Major social and political challenges (are) not being addressed, honestly. And there is as of now no philosophical, political solution on offer." After the speech, a Monetary Authority of Singapore spokesman told BT that Mr Tharman was not referring to Singapore in his mention of mature economies. (Source: The Business Times) MARKET SCOOP AsiaPhos seeks about $24m in IPO Asia Fashion Holdings says it is "likely to remain a going concern" M1, StarHub oppose SingTel ownership of fibre network Singapore's Falcon Energy jumps on broker report No need for retail banks here to be ring-fenced:MAS UOB launches FDI advisory unit in Vietnam MOM raps 10 firms for unfair hiring (Source: The Business Times) KIM ENG Securities says... TAT HONG HOLDINGS | HOLD | TP: S$1.00 We met with management to assess the outlook on the company's respective markets Tat Hong's core market, Australia, is expected to remain weak on the back of a change in the country's political leadership, while earnings from China are supported by reasonable growth from nuclear plant construction works Historically, share price is dependent on Australia activities; therefore, until we see concrete beginnings on Australia's infrastructure projects, we deem it too early to turn positive on Tat Hong just yet We raise our TP to SGD1, pegged to 12.3x FY6/14F PER, in line with its 5-year mean and adjust our earnings forecasts by 2% Upgrade to HOLD While we expect earnings from Australia to remain weak, we find the overall commitment on infrastructure from the Coalition Party to be positive for Tat Hong The party has committed approximately AUD20.4b to infrastructure projects; the question now is execution We forecast a 8% drop in Tat Hong's revenue from general equipment rental in FY6/14 as a halt in public works has been affecting the local construction sector, especially in Queensland and New South Wales Catalysts to watch out for would be the start of infrastructure projects and possible signs of a revival in utilisation rates The weakness in Tat Hong's FY6/14 earnings will be offset by crane rental revenues from ASEAN and China With economic activity in China showing signs of bottoming out, this could support construction activities in China This was validated from China's September PMI rising to the highest since March Tat Hong is focused on cost-cutting measures to soften the impact of depreciation costs from recent crane purchases We expect Tat Hong to consolidate some operations in Singapore and move into Iskandar It has secured a 22-year lease from JTC for a 16,100sqm plot in Tuas, which would allow its 11 Gul Crescent site to be divested through a public tender by Mar 2014 We estimate it could book in around SGD20-25m from this Since our downgrade to SELL from 1QF6/14 disappointing results, Tat Hong has fallen 16%, which we think reflects the abrupt slowdown in infrastructure works in Australia Upgrade to HOLD, for we think the share price will find support at this level, given it trades in-line with its 5-year historical P/B of 0.8x CIMB Securities says ... KEPPEL T & T | OUTPERFORM | TP: S$1.65 We factor in contributions from the new logistics parks in China and Singapore, which raises FY13-15 EPS by 2-6% Our SOP-based target price inches up to S$1.65 We maintain our Outperform call, with new logistics facilities and data centre additions as catalysts Historically, Keppel T&T has relied on its associates' contributions to drive earnings growth; 71-82% of its earnings come from its 20% stake in M1 With the addition of four new logistics facilities and a third data centre in FY14-15, we believe the company's core logistics and data centre operations can contribute to 31-40% of PBT in FY13-16, a significant increase from its historical 17-29% since FY07 In the long term, we believe Keppel T&T's holding company discount can narrow from its historical 20-25% to 10-15% when it builds up its core We estimate that the four new logistics facilities will add 144,000sm of warehouse space to the current 229,000sm of space owned by Keppel T&T and its subsidiaries Given the sheer size of these new facilities, we forecast yoy logistics revenue growth of 16-30% in FY14-15 and we expect the logistics segment to contribute to 39-45% of our earnings growth forecasts for FY14-15 The third data centre, Keppel Datahub 2, will add 6,000sm to the current 12,300sm of data centre space that Keppel T&T runs in Singapore We expect data centres to contribute to 31% of our earnings growth forecasts in FY14-15 Keppel T&T is currently trading at 10.1x rolling forward P/E, 1 s.d. below its historical mean of 11.8x We believe these valuations are undemanding given the 12-18% earnings growth we forecast for FY13-15 with the addition of new logistics and data centre facilities Our SOP-based target price of S$1.65 implies 13.2x forward P/E (1 s.d. above mean), which we believe is warranted given the strong earnings growth DMG OSK Securities says... MARCO POLO MARINE BUY | TP: S$0.61 Last week, we brought a group of investors to MPM's Batam yard We saw all three drydocks busy with repair operations, and the construction of a third-party 8,000bhp AHTS vessel and two similar vessels for its own fleet. In preparation for better shipbuilding times, a new slipway is almost complete Investors were most interested in the company's 20% net margins We maintain our BUY call, SGD0.61 TP In short, this is a yard still busy enough to employ 1,000 workers today The optimal shipyard strategy is to utilise available space for shipbuilding during times of boom, and make facilities improvements during downturns We see this strategy being executed with a new slipway almost complete The recent upturn in commercial shipbuilding is relieving the pressure on offshore asset prices, which should induce a recovery in offshore building prospects MPM and associate PT BBR are on the cusp of renewing their AHTS charters, with current contracts expiring in September to November With AHTS supply still trailing far demand in Indonesia, we are highly confident that each vessel will be re-chartered immediately at prevailing market rates, which are 33% higher The most common questions for management centered on MPM's very high margins and their sustainability Management said its AHTS charter margins are "easily 40%", supporting the findings in our 21 June report, Taking Another Bite Out of The Indonesian Pie With future growth coming from more AHTS vessels joining the fleet and being re-chartered at higher rates, MPM is likely to maintain its high margins No reason for high-return asset-driven company to trade well below book value MPM is trading at 0.8x P/BV, clearly undervaluing its 15% ROE. FY14F P/E is a mere 5x We believe that MPM's quality assets are worth much more, and maintain our BUY call and SGD0.61 TP

