SG: MARKET PULSE: Raffles Med, ST Eng, TEE (29 Oct 2013)

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 3.61

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.11

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.35

MARKET PULSE: Raffles Med, ST Eng, TEE

29 Oct 2013

KEY IDEA Raffles Medical Group: Still delivering growth Raffles Medical Group (RMG) reported 3Q13 revenue and PATMI growth of 8.0% and 10.3% YoY to S$85.1m and S$13.9m, such that 9M13 figures formed 72.8% and 68.7% of our full-year estimates, respectively. This was within our expectations. Looking ahead, RMG is seeking to finalise the negotiations for its proposed China hospital expansion plans with its partners; while the completion of sale of its Thong Sia building in 4Q13 would boost its FY13F net cash balance to S$241m (based on our estimates). We incorporate the gain in sale of the property in our forecasts and our FY13 PATMI estimate is bumped up by 35.2% to S$82.1m. Nevertheless, we view this gain as exceptional in nature and our valuation on RMG is also unaffected as it is premised on 29x FY14F EPS. Maintain BUY and fair value estimate of S$3.61 on RMG. (Wong Teck Ching Andy) MORE REPORTS ST Engineering: ST Aerospace wins Jetstar Asia line maintenance contract ST Aerospace, the aerospace arm of ST Engineering (STE), and Jetstar Asia have announced the signing of a three-year line maintenance contract. The agreement covers a full suite of line maintenance support for Jetstar Asia's existing and future fleet of Airbus A320 aircraft. ST Aerospace has been supporting Jetstar Asia since 2004 for a wide range of maintenance services on their fleet of A320 aircraft. The contract is not expected to have any material impact on the consolidated net tangible assets per share and EPS of STE for the current financial year. Hence, we maintain our fair value estimate of S$4.11 and HOLD rating on STE. (Sarah Ong) TEE International: Conditional LOI for Marina South Project Tee International announced that it has signed a conditional letter of intent with Hyundai Mechanical and Construction Co., Ltd to deliver a S$142m Mechanical and Electrical (M&E) Package for the Marina South Mixed Development Project. The package is expected to have a duration of 28 months. We see this as a positive development which would significantly replenish the group's order book. Together with the Marina One Package, the group's current outstanding order book would stand at approximately S$317m. Maintain HOLD on Tee International with a fair value estimate of S$0.35. (Eli Lee)

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NEWS HEADLINES - US stock indexes posted a narrowly mixed finish in choppy trading Mon, with the S&P 500 setting a record high for a second straight session after an industrial-production reading beat expectations but a pending-home-sales gauge missed forecasts. - Singapore Exchange could consider rebates for high-frequency market makers to boost liquidity in the marketplace, said a senior executive of the bourse operator. - Straits Trading Company is buying into ARA Asset Management and is also setting up a co-investment company that will eventually boast a total capital commitment of up to S$950m. - Rex International is forming a joint venture with Swiss company Ogsonic to provide a proprietary well stimulation technology to oil production and oil service companies.

SG: MARKET PULSE: Tee Int'l, China Environment (7 Oct 2013)

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.38

MARKET PULSE: Tee Int'l, China Environment

7 Oct 2013

KEY IDEA TEE International: Scrip dividend scheme in place Summary: Tee International announced that its scrip dividend scheme will apply to the final tax-exempt (one-tier) dividend of 2.5 S-cents per ordinary share for the financial year ended 31 May 2013. Management updates that the price for the new shares issued under the scheme will be set at not more than a 10% discount, nor shall it exceed the average of the last traded prices for the period between 9 Oct 2013 and 11 Oct 2013 (both dates included). We believe this scrip dividend scheme allows shareholders who are looking to re-invest dividends into the counter to do so conveniently, and also enable the group to retain such capital for allocation into future opportunities. While we hold our fair value estimate of S$0.38 per share unchanged, we are upgrading our rating to a BUY (from hold previously) on valuation grounds as the share price has weakened marginally from our last update. (Eli Lee) MORE REPORTS China Environment: Focus on air pollution control Summary: China Environment Ltd (CEL) is a provider of industrial waste gas treatment solutions in China, which is likely to benefit from the Chinese government's increased focus on cleaning up the environment in China. The Chinese government has reiterated its stance to clean up the environment, this time with the intent to spend RMB1.7t to combat air pollution, where a key focus is on reducing the amount of PM2.5 particle in the air. With its new facility in Anhui nearing completion, which will increase its capacity to process 80k tonnes of steel to over 350k tonnes, as well as the recent RMB80m share place, CEL feels that it has sufficient working capital to take on bigger and more jobs. We currently do not have a rating on the stock. (Carey Wong)

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NEWS HEADLINES - US stocks ended higher Fri but closed mostly lower for the week, as investors stayed sensitive to news about the government shutdown. - KS Energy Limited has extended its reach into Mexico with the signing of a memorandum of agreement with one of Mexico's renowned conglomerate Empresas ICA, S.A.B. de C.V. - Blumont Group has called off plans to buy Australia-listed Cokal Ltd for S$146m for now, after its shares came crashing down after announcing the deal. - BreadTalk wants to more than double its revenue to S$1b by 2016, and to have more than 2,000 outlets across its business segments by 2018. - Indofood's S$1.12 a share general offer for China Minzhong is "not fair but reasonable", said the independent financial adviser appointed by China Minzhong's directors. - Keppel Offshore & Marine has signed a Memorandum of Understanding with two Mexican oil majors, to jointly develop, own and operate a yard facility there.

SG: MARKET PULSE: GAR, CDLHT, Tee Intl, Telcos, First REIT, Lian Beng, Swiber (29 Jul 2013)