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.43

Stock Name: Roxy-Pacific
Company Name: ROXY-PACIFIC HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.76

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: OSK

Price Call: SELL

Target Price: 4.00

Market Compass

11 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

11 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 :It is health that is real wealth and not pieces of gold and silver. - MAHATMA GANDHI Singapore: The Day Ahead SINGAPORE DAYBOOK:China's rig-builders gatecrash big league [SINGAPORE] Despite being relative newcomers to offshore rigs, China-based shipbuilding yards have held on to their lead in rig orders in 2013. This has led analysts like Vincent Fernando from Religare Capital Markets to think of 2013 as the "tipping point" for China's rigbuilding industry. Rigzone data shows China has collected US$5.06 billion in orders for jack-ups, semisubmersibles and tender rigs in the year to date - ahead of US$4.37 billion in the bag for the Singapore powerhouses. Last year, Singapore's Keppel Offshore & Marine and Sembcorp Marine were the world leaders, bagging a record US$13.8 billion in offshore rigbuilding contracts. Mr Fernando thinks that the Chinese yards may break through the stigma of delays and quality issues associated with rigs built by newcomers. They also enjoy the support of their government and of multinationals. (Source: The Business Times) MARKET SCOOP Overseas Union to raise up to S$614m for Reit listing UOB first in Singapore to offer online access to gold, silver accounts S'pore GDP seen picking up in Q2 on pharma rebound, financial services GEHboosts stake in LGlobal Funds to 87.33% Singapore property stabilising, cooling measures stay for now: fin min Fresh grads' starting pay to rise by 2% this year: report Singapore to set aside S$17m for SMEs to improve energy use (Source: The Business Times) DBS VICKERS Securities says... TAT HONG HOLDINGS | BUY | TP: S$1.43 We see two potential downside risks to earnings for the coming quarter in weaker AUD and slower mining and infrastructure spending in Australia 2H13 revenues from Australia fell 12% y-o-y, affected by a slowdown in mining and infrastructure spending These could result in slower equipment sales/rental and translation losses for 1Q14F The outlook for mining in Australia will likely remain weak with infrastructure spending expected to slow down over the next two quarters We now expect less aggressive growth in equipment sales, and general equipment and crane rental business The AUD has also depreciated 9% against the SGD, which could result in translation losses Premised on the above, Australia will potentially drag earnings growth For FY14F, we lowered crawler crane utilisation rate from 77% to 73% and rental rates by 7% to account for slower rentals We also reduced equipment sales revenue growth from 3% to 1% and general equipment rental income growth from 9% to -13% In addition, we factored in S$5.5m impact from a weaker AUD against the SGD in 1QFY14F TAT is currently trading at -0.5SD of its mean valuation, at 9.8x PE Despite near-term headwinds, the stock is attractive as valuation is below average Our target 12x FY14F PE multiple values the stock at S$1.43 OCBC Securities says ... ROXY-PACIFIC HOLDINGS | BUY | TP: S$0.76 ROXY announced that it has acquired, for RM470k, a 47% stake in Macly Equity Sdn Bhd (Macly) which owns a 70k sq ft land site in Kuala Lumpur, Malaysia at Jalan Dewan Sultan Sulaiman We understand this land site was acquired for RM89.8m by Macly and that ROXY is finalizing a JV agreement whereby it would likely fund the remaining commitment via a shareholder loan with the site valued at cost This site has a total GFA of 686k sq ft and is strategically located beside the upcoming Quill City (a 7-acre mixed development on Jalan Sultan Ismail), the Sheraton Imperial Hotel and monorail Stations to Bukit Bintang The site has already received a development order and would likely be developed into a project with a 90:10 mix of residential and retail components We see the project launching for sale by end 2014 with a targeted TOP of 2019 In addition, we forecast a breakeven ASP in the range of RM800-RM850 psf, and selling ASPs of RM1,100 psf and RM2,200 psf for the residential and retail components, respectively This being so, this acquisition would likely accrete 2.4 S-cents to ROXY's RNAV This is ROXY's first acquisition in Kuala Lumpur, Malaysia and we like the group's approach of selecting a site with strong potential while working with a local partner The site is located near the upcoming 6-storey Quill City Mall which is slated to open in time for Hari Raya next year and is reportedly already 50% pre-leased Maintain BUY with a higher fair value of S$0.76 (30% RNAV disc.) from this acquisition, versus S$0.74 previously We see the stock as a compelling risk-reward proposition currently as the group now sits on a whopping S$1,118m of unrecognized development revenue from sold units and enjoys significant diversification from its hotel segment (Grand Roxy Mercure Hotel worth S$0.47 per share) DMG OSK Securities says... SINGAPORE PRESS HOLDINGS | SELL | TP: S$4.00 SPH yesterday filed its preliminary prospectus for SPH REIT with the MAS This follows its earlier announcement (25 Jun 2013) in the wake of market volatility which saw an 18% correction in the Singapore REIT sector SPH REIT expects to raise gross proceeds of between SGD476m to SGD554m (including over-allotment) based on an offering price of SGD0.85 and SGD0.90 respectively About 224.9m (9% stake) will be offered to institutional investors, 84m (3.4% stake) to the public, and 251m (10% stake) to cornerstone investors consisting of GE Life, Hong Leong Asset Management, Morgan Stanley Investment Management, Newton IM and Norges Bank SPH REIT projected FY14 yield of 5.8% to 6.0% compares well to CMT (5.3%) and FCT (5.7%) We expect share price to react positively today as SPH is expected to pay a special dividend of SGD0.18 per share upon a successful SPH REIT listing, increasing FY13 dividend yield from 5.6% to 9.9% However, on a longer term view, we think the stock is fundamentally over-valued and maintain our SELL call, with SOTP TP of SGD4.00