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.57

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: HOLD

Target Price: 1.73

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.38

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

Research House: OCBC

Price Call: HOLD

Target Price: 1.20

MARKET PULSE: GAR, CDLHT, Tee Intl, Telcos, First REIT, Lian Beng, Swiber

29 Jul 2013

KEY IDEA Golden Agri-Resources: Downgrade to HOLD Summary: Golden Agri-Resources (GAR), being one of the largest palm oil plantation owners in the world, is likely to remain vulnerable to further pullbacks in CPO prices, which had recently hit their lowest levels since Nov 2009. In view of the more muted outlook for CPO, we deem it prudent to lower our 2013 forecast to US$700/ton from US$750 previously. This results in our FY13 revenue and core earnings estimates easing by 2%. Our fair value also drops from S$0.63 to S$0.57 as we are also lowering our valuation peg from 12.5x previously to 11x. Given the limited upside and still uncertain outlook, we downgrade our call to HOLD. (Carey Wong) MORE REPORTS CDL Hospitality Trusts: 2Q13 results miss street's expectations Summary: CDL Hospitality Trusts reported a 4.4% YoY fall in net property income in 2Q13 to S$32.6m. Income available for distribution contracted 6.4% YoY to S$29.4m. 2Q13 RevPAR for the Singapore hotels fell 8.5% YoY to S$193, affected by increased competition, weaker corporate demand and the absence of the biennial Food & Hotel Asia event in Apr. The results were in line with our expectations, but missed the street's. Estimating the financial effect of the planned closure of most of the Orchard Hotel Shopping Arcade for AEI (excluding the Galleria) from late 2013, and adjusting our assumptions for the non-Singapore hotels, our FY13F DPU falls to 10.4 S cents from 10.9 S cents. Incorporating a risk-free rate of 2.5% (versus 2.2% previously) into our model, our FV drops to S$1.73 from S$1.79. We maintain a HOLD rating on CDLHT. (Sarah Ong) TEE International: FY13 earnings marred by admin expenses Summary: TEE reported 4Q13 PATMI of S$6.4m, down 45% YoY mostly due to a S$4.1m increase in administrative expenses. Due to this, FY13 PATMI of S$13.1m was judged to be somewhat below our full year expectations. The order book of the Engineering segment now stands at S$215.4m, which remains fairly stable on a YoY basis. We like management's active stance on seeking accretive acquisitions; note that TEE recently announced an MOU to invest in a waste-water treatment plant in Huzhou, China and also formed a JV for a S$8.6m 3-year contract for a water management project near Chao Phaya River, Thailand. We currently have a HOLD rating on TEE with a fair value estimate of S$0.38. However, given the attractive dividend of 2.50 S-cents ahead, which translates to a yield of 6.8% on the last closing price of S$0.37, we believe the downside may be capped from here. (Eli Lee) Telco Sector - SingTel to offer BPL cross carriage Summary: 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. For now, we maintain our NEUTRAL rating on the sector. While we also maintain our HOLD rating on SingTel, we are putting our Hold rating on StarHub under review. (Carey Wong) First REIT: 2Q13 results within expectations Summary: First REIT (FREIT) reported its 2Q13 results which were within our expectations. Gross revenue surged 43.4% YoY to S$20.1m due largely to contribution from its four newly acquired properties in Indonesia (two acquired in Nov 2012 and two in May 2013). Distributable amount to unitholders rose 4.0% YoY to S$12.7m but DPU fell 4.1% YoY to 1.85 S cents. However, if we strip out an exceptional distribution in 2Q12, FREIT's distributable amount to unitholders and DPU would instead have increased by 26.6% and 16.4%, respectively. 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 payment of its acquisitions), only the remaining 0.86 S cents will be paid to unitholders. For 1H13, gross revenue rose 34.2% to S$37.6m and constituted 45.2% of our full-year projection. DPU (after stripping out the special distribution highlighted earlier) increased 12.9% to 3.59 S cents, or 45.5% of our FY13 forecast. We expect 2H13 to be stronger on a HoH basis due to a full-quarter of contribution beginning 3Q13 from the two hospitals acquired in May 2013. We will provide more details after the analyst briefing. Meanwhile, we maintain our HOLD rating and S$1.20 fair value estimate on FREIT. (Wong Teck Ching Andy) Lian Beng: Construction order book at S$1.3b Summary: Lian Beng announced FY13 (ended 31 May 2013) PATMI of S$39.4m - down 23.4% - this is mostly due to an absence of a S$7.9m gain from an investment property sale in FY12. FY13 topline, however, increased 13.6% to S$505.6m on higher revenue recognition from its construction and ready-mixed concrete segments. We note that Lian Beng's construction books as at end May 13 are at a very healthy level of S$1.3b, which is expected to underpin firm revenue numbers over the next 2-3 years. We would speak with management regarding FY13 results later today and, in the meantime, our rating and fair value estimate is under review. (Eli Lee) Swiber Holdings: Wins US$435m contracts; sets up Islamic Trust Certificates Summary: Swiber Holdings announced that it has clinched contracts worth about US$435m, US$330m of which were secured under the Swiber group and about US$105m under a joint venture company. Work will commence immediately and is expected to be completed by 2015. Meanwhile an SPV of the company has also established a US$500m multicurrency Islamic Trust Certificates Issue Programme; proceeds from new issues will be used to refinance existing borrowings and fund capital expenditure, amongst others. Recall that the company had said that it was exploring options to establish Islamic Trust Certificates in Jun. Maintain BUY with S$0.86 fair value estimate. (Low Pei Han)

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NEWS HEADLINES - US stocks finished with slight gains on Fri, lifting the Dow industrials to a fifth weekly gain, after Wall Street dug through earnings reports that included a better-than-expected profit from Starbucks Corp. - The construction industry may be able to reduce its overall workforce by 20-30% by 2020 if it attains a similar increase in productivity, according to the chief executive of the Building and Construction Authority, John Keung. - Pockets of price falls have surfaced in the latest official stats on the state of Singapore's private property markets, including the industrial space and some residential categories. However, the property market, as a whole, still remains firm. - Singapore's manufacturing sector shrank a slightly larger than expected 5.9% in Jun compared to a year ago, due to a sharp fall in pharmaceutical output. - Advance SCT Ltd said the suspension of its arbitration proceedings with plaintiff, Qingyuan Shengli Copper Material Co Ltd, is likely to be lifted over the next few weeks. - Property investment group MYP plans to buy 80,000 sqm of retail properties in Bali in a deal valued at S$43.3m.

SG: MARKET PULSE: Sembcorp Marine, FCT, KSH, TEE (3 Apr 2013)