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: CIMB

Price Call: BUY

Target Price: 1.75

Stock Name: HPH Trust US$
Company Name: HUTCHISON PORT HOLDINGS TRUST

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.82

Stock Name: KingsmenC
Company Name: KINGSMEN CREATIVES LTD

Research House: OSK

Price Call: BUY

Target Price: 1.08

Market Compass

10 July 2013~ Good Morning Singapore!

Singapore Idea Snippets:

10 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 :Tell me and I forget. Teach me and I remember. Involve me and I learn. - BENJAMIN FRANKLIN Singapore: The Day Ahead SINGAPORE DAYBOOK:Why banks here weren't fined for rigging rates [SINGAPORE] The Monetary Authority of Singapore (MAS) did not impose fines on the banks whose traders tried to rig financial benchmark rates because rate- setting today is not a regulated activity, Lawrence Wong, Acting Minister for Culture, Community and Youth, told Parliament yesterday. An MAS board member himself, Mr Wong was responding on behalf of Deputy Prime Minister and MAS chairman Tharman Shanmugaratnam to a question raised by Member of Parliament Ang Wei Neng, who had asked whether MAS had been too lenient in its response to findings that there were clear attempts to manipulate rates. Referring to the US$610 million fine imposed on Royal Bank of Scotland (RBS) by UK and US regulators for its traders' rigging of the London interbank offered rate (Libor), Mr Ang said the punishment meted by MAS here was "a light tap on the hand". Mr Wong replied: "MAS is unable to impose a specific fine because . . . we do not regulate rate-setting activities today. Neither do many other jurisdictions." (Source: The Business Times) MARKET SCOOP Europtronic in MOU to sell Singapore unit to WE SPH Reit to be priced at 85-90 Singapore cents per unit JTC awards tender for 3 industrial sites at Tuas South St 6 SIA unveils next generation cabins In Iskandar, SMEs face same old labour crunch Former top China Sky execs no-show at trial China slowing; US, Japan perking up: IMF MAS facilitates availability of RMB to banks (Source: The Business Times) CIMB Securities says... TAT HONG HOLDINGS | OUTPERFORM | TP: S$1.75 The broader market has pulled back from its May high and TAT has not been spared, retreating20% in the last one month As there have been no operational hiccups at the company, market sentiment and the overhang from AIF's voluntary conversion could be the culprits, n our opinion The slight negative aspect of its operations, if any, is currency-related via translation effects Yet, we believe the dent on FY14-15 numbers will only be 2.5-4%,at the most, after speaking with management This is not surprising, as in recent quarters, higher revenue contributions had been flowing in from Singapore and other ASEAN markets, at the expense of Australia Contributions from Australia have been generally affected by weaker demand in the mining sector this year We are sticking to our view that near-term earnings will increasingly be spurred by Singapore and other ASEAN markets (Thomson Line construction in Singapore in 2H13, rail projects in Malaysia and Thailand) and Hong Kong We conservatively lower our FY14-16EPS by 2-4% for lower Australian contributions from A$ weakness Accordingly, we lower our target price, still at11x CY14 P/E (its 5-year average forward P/E) Reiterate Outperform with strong Asian operations still its main catalyst while potential M&As could provide icing on the cake DBS VICKERS Securities says ... HUTCHISON PORT HOLDINGS TRUST | BUY | TP: US$0.82 Volume growth at the Trust's HIT terminals in HK has been below par so far in FY13, with the port workers' strike in April adding to the woes HIT volumes could be down more than 10% y-o-y in 2Q13, with the high base in H12 - arising from higher transhipment activities between newly formed liner alliance partners - further skewing the comparison Yantian Port volumes though remain on course for mid-single digit growth as expected, but overall volumes in FY13 could be flattish, despite contribution from newly acquired ACT terminals in HK But the worst should be over and even though Europe trade remains weak, US volumes show relatively positive signs and upcoming peak season should provide more visibility for investors This was the key message that HPHT communicated during our Pulse of Asia investor conference in Singapore recently US payrolls data came in better than expected recently, and while unemployment rate didn't fall, consumer sentiment is improving and US inventory to sales ratio has maintained its upward momentum, giving us some confidence that trade flows in 2H13 will improve In line with lower volume estimates, we moderate our FY13/14 DPU expectations by about 7%/ 6% to 5.3UScts/ 5.9UScts Our TP is adjusted down to US$0.82 HPHT share price has corrected significantly in line with market sentiment, and we believe it has more than priced in lower DPU expectations Maintain BUY in light of healthy yield promise amid the uncertain macro environment. A trade recovery by 2H13 could provide an additional cyclical leverage boost to the stock price DMG OSK Securities says... KINGSMEN CREATIVES | BUY | TP: S$1.08 Kingsmen Creatives is in a dispute with Premier Inc (Premier) over a purported breach of intellectual property in relation to the work done for the Titanic Exhibition in The Venetian Macau The case is still on-going, but management expects no major impact to its financials. At this juncture, Venetian has only held back SGD0.4m Business fundamentals remain healthy for Kingsmen, with a good pipeline of projects Its success in thematic and scenic construction puts it in a favourable position to secure other theme park projects On top of that, it has a net cash balance of SGD49.3m (SGD0.26 per share) as at end 1Q13 Maintain BUY with TP of SGD1.08