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.64

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.32

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.62

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

MARKET PULSE: Sembcorp Marine, FCT, KSH, TEE

3 Apr 2013

KEY IDEA Sembcorp Marine: More prudent on margins Sembcorp Marine (SMM) is currently building a 82.5ha yard in Brazil to undertake drillship construction, amongst others. Should inflation in Brazil continue to be unrelenting, SMM may face further margin pressures from labour costs, especially since there is already a shortage of skilled labour in the country. Over the longer term, however, we believe that SMM's foray into the drillship business puts it in good stead to secure more drillship orders, diversifying its product range. In the shorter term, however, we prefer to be more prudent on the group's operating margin assumptions, and lower these to 12.1% and 12.3% for FY13F and FY14, respectively (2012: 12.5%). As such, our SOTP-based fair value estimate slips from S$5.84 to S$5.64. Maintain BUY. (Low Pei Han) MORE REPORTS Frasers Centrepoint Trust: Downgrade to HOLD - fair value hit Frasers Centrepoint Trust (FCT) has enjoyed a good run-up in its unit price, clocking a 7.0% return YTD and 40.8% return YoY. This compares significantly to the 5.7% YTD and 31.4% YoY increase seen by the FTSE ST REIT Index. Now trading near its historical high and our fair value, FCT is the most expensive (P/B of 1.40x) when compared to its local retail peers (1.18x) and the S-REITs sector average (1.17x). As such, we believe that most of the good news has been priced in. While the asset injection of Changi City Point into FCT's portfolio may possibly be a catalyst to its unit price and DPU growth, the timeline is uncertain as the regulatory procedures for the strata division into its retail, business park and hospitality components is a lengthy process. In view of the limited upside potential in the near term, we now downgrade FCT from Buy to HOLDon valuation grounds. We recommend switching FCT to CapitaMall Trust [BUY, S$2.32 FV] as a cheaper alternative to blue-chip local retail play with exposure to equally resilient suburban portfolio assets. (Kevin Tan) KSH Holdings: Awarded S$60m JTC construction contract KSH announced yesterday that it was awarded a S$60m construction contract by Jurong Town Corporation ("JTC") for a district cooling system plant at Ayer Rajah Ave. We understand management wanted to diversify their condominium-heavy construction book with a public project, and gross margins continue to exceed a 10% hurdle rate. In 2013 to date, order book replenishment now cumulates to S$202m - tracking somewhat above forecast and exceeding the S$161m total last year. The order book now stands at S$489m. Given its momentum, we are reviewing our valuation of KSH's construction segment - currently pegged at 4 times FY13E earnings versus 5-7 times seen at peers. We also see upcoming launches at key property projects (Hong Leong Gardens, Seletar Gardens and King Albert Park) to be potential catalysts ahead. We will speak further with management later today and, in the meantime, reiterate BUY while our fair value of S$0.62 is under review. (Eli Lee) TEE International: Joint bid for Myanmar airport project TEE International, Yongnam Holdings and Samwoh Corp have joined forces to participate in a consortium with JGC Corp and a unit of Changi Airport International to tender for the construction and operation of Myanmar's new international airport. TEE and Samwoh will each take a 25% stake in a special purpose vehicle (SPV) that will in turn supply up to 60% of the project consortium's equity. Yongnam will own 50% of the SPV and represent it in all negotiations involving the project. We are neutral on the announcement, pending further updates, and we maintain our fair value estimate of S$0.30 and HOLD rating for TEE. (Conrad Tan)

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

NEWS HEADLINES - The Dow and S&P 500 reached record closing highs, as health insurers gained on Medicare-reimbursement news and US factory orders climbed in Feb. - WE Holdings proposes a rights cum warrants issue, which could raise S$10.10m under maximum subscription, to strengthen its balance sheet and fund expansion into resources businesses in Myanmar. - Kreuz Holdings has secured a subsea installation contract worth ~US$25.0m from a third-party client. Estimated completion is by the fourth quarter of this year. - Boustead Singapore has divested its entire shareholding in OM Holdings Limited, an ASX-listed manganese mining company, for a total sales consideration of AU$18.5m. - Radiance Investment Pte. Ltd has agreed to subscribe for an aggregate of 51m new ordinary shares in the capital of Pacific Healthcare Holdings Ltd at the price of S$0.0828 per share. - ISDN Holdings has entered into a non-legally binding MOU with Tun Thwin Mining Co., Ltd to explore joint partnerships in energy opportunities in Myanmar.

SG: MARKET PULSE: Cache, TEE, Midas (20 Mar 2013)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.33

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.595

MARKET PULSE: Cache, TEE, Midas

20 Mar 2013

KEY IDEA Cache Logistics Trust: Raising equity to fund acquisition Cache Logistics Trust (CACHE) has exercised the call option to acquire the newly completed ramp-up logistics warehouse known as Precise Two. In a separate announcement, CACHE also launched a private placement to raise gross proceeds of S$86.8m, of which ~66.0% of the gross proceeds is expected to be used to wholly fund the proposed acquisition of Precise Two. We have earlier anticipated CACHE to fund the acquisition fully by debt, since it has recently received its maiden credit rating from Moody's (which allows it to exceed its previous debt ceiling of 35%). With this new development, we now adjust our estimates to factor in the placement and enlarged unit base. We also forecast a reduction in leverage as we believe CACHE may pare down its debts using the remaining proceeds to cushion a near-term dilution in DPU. Our fair value is revised to S$1.33 from S$1.34 previously. Maintain BUY. (Kevin Tan) MORE REPORTS TEE International: Potential new real estate projects TEE International recently announced the establishment of two wholly owned indirect subsidiaries, TEE Industrial Pte Ltd (yesterday) and TEE Hospitality Pte Ltd (12 Mar), under its real estate unit, TEE Land Private Limited. The principal activity of both subsidiaries will be in real estate development. Though no other details were given, the choice of names suggests that the group is preparing to expand its property business further, into the industrial and hospitality services segments. Meanwhile, TEE's plans to spin off its real estate business appear to be on track for a listing on SGX by May and we expect more updates in the weeks ahead. Its share price should remain supported in the near term by expectations of a special dividend if the plan succeeds, but we remain cautious on TEE until we see stronger contributions from its real estate business. We maintain our fair value estimate of S$0.30 and HOLDrating for TEE. (Conrad Tan) Midas Holdings: Wins first international contract of the year Midas Holdings (Midas) announced last evening that it has secured a EUR22.7m (~CNY182.8m) contract from Ural Locomotives LLC, a joint-venture company between Siemens AG and Russia's Sinara Group. We note that Midas' relationship with Siemens stretches a long way back, as it was appointed as a preferred global long-term supplier of aluminium alloy products for Siemens in Oct 2005.This is Midas' first international contract of 2013 and also helps to boost its total order wins YTD to ~CNY292.4m, following the five metro contract wins announced on 12 Mar. This latest contract entails the supply of aluminium alloy extrusion profiles for use in the manufacture of 100 electric train sets (or 500 electric train cars) for commuter passenger service in the Russian railway sector. Delivery is expected to take place progressively from 2013 to 2019. We had previously highlighted that management would be deepening its efforts to secure international railway contracts as a means of buffering the current standstill from the high-speed railway side in China. Maintain BUY and S$0.595 fair value estimate on Midas. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stock indexes finished mixed on Tuesday, with the S&P 500 extending its longest losing streak since late December. The S&P fell 0.2% while the Nasdaq eased 0.3%. - Rickmers Maritime plans to raise S$98.5m in a non-underwritten renounceable rights issue and use the proceeds to repay bank loans. - Noble Group says it sees an unprecedented amount of opportunities and is confident of another bull market for commodities in a few years. - China New Town drew mixed reactions after a unit of China Development Bank said it might buy 40% of the company. Its shares were up 7% in Singapore but down 11% in Hong Kong.