SG: Market Pulse: Sembcorp Industries, Tat Hong (26 Jun 2013)

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD

Research House: OCBC

Price Call: BUY

Target Price: 6.48

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.31

MARKET PULSE: Sembcorp Industries, Tat Hong

26 Jun 2013

KEY IDEA Sembcorp Industries: Not your typical utilities company Summary: Sembcorp Industries (SCI) is a major industrial group primarily involved in the businesses of 1) utilities, 2) marine and 3) urban development. The nature of its utilities business is relatively stable, while growth is driven by asset acquisition and construction. SCI's marine arm is also well-positioned to capitalise on demand from the offshore oil and gas industry, given its market-leading position. Finally, the urban development segment possesses growth potential with its focus on emerging markets. The long-term outlook for its businesses look bright, though the Singapore utilities business may, in the short term, be impacted by an expected increase in competition. The group has been consistent in paying out dividends of at least S$0.15/share each year since 2009, implying a minimum dividend yield of 3.1% at current prices. Initiate with BUY and S$6.48 (based on sum-of-parts method) fair value estimate. MORE REPORTS Tat Hong Holdings: Time to take profit Summary: Since our last upgrade on Tat Hong Holdings ("Poised for Recovery", 9/1/2012), the group's crane fleet grew by ~20% (in tonnage), utilization rate by 5 ppt and rental rates by an estimated 10-15%, resulting in a 66% jump in FY13 PATMI. In our view, the easy money has already been made. Investors who have heeded our call would have made 45% return in 1.5 years and should now consider taking some profit. Looking ahead, the macro environment looks increasingly uncertain with sluggish data points coming out of China. Tat Hong's crane fleet expansion is also expected to slow after a 79% surge in crane tonnage over the past five years. Finally, there is a possible share overhang resulting from private equity AIF Capital's conversion of convertible preference shares to 53.3m ordinary shares. Downgrade to HOLD with lower FV estimate of S$1.31 (previously S$1.75). (Chia Jiunyang)

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

NEWS HEADLINES

- AusGroup is suing Karara Mining Limited for A$54.7m for works carried out in Western Australia. - Baker Technology has divested its entire 20.29% stake in Discovery Offshore SA for NOK199m (S$41.9m). - Swissco has secured contracts worth S$8.24m for three of its crew boats. - Yongnam Holdings has secured two new specialist civil engineering subcontracts worth HK$166m (S$27m). - Z-Obee's FY13 net income fell 17% to US$4.26m as impairment losses from the group's asset portfolio wiped out an increase in fair value gains.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: AscendasHT
Company Name: ASCENDAS HOSPITALITY TRUST

Research House: Nomura

Price Call: HOLD

Target Price: 0.92

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: CIMB

Price Call: BUY

Target Price: 1.80

Stock Name: F & N
Company Name: FRASER AND NEAVE, LIMITED

Research House: Deutsche Bank

Price Call: HOLD

Target Price: 9.83

Market Compass

17 June 2013~ Good Morning Singapore!

Singapore Idea Snippets:

17 June 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 : Small deeds done are better than great deeds planned. - PETER MARSHALL Singapore: The Day Ahead SINGAPORE DAYBOOK:Outsourced service sector caught in bind. Rising costs, tough tender pricing make it hard for many firms to raise wages [SINGAPORE] The recent wage hike recommendation by the National Wages Council (NWC) has drawn much cheers, and deservingly so in the interest of the Republic's low-wage workers. But are companies in low-wage sectors like cleaning, landscaping, security and laundry services able to fulfil their dual roles as employers and outsourced service providers amid the current business environment? As it is, overall business costs in these industries have been on the rise, and are expected to continue surging this year. Major players from the respective industries estimate that overall business costs could go up by 5 per cent in landscaping, 10 per cent in security, and up to 25 per cent in laundry. With labour costs constituting about 40 per cent of overall business costs in the laundry sector, and a further 70 to 80 per cent in the cleaning, landscaping and security sectors, the moral obligation to raise wages is a challenging one to meet, especially when service providers face difficulties in passing on enough increases in costs to stay viable. To make matters worse, existing cost challenges caused by the tight labour market - driven by the foreign worker levies and dependency ratio ceilings, as well as the lack of Singaporean workers - have exacerbated service providers' inabilities to pass on costs. This has further crippled their abilities as employers to increase salaries for low-wage workers. (Source: The Business Times) MARKET SCOOP UBS says cooperating with Singapore regulator in rate review Sinapore revamps benchmark rate setting KXD Digital Entertainment gets lifeline S'pore retail sales down 0.5% in April SIAS bullish on F&B sectors OCBC cuts CDL Hospitality target, keeps 'hold' S'pore May exports likely flat from year ago Oxley unit buys Cambodian land for US$4.1m March jobless rate at 1.9%: MOM (Source: The Business Times) NOMURA Securities says... ASCENDAS HOSPITALITY TRUST | NEUTRAL | TP: S$0.92 The management team of Ascendas Hospitality Trust (ASHT) attended the Nomura Investment Forum Asia (NIFA) conference held over June 10-12 According to management, the timing of ASHT's Park Hotel acquisition and subsequent equity raising exercise in hindsight could have been better Recent macroeconomic uncertainties, coupled with the spike in global interest rates, have placed downward pressure on REITs' valuations and dampened investment appetite Management indicated that the A$30m asset enhancement initiatives (AEI) on ASHT's Australia (AU) portfolio continue to progress as planned, although the uplift to RevPAR has yet to materialize The weakening of demand in resource-driven cities like Brisbane has put pressure on ADRs and the manager has opted to put more emphasis on maintaining higher levels of occupancy We also understand that certain local government agencies have cut back conference/travel budgets, which have translated into weakened demand for conference and business space Nonetheless, we have factored in a slower RevPAR growth outlook for the trust's AU portfolio The trust's master-leased hotel (Ariake Sunroute) in Japan has been impacted negatively by the much weakened yen Book value has taken a hit of 17%, down to SGD210.7mn Whilst the manager has entered into forward contracts to hedge distributions, the asset value of the hotel remains un-hedged and could thus face further downside risk should the yen continue to depreciate At current levels, ASHT is trading at a FY14F DPU yield of 7.2%, implying a trading discount of 0.6% to CDL Hospitality (CDREIT SP), vs. a historical average discount of 1.6% We expect the stock price to remain volatile in the near term and maintain Neutral CIMB Securities says ... TAT HONG HOLDINGS | OUTPERFORM | TP: S$1.80 We are not alarmed by the drop in the group's crawler/mobile-crane utilisation in 4QFY13 There were two reasons for that: 1) slight delays in the redeployment of its fleet in Thailand, from late Mar to Apr/May. The cranes have now been redeployed for various projects within the country; and 2) TAT had actually eliminated lorry cranes from this segment in FY13, which resulted in perceived lower utilisation rates Like-for-like, its optimised utilisation rate was still a respectable low 70+% That said, we lower our blended utilisation for this division from 75% to 72% for FY14 to be more conservative Higher revenue contributions had been coming from Singapore and other ASEAN markets, at the expense of Australia in recent quarters We stick to our view that earnings will largely be powered by Singapore and ASEAN going forward Crane rental growth in Hong Kong should follow next We believe that this will translate into better margin sustainability as crane rentals offer double the typical distribution margins Perhaps the only non-operational issue that can cause its share overhang is AIF CRPS conversion Fundamentally, the group should be able to turn in good performances with efficient capital usage, organically and without the need for massive capex Accretive M&As with the aid of a better balance sheet could catapult TAT to higher growth, in our view We lower our target price, still based on 11x CY14 P/E (its 5-year average forward P/E) Reiterate Outperform with strong Asian operations still its main catalyst while potential M&As could catapult TAT's growth DEUTSCHE BANK says... FRASER & NEAVE LTD | HOLD | TP: S$9.83 Fraser & Neave in a 40:30:30 JV with Far East Organization and Sekisui House has submitted the top bid of S$257m (S$533psf GFA), 3% above the next highest bidder MCC Land for a residential site at Fernvale Close The 482,131 sqft GFA site is estimated to yield c.490 units Interest in the well located site was strong, with 9 bidders taking part, with the winning bid coming in above the top range of market expectations of S$500-520psf ppr We believe that the strong interest was driven by the site's location near the Layar LRT station, Sengkang Bus Interchange, Compass Point Shopping Centre, and Nan Chiau Primary School Recall that City Developments acquired an adjacent EC site in November 2012 at S$296psf We estimate a breakeven of S$907psf. Assuming an ASP of S$1050; this would imply a margin of 14% and c.1.3cts accretion to our RNAV As a comparison, City Development's Jewel@Buangkok, located 1 MRT stop away recently launched at an ASP of S$1150psf, while H2O Residences (launched in 1Q11), located beside the site last transacted at c.S$993psf in April La Fiesta, located closer to the Sengkang MRT was launched at c.S$1175psf With strategic direction still unclear and free float restoration an overhang, we maintain our Hold recommendation with the current share price implying 13% upside to our target price

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.80

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: Nomura

Price Call: BUY

Target Price: 5.20

Market Compass

30 May 2013~ Good Morning Singapore!

Singapore Idea Snippets:

30 May 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 :The more you trust your intuition, the more empowered you become, the stronger you become, and the happier you become. - GISELE BUNDCHEN Singapore: The Day Ahead SINGAPORE DAYBOOK:Olam rolls up its sleeves to unlock value. Deal in US and tie-up in Nigeria kick-start its new asset-light strategy [SINGAPORE] Olam International is hard at work, seeking to reinvent itself. In his first media interview since the firm released the results of its strategic review on April 25, chief executive Sunny Verghese told The Business Times that Olam is now in "active discussions" with investors on possible sale- and-leaseback transactions to optimise its balance sheet. The firm also plans to pursue joint ventures and strategic alliances on certain platforms, to monetise the intrinsic value of the firm. "(There are) a lot of potential partners, a lot of discussions underway," said Mr Verghese. He was visibly more relaxed than six months ago, when the firm came under attack from short-seller Muddy Waters, which accused Olam of being a "fiscal black box". (Source: The Business Times) MARKET SCOOP Metro'searnings plunge without disposal gain; cuts special dividends Chasen clinches 7 new projects worth S$19.3m United Envirotech's FY13 net profit up on higher sales DBS launches dim sum bonds in Singapore Mapletree awarded HK site for logistics development Willas-Array FY profit rises 3% despite fall in revenue Scorpio East rejects major shareholder's alternative fundraising plan Carlyle said to eye bids for SingTel Australia arm Oxley makes Malaysian acquisition (Source: The Business Times) OCBC Securities says... UNITED ENVIROTECH | BUY | TP: S$0.90 United Envirotech Ltd (UEL) reported its FY13 results last night, with revenue jumping 117% to S$185.0m, or just 2% above our forecast, aided by higher engineering Net profit surged 182% to S$29.5m, and was about 1.6% ahead of our estimate business (+132%) and also the 77% jump in water treatment business UEL also declared a final dividend of S$0.005/share Going forward, management continues to see growing demand for membrane-based eater and waste-water treatment services, especially in China; this mainly driven by stricter discharge limits imposed by the Chinese government and the shortage of water supply in various parts of the mainland We will be speaking to management shortly to get greater clarity on its plans Meanwhile, we are placing our Buy rating and S$0.90 fair value under review DBS VICKERS Securities says ... TAT HONG HOLDINGS | BUY | TP:S$1.80 FY13 revenue of S$837m and earnings of S$70m were in line with our forecasts Revenue grew 16%, driven by stronger tower and mobile crane rental segments which rose 27% and 37% respectively, through better utilisation and rental rates TAT declared final DPS of 2.5 Scts, bringing full year DPS to 4 Scts This was a surprise as we had expected total DPS of 2.5 Scts, similar to last year Infrastructure developments regionally continue to be robust In Singapore, the construction of the Thomson MRT Line will commence from 2H13 and there are other rail projects in ASEAN such as Malaysia and Thailand We expect TAT to be actively supplying its cranes for these projects We expect both rental rates and utilisation rates to remain strong given buoyant demand for cranes in regional infrastructure projects We are leaving our earnings estimates and TP intact Valuations remain compelling with the stock trading at an attractive 10x FY14F earnings currently Our S$1.80 TP is based on 12x FY14F earnings NOMURA Securities says... SEMBCORP MARINE | BUY | TP:S$5.20 Sembcorp Marine's Jurong shipyard today reported a new ultrahigh specification JU order win of USD 596mn from Noble Corporation with an option for an additional unit The rig will be delivered in 1Q16 and deployed for work in the North Sea The rig, which will be based on Gusto MSC CJ-70 design, is an enhanced version of Statoil's "Cat J" specifications With the new order secured today, SMM's new order wins for the year now stand at ~SGD 2.4bn New order win testament to SMM's established offshore reputation All eight such orders placed since 2001 (excluding today's order) have been secured by Singapore yards (six by Keppel and two by SMM) With brent oil prices continuing to trend above USD100/bbl and a rising oil demand outlook in the medium to long term, momentum for offshore drilling continues to be strong Additionally, recent announcements by Brazil, Australia and Indonesia to award offshore licenses for hydrocarbon exploration are likely to further boost demand for rigs SMM has had a strong start to 2013 with new order wins of ~SGD2.4bn YTD SMM's net orderbook stood at SGD13.6bn at the release of its 1Q13 results While semi-sub orders have been elusive for a while now and drillship orders have dried up in anticipation of a strong delivery pipeline, JU orders have witnessed a resurgence in the past six months It is currently trading at FY13F and FY14F P/E of 17.8x and 15.8x, respectively vs its historical P/E band of 8-28x Our target price of SGD5.20 is based on our sum-of-the-parts (SOTP) valuation, comprising a DCF valuation (WACC 7%, 1% terminal growth over a 15-year period)of the group's shipyard businesses, which includes its three Singapore yards, including Cosco Shipyard group and its remaining 4.8% stake in listed Cosco Corp

OCBC keeps Tat Hong at Buy; $1.75 fair value

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.75

OCBC keeps Tat Hong Holdings (T03.SG) at Buy with unchanged $1.75 fair value estimate after the company reported revenue and net profit of $837 million (up 16%) and $70 million (up 67%) respectively for FY13.