MARKET PULSE: Noble Group, TEE International (7 March 2013)

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.19

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

MARKET PULSE: Noble Group, TEE International

7 Mar 2013

KEY IDEA Noble Group: Focus on asset recycling, cost savings We recently attended Noble Group's (Noble) post-results analyst briefing and one of the key takeaways was management's focus on maintaining an "asset light" strategy with opportunistic capital recycling. Another key takeaway was the focus on cost savings, including interest savings. While it is good that Noble has taken steps to improve its operations, we note that the macro picture continues to be quite challenging in the medium term, especially for its Agricultural business. As such, we maintain our HOLD rating on the stock with an unchanged S$1.19 fair value. (Carey Wong) MORE REPORTS TEE International: Property spin-off looks on track TEE International announced recently (22 Feb) that it would inject S$16m worth of its property assets into wholly owned subsidiary TEE Land, as part of its plans to spin off its real estate business and list it separately on SGX by May. Certain pre-IPO investors have also agreed to invest S$4m in TEE Land when the restructuring is complete. Although TEE's share price has declined in recent days, we expect its share price to remain supported in the near term by expectations of a special dividend if its plan succeeds. Still, we prefer to remain cautious on TEE until we see stronger contributions from its real estate business, after its weak 2QFY13 results. We maintain our fair value estimate of S$0.30 and HOLD rating for TEE. (Conrad Tan)

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

NEWS HEADLINES - US stocks finished mostly higher on Wednesday, with the Dow Jones notching another record high with a 0.3% rise after an encouraging report on private-payrolls growth. - Three companies - Yong Xin International Holdings, Matex International and China Oilfield Tech - have been added to the SGX watch-list. - S-REITs delivered the region's highest dividend yield as at the end of last month, according to the latest month-end Asia Index Report produced by the FTSE Group. - Global Logistic Properties Limited said it had signed 15,000 sqm of new leases at its first development in Changzhou, China. - Global Strategic Holdings announced plans to raise S$246.8m in a rights issue, just two weeks after it said the Lippo group and a PE fund have invested S$37.5m in it. - The Singapore government's latest moves to ensure Singaporeans get a fair chance at higher-skilled jobs continued to win MPs' approval on the Budget debate in Parliament. - The Monetary Authority of Singapore has announced that it will, for the first time, review the financial products industry. - Non-executive directors (NED) in Singapore companies saw a moderate increase of 5.3% in their annual average fees per NED to S$52k in FY11/12.

MARKET PULSE: Residential Sector, Infrastructure Plays, STE, Transport Sector (18 Feb 2013)

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.04

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 4.53

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

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

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

Stock Name: ST Engg
Company Name: SINGAPORE TECH ENGINEERING LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.12

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.95

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.71

MARKET PULSE: Residential Sector, Infrastructure Plays, STE, Transport Sector

18 Feb 2013

KEY IDEA Singapore Residential Property: Healthy Jan sales but expect weakness ahead Summary: URA reported that a headline total of 2,269 new private homes (including 256 EC units) were sold in Jan 2013, which was up 2% MoM and 9% YoY. Excluding EC and landed-units, 2,003 units were sold in the month - up 47% MoM and 7% YoY with a sustained above-par take-up rate at 111% (versus 144% in Dec 2012). Looking ahead, we expect Feb 2013 sales figure to fall MoM due to the traditionally quiet Chinese New Year season and a limited number of new launches. Immediate data-points ahead are the launches at Trilinq (IOI Group) near the Clementi MRT Station and Urban Vista (Fragrance Group) near the Tanah Merah MRT station. We have a NEUTRAL rating on the residential property sector and prefer diversified developers with strong balance sheets and significant exposure to the Chinese property sector. Our top picks are CapitaLand [BUY, S$4.04], Keppel Land [BUY, S$4.53] and CapitaMalls Asia [BUY, S$2.55]. (Eli Lee) MORE REPORTS Population White Paper favours Infrastructure Plays Summary: After five days of intense debate, Singapore's Parliament passed the amended White Paper on Population about a week ago. We reviewed the White Paper and emphasize the following: - (i) the government will now build infrastructure ahead of demand, (ii) planning parameters of 5.8m to 6.0 million in 2020 (and 6.5 to 6.9 million in 2030) are to be used, (iii) the housing supply will be ramped up and HDB prices will remain affordable, (iv) rail network will double by 2030 with the addition of five more lines. In our view, the most direct beneficiary is the infrastructure sector (public works providers opposed to construction-developers). We highlight several niche players such as Tat Hong Holdings (BUY; FV: S$1.75), Yongnam Holdings Limited (UNRATED), TEE International (HOLD; FV: S$0.30) and TTJ Holdings (UNRATED). (Chia Jiunyang) ST Engineering: FY12 in line Summary: Singapore Technologies Engineering (STE) reported FY12 results that were in line with ours and consensus expectations. For FY12, revenue rose 6% YoY to S$6.4b, profit before tax climbed 10% YoY to S$723mm and profit attributable to shareholders rose 9% to S$576m. All sectors recorded higher PBT for FY12 versus FY11. Aerospace, Electronics, Land Systems and Marine saw PBT increase by 9%, 11%, 6% and 5% YoY respectively. Aerospace's FY12 PBT margin of 15.0% improved over FY11's 14.4%. STE expects to achieve higher revenue and PBT in FY13 versus FY12. We forecast a FY13F EPS of 19.9 S cents, and keeping a P/E peg of 20.7x, we raise our fair value from S$3.90 to S$4.12 and maintain a HOLD on STE. We estimate a FY13F dividend yield of 4.5%. (Sarah Ong) Singapore Transport: Fare review report delayed till end-May Summary: We are unperturbed by the Transport Minister's decision to delay the submission of the Fare Review Mechanism Committee's report to end-May because i) our projections already factor in price increases from mid-2QCY13, and ii) broad-based fare increases will still materialise. Although the reason for the delay is to facilitate further study of the impact of fare increases on low-income families and/or dependent groups (e.g. polytechnic students), wording in recent speeches and reiterations by the Transport Minister have been clear that commuters should be prepared to bear some of the cost increases especially after the fact that current fares have been kept affordable over recent years at the expense of public transport operators. Therefore, we leave our forecasts for both public transport operators - ComfortDelGro and SMRT - unchanged and maintain HOLD for both counters at S$1.95 and S$1.71 respectively. (Lim Siyi)

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

NEWS HEADLINES - Japan's Prime Minister Shinzo Abe is expected to announce his candidate for Bank of Japan's new governor for this week - a move with international and financial implications. - According to the median estimate of economists by Reuters, Singapore's GDP likely grew by 1.2% in 4Q2012, faster than the advance estimate of 1.1%, helped by higher production of oil rigs and pharmaceuticals. - Singapore retail sales fell 1.5% YoY in Dec last year, dragged down by weaker sales of motor vehicles. - The new head of Real Estate Developers' Association of Singapore (Redas) says, developers here are "naturally anxious" about the latest cooling measures, but they understand the government's push for a soft landing of property market and support the population roadmap. - Mapletree Greater China Commercial Trust will be launching an IPO for up to US$1.3b, the largest ever for a real estate investment trust in Singapore. According to its prospectus, the trust is offering about 1.73 million units in a range of S$0.88-0.93 each.

MARKET PULSE: Cache Logistics, TEE, SingTel (14 Feb 2013)

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.34

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.30

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.53

MARKET PULSE: Cache Logistics, TEE, SingTel

14 Feb 2013

KEY IDEA Cache Logistics Trust: New ramp-up warehouse addition Cache Logistics Trust (CACHE) has signed an option agreement to acquire a three-storey fully ramp-up warehouse for S$55.2m, or S$194 psf GFA. The transaction is expected to complete in Apr, subject to JTC approval. According to management, the initial NPI yield is ~8.7%, higher than CACHE's FY12 implied portfolio yield of 7.1%. Hence, we expect the acquisition to be earnings accretive. CACHE also announced that it has received its maiden corporate family rating from Moody's Investors Service. With this development, we believe CACHE may finance the acquisition wholly by debt, since it is now able to exceed its previous regulatory debt ceiling of 35%. We raise our fair value to S$1.34 from S$1.32 after factoring in the investment. Maintain BUY. (Kevin Tan) MORE REPORTS TEE International: Better outlook, but still cautious Since our last report on TEE International (10 Jan), its share price has stayed firm, retaining most of the gains made since the start of the year, despite its disappointing 2QFY13 results. We believe that TEE's share price has been supported by recent strong interest in Singapore construction stocks generally, boosted by the government's latest projections for construction demand and population growth, both of which should benefit the construction sector. We raise our valuation of TEE's main engineering business to 5.5x FY13 forecast earnings from 5x previously, to reflect the improved long-term outlook for its engineering segment. This raises our overall fair value estimate for TEE to S$0.30, from S$0.28. Given its weak 2QFY13 showing, however, we prefer to remain cautious on TEE until we see stronger contributions from its real estate business. We maintain our HOLD rating on TEE. (Conrad Tan) SingTel: Stable 3QFY13 results SingTel reported its 3QFY13 results this morning, with group revenue dipping 4.8% YoY to S$4597m, and while EBITDA rose 0.5% to S$1262m, net profit fell 8.3% to S$827m (mainly due to exceptional loss of S$67m). However, excluding exceptional items, underlying net profit was down 2.3% at S$874m. 9MFY13 revenue fell 2.4% to S$13702m, meeting 73% of our FY13 forecast, while net profit slipped 2.2% to S$2640m; core earnings was down 1.6% at S$2610m, or 69% of full-year estimate. SingTel has kept its guidance for FY13, and we will have more after the analyst teleconference. For now, we maintain our BUY rating but our S$3.53 fair value is under review. (Carey Wong)

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

NEWS HEADLINES - Most US stocks closed fractionally higher on Wed, while blue chips declined, as positive market momentum mixed with investor anticipation of an overdue correction. The Dow fell 0.3%. - Boustead Singapore posted a net profit of S$26.2m for 3QFY13, up from S$5.5m in 3QFY12. - Memtech International Ltd warned that it is likely to report a financial loss for FY12, due to significantly lower demand for mobile phone keypads and impairment charge on fixed assets. - Perennial China Retail Trust's 4Q12 amount available for distribution to unitholders of S$11.2m was in line with the forecast disclosed in its prospectus. - SMRT said that a tunnel fire that caused a 2.5-hour disruption to services on the North-South MRT line yesterday was caused by a short-circuit in a power cable. - Marina Bay Sands has been fined S$475k by the Casino Regulatory Authority of Singapore for surveillance breaches. - A study by the Washington-based Institute of International Finance said that capital flows into emerging market economies are set for recovery.

MARKET PULSE: KSH, Suntec, SGX, CCT, FCT, TEE (23 Jan 2013)

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.94

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 6.80

Stock Name: CapitaComm
Company Name: CAPITACOMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: FrasersCT
Company Name: FRASERS CENTREPOINT TRUST

Research House: OCBC

Price Call: BUY

Target Price: 2.13

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.28

MARKET PULSE: KSH, Suntec, SGX, CCT, FCT, TEE

23 Jan 2013

KEY IDEA KSH Holdings: Secures Q Bay contract; order book up 45% KSH reported that it has received the LOA for the main contract works for Q Bay Residences. This contract win - worth a hefty S$142.3m - is one of the largest awarded to KSH in recent years, and would boost its construction order book by ~45% to more than S$460m. Construction for the project would commence in Apr 2013 for a total length of 33 months and, with an anticipated net profit margin above 10%, would contribute more than S$14m of net profits, adding significant incremental visibility to construction earnings ahead. With a good track record of execution from management and a solid earnings growth profile (YoY earnings growth forecasted at 68% in FY13 and 73% in FY14), KSH remains one of our top value picks in the small-cap universe. Potential catalysts ahead include new contract wins and the anticipated launch of Hong Leong Gardens in 1H13. Maintain BUY with an unchanged fair value estimate of S$0.50. (Eli Lee) MORE REPORTS Suntec REIT: Positioning well for growth Suntec REIT posted an encouraging set of 4Q12 results last evening. Despite registering a 41.3% YoY decline in NPI to S$30.6m, DPU for the quarter came in at 2.326 S cents, down only 6.2%. Office segment continued to perform during the quarter, raking up 11.1% growth in revenue amid positive rental reversions and consistently high occupancy of 99.7%. This helped to cushion the softness at its retail segment, which experienced a 27.6% decline in revenue. Suntec City Phase 1 AEI is on track for completion by 2Q13 and 83% of its NLA had been pre-committed (71.2% in 3Q), Phase 2 AEI will commence on Mar and 37% pre-commitment had already been secured. Based on the timeline, we believe that 2Q may face the largest impact on its rental income, thereby prompting the REIT to utilise the Chijmes sales proceeds to mitigate the fall in DPU. We now tweak our model assumptions to factor in the better-than-expected results and a possible S$10m distribution from the divestment proceeds in FY13. Our fair value in turn is raised from S$1.70 to S$1.94. Maintain BUY.(Kevin Tan) Singapore Exchange: Limited price drivers ahead Singapore Exchange (SGX) posted 2QFY13 net earnings of S$76.3m, up 16.7% YoY, supported by better securities and derivatives income. For the Securities business, daily average traded value rose 8% YoY to S$1.2b. For the Derivatives business, daily average volume hit a record of 358,532 contracts, up 30% YoY. Its clearing house, the Singapore Exchange Derivatives Clearing (SGX-DC), has become a qualifying Central Counterparties (CCP) since 14 Jan 2013. The positive momentum in early 3QFY13 means that 2HFY13 is likely to be better than 1HFY13, and we raised our full year net earnings to S$317m. SGX's share price has done well since our last report, up 10%, but we see limited upside from current level. As such, we advocate locking in some profits and re-entering at lower price levels. Maintain HOLD with fair value estimate of S$6.80. (Carmen Lee) CapitaCommercial Trust: FY12 results within expectations CapitaCommercial Trust (CCT) reported 4Q12 distributable income of S$58.3m - 7.0% higher YoY. This cumulates to a FY12 distributable income of S$228.5m, up 7.4% YoY, which is within expectations and make up 101% of our forecast. (FY12 DPU is 8.04 S-cents; 4.7% distribution yield based on last closing price.) The growth in distributable income was mainly due to higher contributions from HSBC Building and the 20 Anson acquisition, partially off-set by negative reversions at 6 Battery Rd and the redevelopment of the Market St Car Park. Portfolio occupancy remained stable at 97.2% as of end 4Q12, versus 97.1% in the previous quarter. Average rentals of remaining leases expiring in 2013 are at S$7.48 - significantly lower than current Grade A levels of S$9.58 - and we expect continued positive rental reversions over FY13. We would speak further with management regarding these results and, in the meantime, put our Buy rating and fair value estimate of S$1.75 UNDER REVIEW. (Eli Lee) Frasers Centrepoint Trust: Continued growth in 1QFY13 Frasers Centrepoint Trust (FCT) delivered 1QFY13 NPI of S$27.1m and distributable income of S$21.8m, up 9.1% and 10.8% YoY respectively. The strong performance was driven mainly by Causeway Point (+9.1% YoY) and Northpoint (+5.2%). DPU for the quarter came in at 2.40 S cents, representing a YoY growth of 9.1%. This meets 22% of both our and consensus FY13F DPU estimates. Operationally, we note that a total of 62,341 sqft of NLA (7.1% of total portfolio NLA) was renewed at an average rental reversion of 5.2% in 1Q. In addition, portfolio occupancy improved from 93.6% in prior quarter to 97.2%, boosted by a 8.7ppt QoQ improvement in occupancy at Causeway Point to 96.4%. Management expects occupancy at the mall to trend up further when more tenants commence their operations from Jan onwards. We will be tuning into the results teleconference this morning. For now, we maintain our BUY rating but place our S$2.13 fair value under review. (Kevin Tan) TEE International: Thai associate buys industrial land for THB46.5m TEE International's 49%-owned Thai associate, Chewathai Ltd, has acquired a 450,922 sq ft piece of freehold industrial land in Thailand's Rayong Province for THB46.5m (S$1.9m). TEE intends to build factories on the property for leasing purposes, at an estimated cost of THB200m, and construction is expected to be completed in Sep 2013. The acquisition of the land will be financed by internal funds and bank borrowings and is not expected to have any material impact on the company's earnings or assets for FY13 (ending 31 May). We maintain our HOLD rating on TEE and fair value estimate of S$0.28. (Conrad Tan)