The house notes that Tat Hong's gross profit margin improved to 37.6% for FY13 vs 36.5% in FY12 due to greater contribution from the higher margin crane rental and tower crane businesses.

"The outlook for its key markets remains positive, underpinned by a number of infrastructure projects. However, management believes it is time to slow down its fleet expansion, after a 79% surge in fleet tonnage in the past 5 years," OCBC says.

Looking ahead, the house expects the company to focus on raising its crane productivity, and reducing operating costs through the use of its new yard in Iskandar. The stock is recently +0.7% at $1.52.

CIMB keeps Tat Hong at Outperform, trims target

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: CIMB

Price Call: BUY

Target Price: 1.83

CIMB maintains Tat Hong's (T03.SG) Outperform rating, citing strong Asian and Australian operations.

The company posted another year of strong revenue (FY 2013 rising 16% on-year), while 4Q and FY2013 core profits came in-line with its and consensus expectations, forming 20%/98% of its full-year forecast. It however, trims the target to S$1.83 from S$1.90 after lowering FY2014-2016 core profit estimates due to expense-related items.

The company has proposed a final dividend of 2.5 cents per share for a total of 4 cents/share in FY2013 vs 2.5 cents/share in FY2012, which is "consistent with previous payout ratios of 30%-35%," CIMB says; "(Tat Hong's) business has a lot of positive operating leverage that can be unlocked via better working-capital management," while "its high utilisation rate in the Asia-Pacific Rim guarantees decent cash flow."

The house notes the share price outperformance over the past year should persist on earnings sustainability and potential M&As. Tat Hong is up 0.3% at $1.515.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.78

Market Compass

14 May 2013~ Good Morning Singapore!

Singapore Idea Snippets:

14 May 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 : Being an intellectual creates a lot of questions and no answers. - JANIS JOPLIN Singapore: The Day Ahead SINGAPORE DAYBOOK:Stocks smile in the land of the diving yen. Yen may continue its freefall after briefly breaching 102 mark against US dollar THE yen dipped briefly below 102 to the dollar yesterday in Tokyo - its lowest level in 55 months - and appeared headed lower still after the G-7 finance ministers' meeting in Britain at the weekend avoided any censure of the Bank of Japan for its mega monetary easing that has sent the currency plunging by 10 per cent since April 4. It traded as low as l02.15 to the dollar after markets opened in Tokyo although some profit taking brought the rate back up to 101.60 by the close. Most dealers appear convinced that the yen still has nowhere to go but down for now, after breaching the key 100 to the dollar barrier last week. Minori Uchida, chief foreign exchange analyst at the Bank of Tokyo-Mitsubishi UFJ in Tokyo suggested yesterday that "if or when (the yen) gets to 105 then people might start to say it's too weak" but he acknowledged that there is little consensus on where the yen's slide might end. Buoyed by the currency's continuing fall and the dramatically positive impact this is having on Japanese corporate profits and on share prices, the Nikkei 225 stock average climbed a further 1.2 per cent yesterday to reach its highest level since December 2007 at 14,782.21. MARKET SCOOP YanlordQ1 net halves on translation losses City Development Q1 net profit falls 12% Guthrie GTS Q1 net profit down 4.8% Straits Trading accepts UE's takeover of WBL GoodpackQ3 net profit down 5.9% Golden Agri profits fall 30% Wing Tai Q3 net profit more than doubles to S$94.6m China April factory output up 9.3% y/y, misses f'cast MAYBANK KIM ENG Securities says... TAT HONG HOLDINGS | BUY | TP: S$1.78 Tat Hong will announce its 4QFY3/13 results on 28 May We expect a strong finish to the year with 4Q revenue of SGD232m and net profit of SGD17m, up 27% and 50% yoy respectively Crane Rental and Tower Crane are expected to drive the growth; forecast 41% and 22% FY3/13 revenue growth in those two sectors For Crane Rental, we expect new contracts in the pipeline to drive utilization higher Current utilization rate of 71% have ample headroom to improve vs peak utilization of 80% Our current low single digit rental rate increase in FY14/15 also has upside potential Further growth could come from the expansion of fleet size Rising labour cost and shortage of crane operators are two concerns for this industry Tat Hong shares have been shorted heavily since last month after AIF converted 53m convertible preference shares into common shares We think such potential selling will only have a short term impact on share price and in the long term, we view it positively as it will improve the liquidity of the stock We continue to see Tat Hong as the best proxy to ASEAN infrastructure and Australia oil and gas sector play CIMB Securities says ... FRASER & NEAVE | OUTPERFORM | TP:S$10.03 2H13 core earnings formed 39% of our and consensus's full-year estimate We maintain our core EPS estimates and target price on 20% discount to its property RNAV Group revenue in 2Q13 rose 17% yoy, buoyed by a strong F&B segment Myanmar brewery revenue also rose 33% yoy Overall, PBIT from F&B jumped 44% yoy In properties, Twin Fountains, its last site in Singapore, was launched recently and is over 2.3x subscribed FNN still has S$3.4bn of unbooked presales FNN has announced that it will return S$4.73bn or S$3.28 (29% of SOP) to shareholders in cash via capital reduction FNN explained this will help it achieve a more efficient capital structure and distribute the gains from the APB sale Its balance sheet will turn from net cash to one with a net gearing of 0.17x while its RNAV is expected to be around S$7.75 after the capital reduction We estimate investors will be getting its property business at an implied discount to RNAV of 43% UOB KAY HIAN says... PARKWAY LIFE REIT | HOLD | TP:S$2.70 Parkway Life REIT (PLife) reported 1Q13 distributable income of S$16.0m (+2.9% yoy, -1.8% qoq) or a DPU of 2.64 S cents (+2.9% yoy, -1.9% qoq) Although net property income was impacted by yen depreciation (-2.7% qoq to S$21.5m), DPU impact was mitigated by the yen net income hedges (until 2017), which were established in 2012 Gearing fell to 31.6% from a high of 36.4% in 2Q12 due to the depreciation of the yen and revaluation gains In our discussions with management, acquisitions are likely to emerge from Japan and Malaysia, while Australia is also starting to look interesting as domestic financing costs decline Asset enhancement initiative (AEI) still on the cards for Mount Elizabeth hospital,which has been facing high utilisation for its hospital beds Acquisitions of nursing homes in Japan are likely to continue due to PLife's strategic partnership with Japan nursing home operators, but remain opportunistic as competition intensifies due to rising liquidity spurred by monetary easing Beneficiary of yen depreciation as gearing and interest costs fall We have adjusted 2013-15 DPU by +1.9% to +3.7% to factor in lower financing costs arising from the depreciating yen We downgrade to HOLD with a higher target price of S$2.70 (from S$2.62) We use the dividend discount model (required rate of return: 5.9%, terminal growth: 2.0%) to value PLife