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

NEWS HEADLINES - US stocks rose on Tue as investors cheered positive earnings reports from Travelers and other companies. The Dow rose 0.5% to 13,712.21, the S&P 500 index gained 0.4% to 1,492.56 and the Nasdaq ended 0.3% higher at 3,143.18. - Foreigners' share of private home purchases in Singapore is expected to decline further in 1H13, from 6.3% last year, given the higher additional buyer stamp duty rates imposed on them under the recent property cooling measures, property consultants say. - Mapletree Industrial Trust's 3Q13 distributable income rose 6.9% YoY to S$37.7m, supported by a 7.7% increase in net property income to S$49.1m. Its distribution per unit rose 7.4% to 2.32 S cents.

MARKET PULSE: United Envirotech, Tee Int'l (10 Jan 2013)

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.67

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.28

MARKET PULSE: United Envirotech, Tee Int'l

10 Jan 2013

KEY IDEA United Envirotech: Outlook still positive after placement Summary: United Envirotech (UEL) intends to place out 98.5m new shares, or 20.6% of the existing share capital, to KKR China Water Investment Holdings at S$0.50 each for a cash consideration of S$49.3m. UEL intends to use 90% of the net proceeds for the acquisition or construction of water treatment plants and the rest for general working capital. Separately, UEL intends to purchase a 13.2% stake in Memstar Technology Ltd (MTL) for a total consideration of S$35m, via cash offer of S$26m and 18m new UEL shares. The issue of new shares to both KKR and MTL will result in some dilution for existing shareholders, but we believe that the outlook for UEL remains upbeat, as China will continue to focus on environmental issues. Maintain BUY with S$0.67 fair value. (Carey Wong) MORE REPORTS TEE International: Earnings miss on weaker associates Summary: TEE International's 2QFY13 results were below our expectations, with net profit falling 32.9% YoY to S$2.5m (taking 1HFY13 net profit to S$5.3m, just 24% of our full year forecast), due mainly to a sharp drop in associates' contributions and higher tax expenses. We believe that the recent run-up in TEE's share price is related to its plan to spin off its real estate business and the prospect of a special dividend if it succeeds. Given the weak 2QFY13 showing, however, we lower our FY13-14 earnings forecasts and cut our fair value estimate to S$0.28 from S$0.34. We have not factored in any potential gains from the spin-off and we prefer to remain cautious on the stock until its real estate business shows better contributions or the outlook for its engineering segment improves. We maintain our HOLD rating on TEE. (Conrad Tan)

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

NEWS HEADLINES - US stocks climbed modestly on Wed after a two-day drop as Alcoa Inc kicked off the quarterly earnings season with better-than-expected sales and an improved outlook of higher demand for aluminum. The Dow rose 0.5% to 13,390.51, the S&P 500 index gained 0.3% to 1,461.02 and the Nasdaq ended 0.5% higher at 3,105.81. - Fabrictech Holdings expects a significant drop in revenue and a loss for 4Q12 due to continuing sluggish demand for high-grade textile products, a shift in production facilities and losses on the disposal of old equipment. - Property developer Hong Fok Corp said it may raise its stake in a company it did not name, after the Singapore Exchange queried trading activity for its shares on Mon. - IEV Holdings expects to receive a cash dividend of about US$0.3m from its associated company, CNG Vietnam Joint Stock Company. - Small and medium-sized enterprises in Singapore have subdued growth expectations for turnover and profit, and fewer expect to increase headcount in 1H13, according to a quarterly survey by the Singapore Business Federation and DP Information Group.

MARKET PULSE: Oil&Gas, Midas, United Envirotech, Tee Int'l (9 Jan 2013)

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.05

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.49

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.84

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.60

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.67

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.34

MARKET PULSE: Oil&Gas, Midas, United Envirotech, Tee Int'l

9 Jan 2013

KEY IDEA Oil and Gas sector: Strong start, but be selective Summary: Since our Oil and Gas strategy report ("Always a vital resource", 3 Dec 2012) highlighted our belief that the O&G sector would see good investor interest in early 2013, the FTSE Oil and Gas index has appreciated by 5.9% vs the STI's 4.6% gain over the same period. Stocks in this sector, generally have higher betas, saw a strong start to the year with renewed optimism in the broader market. Under our sector coverage comprising 15 O&G stocks, Ezion has delivered the best performance since then with a 26% price appreciation. Investor interest recently has centred on the small-mid cap space, of which our preferred picks are Ezion Holdings [BUY, FV: S$2.05] and Nam Cheong Ltd [BUY, FV: S$0.30]. We also like the rigbuilders for their clear earnings visibility and favourable industry outlook: Keppel Corp [BUY, FV: S$12.49], Sembcorp Marine [BUY: FV: S$5.84]. Maintain OVERWEIGHT. (Low Pei Han, Chia Jiunyang) MORE REPORTS Midas Holdings: Proxy play to China's infrastructure-led growth Summary: We view Midas Holdings (Midas) as a proxy play to the economic recovery story of China in 2013, which would be driven in part by rising urbanisation and railway investments. The latter could amount to CNY600-650b, according to media reports. We believe that China's Ministry of Railways could resume high-speed passenger train car contract tenders in 1Q13. We expect this to translate into order wins for Midas from its customers in 1H13, with deliveries possibly happening from 2H13. Despite Midas' recent share price surge, we believe that more upside potential exists. This is premised on the improved optimism of the industry recovery prospects, which has led to a sector re-rating. Coupled with a more "risk-on" approach adopted by the market, we raise our fair value estimate on Midas from S$0.50 to S$0.60 as we ascribe a higher FY13F P/B peg of 1.2x (previously 1x). Maintain BUY. (Wong Teck Ching Andy) United Envirotech: Placement to KKR Summary: United Envirotech (UEL) intends to place out 98.5m new shares, or 11.04% of the enlarged issued share capital of the company, to KKR China Water Investment Holdings at S$0.50 each for a cash consideration of S$49.3m. The issue price represents a discount of 2.7% to the average weighted price of S$0.514 traded on 7 Jan; it is a premium of 8.5% to the average closing price for the 30 trading days prior to 8 Jan. Upon completion of the deal, KKR will have a direct interest of 45.2% on a fully diluted basis (assuming full conversion of US$113.8m of convertible bonds). UEL intends to use 90% of the net proceeds for the acquisition or construction of water treatment plants and the rest for general working capital. Separately, UEL intends to purchase a 13.2% stake in Memstar Technology Ltd (MTL) for a total consideration of S$35m from two major shareholders, which UEL intends to fund using internal funds or bank borrowings (and the issue of new shares). UEL believes the move will strengthen the strategic relationship between them, given that MTL is the key supplier of the company's membranes, and also leverage on MTL's membrane technology. We will be speaking with management to get more insights. For now, we have a BUY on UEL with S$0.67 fair value. (Carey Wong) TEE International: Disappointing 2Q FY2013 results Summary: TEE International's 2Q FY2013 results were below our expectations, with net profit falling 32.9% YoY to S$2.5m (taking 1H FY2013 net profit to S$5.3m, just 24% of our full year forecast), due mainly to a sharp drop in associates' contributions. Revenue rose 13.5% to S$44.0m, in line with our revenue forecast for the full year. TEE declared an interim cash dividend of 0.65 S cent/share, higher than the 0.6 S cent dividend it paid a year ago. Despite the disappointing results, its main engineering segment orderbook remains strong at S$183.0m, while its real estate segment has contracted sales of S$51.9m for ongoing residential development projects in Singapore. We will be speaking to TEE executives later today to discuss the company's latest results and outlook. Until then, we place our Hold rating and fair value estimate of S$0.34 under review. (Conrad Tan)

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

NEWS HEADLINES - US stocks fell for a second day on Tue as investors braced for the start of the quarterly earnings season following last week's rally after a deal was reached to avoid the fiscal cliff. The Dow slid 0.4% to 13,328.85, the S&P 500 index fell 0.3% to 1,457.15 and the Nasdaq ended 0.2% lower at 3,091.81. - Singapore property developers may face additional development charges if private roof terraces and enclosed spaces are included in the gross floor area of a property under new URA guidelines, real estate consultants say. - Construction firm Logistics Holdings aims to raise some S$6m in an IPO for a Catalist listing, with a placement of 42m shares at 23 S cents each. - Singapore Shipping Corp is buying MYP Ltd's businesses in agency and terminal operations, and strategic projects and logistics, for S$15m. - Asia Power Corp has agreed to pay S$25m to acquire a 12.5% stake in a Chinese property developer based in Hainan.

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.

MARKET PULSE: FCOT, Vix Branz, United Envirotech, Tee International

Stock Name: Frasers Comm
Company Name: FRASERS COMMERCIAL TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.31

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.74

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.28

MARKET PULSE: FCOT, Vix Branz, United Envirotech

9 Oct 2012

KEY IDEA Frasers Commercial Trust: Strong value proposition Frasers Commercial Trust (FCOT) announced on 28 Sep that it had completed the sale of KeyPoint for S$360.0m. We are maintaining our view that FCOT will likely use the bulk of the sale proceeds to redeem half of its Series A Convertible Perpetual Preferred Units (CPPUs) and reduce its existing debt liabilities, as the funding costs of the CPPUs and its gearing ratio are relatively high. Going forward, we are staying positive on FCOT's financial performance. Apart from a positive impact from the likely redemption of the CPPUs, FCOT is also expected to gain from interest savings as a result of the early refinancing of its S$500m term loan facility at favourable borrowing margins. In addition, the acquisition of the balance 50% interest in Caroline Chisholm Centre and direct tenant leases at China Square Central earlier this year are likely to contribute positively to its rental income. Hence, we expect FCOT to meet our FY12-13 forecasts comfortably. We are holding our FY12-13 forecasts intact as the recent developments are in line with our expectations. However, as we roll our valuations to FY13, our fair value is now raised from S$1.23 to S$1.31. Maintain BUY. (Kevin Tan) MORE REPORTS Viz Branz Limited: New substantial shareholder Lam Soon Cannery Private Limited - more commonly known for its "Knife" brand cooking oil -has purchased a 20% stake in Viz Branz (VB) at a price of S$0.735/share. While this share purchase falls short of triggering a general offer, we view this development as a positive and an important first step for an eventual overall takeover. First, VB's instant beverage business complements Lam Soon's existing operational capabilities and is a natural fit in its wide range of products. Secondly, and more importantly, given the fractured relationship between VB's two substantial shareholders, a reduced stake for its current CEO clearly signifies his intent to leave the business eventually. Although future share sales are likely to be transacted at S$0.735/share, it is only 0.7% lower than our fair value estimate of S$0.74/share. Maintain HOLD. (Lim Siyi) United Envirotech: Gets another Shandong project United Envirotech Limited (UEL)has recently announced that its 70%-owned subsidiary has signed a deal to acquire, upgrade and expand an existing industrial waste-water treatment plant in Weifang City, Shandong Province, China; this making it the company's fourth such acquisition in Shandong. We maintain our BUY rating on the stock as we believe that UEL is well placed to capture more of China's growing waste-water treatment market. Although we are maintaining our estimates and S$0.50 fair value for now, we see room for upward revisions on more contract wins. (Carey Wong)