MARKET PULSE: Tat Hong, Raffles Medical, STX OSV (14 Mar 2013)

Stock Name: Tat Hong
Company Name: TAT HONG HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: HOLD

Target Price: 3.01

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.52

MARKET PULSE: Tat Hong, Raffles Medical, STX OSV

14 Mar 2013

KEY IDEA Tat Hong Holdings: Outlook remains positive Tat Hong's PATMI grew by 63% to S$42m in FY12 (financial year ended Mar 2012) and is expected to increase by a further 65% to S$70m in FY13F. The sharp improvements were mainly due to improved crane utilization and higher charter rates. With current crane utilization at around 70% levels, we think that FY14-15F PATMI growth will moderate to around 10-30%, mainly driven by crane fleet expansion. On this point, we note that Tat Hong had completed a share placement of S$82m (in Sep-2012), half of which was earmarked for fleet expansion. We remain positive on the group's outlook over the medium term and keep our BUY rating and S$1.75 fair value estimate unchanged. Risks to our projection include (i) a sharp slowdown in its Australia business and (ii) unexpected delays in Chinese infrastructure projects. (Chia Jiunyang) MORE REPORTS Raffles Medical Group: Unsuccessful in Hong Kong land tender Raffles Medical Group (RMG) announced last evening that it was not successful in its tender for the site at Aberdeen Inland Lot No. 458 in Wong Chuk Hang, Hong Kong, for the development of a private hospital. We note from Hong Kong's Food and Health Bureau's announcement that the site was awarded to GHK Hospital Limited, a 60%-owned subsidiary of Parkway HK Holdings, which in turn is a wholly-owned indirect subsidiary of IHH Healthcare Berhad [NON-RATED]. The winning bid for the land premium was HKD1.688b (out of three bids). No details were disclosed about RMG's bid amount. Total capex for the project would be ~HKD5b (inclusive of the land cost), according to IHH. This is a second setback for RMG recently, as it had also failed to obtain regulatory approval for its first application for the change of use of its commercial podium at 30 Bideford Road for medical clinics (announced on 17 Oct 2012). However, RMG has since resubmitted a second application (around Dec 2012) and is currently awaiting a reply from the relevant authorities. It is also exploring a proposed development of an integrated international hospital in Shenzhen, China, via a non-binding Letter of Intent with a subsidiary of China Merchants Group. Maintain HOLDand S$3.01 fair value estimate on RMG, pegged to 27x FY13F EPS. (Wong Teck Ching Andy) STX OSV: Fincantieri owns 55.6% of STX OSV at close of offer At the close of its mandatory general offer yesterday, Italian shipbuilder Fincantieri received valid acceptance of only 4.9%, bringing its shareholding in STX OSV to 55.6% (previously 50.75%). This development is unsurprising to us given that the board of directors has recommended shareholders to reject the S$1.22 offer as it is not compelling. We currently have a BUY rating with a S$1.52 fair value estimate on the stock. (Chia Jiunyang)

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NEWS HEADLINES - IHH Healthcare's 60%-owned GHK Hospital has purchased a land parcel in Hong Kong for HK$1.69b (S$271m) to build and run a private hospital. - Datapulse Technology's net profit fell 12.8% YoY to S$1.9m for 2Q ended Jan 31. - Certificate of entitlement (COE) premiums for big cars slumped drastically in the latest round of bidding, emerging lower than small cars. - A mega passenger terminal could be built on a site in Changi East, said Minister of State for Transport Josephine Teo yesterday. - Singapore'a Transport Minister said that competition among public transport operators might heat up in the future, with foreign firms entering the fray. - US stocks edged up on Wednesday, with the Dow rising for the ninth straight session to another record, buoyed by surprisingly strong retail sales.