Tee International: Acquires RM31.2m site in Cyberjaya, Malaysia Tee International (TEE) announced yesterday that it has paid MYR31.2m (S$12.9m) to acquire a freehold commercial site in the Cyberjaya, Selangor Darul Ehsan, Malaysia. The site area is ~9.5 acres and has a plot ratio of 3.0, and the acquisition would be financed by internal funds and bank borrowings. TEE expects to develop the site into a mixed use project comprising of retail and SOFO (Small Office Flexible Office) units. The site is located in the heart of Cyberjaya - 26km away from Kuala Lumpur and a key part of the Multimedia Super Corridor in Malaysia - and is in close proximity to MNC offices and institutions such as Shell, IBM and Multimedia University (MMU). This transaction is expected to have no material impact on the FY13 (ending 31 May 2013) financials. We would speak with management further regarding this acquisition and put our Hold rating and fair value estimate of S$0.28 UNDER REVIEW. (Research Team) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks pulled back from near five-year highs in anticipation that the earnings season will be weak. The Dow fell 0.2% to 13,583.65. The S&P 500 Index retreated 0.4% to 1,455.88. - Fraser and Neave has announced that the revaluation of certain properties has revealed an aggregate revaluation surplus of ~S$498m. - Ossia International Limited has agreed to acquire the retail and distribution business of VGO Corporation Limited for a consideration of S$18.7m. - JES International Holdings, a PRC-based shipbuilding group, has expanded into the offshore space, securing a shipbuilding contract for a Platform Support Vessel. - FDS Networks Group has entered into a disposal agreement to dispose of the entire share capital of a wholly-owned subsidiary of the company for a consideration of US$550k.

MARKET PULSE: SIAE, Tee, CRCT, StarHill, First REIT (25 Jul 2012)

Stock Name: SIA Engg
Company Name: SIA ENGINEERING CO LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.04

Stock Name: Tee Intl
Company Name: TEE INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.28

Stock Name: CapitaRChina
Company Name: CAPITARETAIL CHINA TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.44

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.96

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.70

MARKET PULSE: SIAE, Tee, CRCT, StarHill, First REIT

25 Jul 2012

KEY IDEA SIA Engineering: Business as usual Summary: SIA Engineering Co Ltd's (SIAEC) 1QFY13 financial results were mostly in line with our expectations. Revenue increased 8.2% YoY to S$300.5m and PATMI grew 2.9% to S$70.1m. Revenue growth was primarily driven by its fleet management and line maintenance segments. However, SIAEC's saw a 1.1ppt slide in its operating margin to 11.4%, causing its operating profit to contract by 0.9% to S$34.4m. Positively, SIAEC's share of profits of JV and associated companies climbed 7.5% to S$40m, ensuring that it still recorded PATMI growth in the quarter. Going forward, management guided that demand for its services is expected to remain stable. We maintain our fair value estimate of S$4.04/share and HOLD rating on SIAEC. (Eric Teo) MORE REPORTS Tee International: Record quarter unlikely to repeat Summary: Tee International (TEE) yesterday released its FY12 financial results. Its FY12 PATMI grew 11% to S$19.3m, beating consensus estimate by 32%. This is in spite of the 43% slide in its revenue to S$143.6m. After recording 9MFY12 PATMI of only S$7.7m, TEE turned it up with a record quarterly PATMI of S$11.6m in 4QFY12. The record quarterly PATMI in 4QFY12 can be attributed to 1) an increase in operating margin, probably due to profit recognised from TEE's property development, and 2) asset valuation gains at the associate level. However, TEE's profit recognition from property development should remain lumpy, and the one-off asset valuation gains are unlikely to repeat. Thus, we maintain our fair value estimate of S$0.28/share and HOLD rating on TEE. (Eric Teo) CapitaRetail China Trust: 2Q12 results generally in line with expectations Summary: CapitaRetail China Trust (CRCT) announced this morning 2Q12 income available for distribution of S$16.65m, which was 23.5% higher YoY. 2Q12 DPU is 2.41 S-cents per share. The results were generally in line with expectations and YTD DPU of 4.82 S-cents now makes up 52% of our full-year forecast. 2Q12 revenue rose 18.2% YoY to RMB190.2m, with shopper traffic and tenant sales in its multi-tenanted malls increasing 26.4% and 13.1% respectively. Good rental reversions of 15.2% were achieved. CapitaMall Xizhimen in Beijing saw the highest rental reversion of 28.9% on the back of a 52.1% YoY increase in shopper traffic, following the opening of a basement connection to the subway. We will meet with management later today and, in the meantime, put our Buy rating with a fair value estimate of S$1.44 UNDER REVIEW.(Sarah Ong) First REIT: 2Q12 DPU of 1.93 S cents Summary: First REIT (FREIT) reported its 2Q12 results which were within our expectations. Gross revenue increased 6.1% YoY to S$14.0m, driven by contribution from its Sarang Hospital which was acquired in Aug 2011 and higher rental income from its remaining portfolio. Distributable amount to unitholders and DPU jumped 23.1% and 22.2%YoY to S$12.2m and 1.93 S cents, respectively. This was boosted by a special distribution of S$2.2m which arose from a gain from the sale of the Adam Road property. Sequentially, revenue and DPU were both flat. For 1H12, gross revenue rose 6.2% to S$28.0m and constituted 47.4% of our full-year projection. DPU increased 22.2% to 3.86 S cents. Excluding the special distribution highlighted earlier, DPU would have formed 50.1% of our FY12 forecast. Looking ahead, we believe that acquisitions could possibly take place in 2H12, given FREIT's low leverage ratio of 15.1% and ongoing negotiations with its sponsor Lippo Karawaci over the past few months. As FREIT's share price is currently trading close to our S$0.96 fair value estimate, we place our Buy rating under review, pending an analyst briefing. (Wong Teck Ching Andy) Starhill Global REIT: Consistent set of 2QFY12 results Summary: Starhill Global REIT (SGREIT) announced DPU of 1.08 S cents for 2QFY12 (+3.8% YoY), in line with our projections. Together with the distribution in 1Q, 1HFY12 DPU amounted to 2.15 S cents, meeting 49.6% of our FY12 DPU forecast (50.0% of consensus). Wisma Atria was the key driver for the quarterly performance, thanks to improved office occupancy and positive rental reversions following the asset redevelopment on its retail segment. Management updated that the asset enhancement initiative at Wisma Atria was substantially completed in the quarter and that the ROI of 12.8% based on annualized NPI has exceeded its initial target of 8%. As at 30 Jun, we note that SGREIT's portfolio occupancy rate stood at 99.5%, an improvement of 50bps from 99.0% seen in previous quarter. In addition, aggregate leverage remained healthy at 30.5% (30.4% in 1Q), with no debt refinancing until Jan 2013. We will be attending the analyst briefing later at noon to get more details on its outlook. For now, we place our Buy rating and S$0.70 fair value UNDER REVIEW. (Kevin Tan)

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

NEWS HEADLINES - US stocks dropped on Tuesday following a report that Greece needs to go through further debt restructuring. The Dow fell 0.8% to 12,617.32. The S&P 500 Index sank 0.9% to 1,338.31. - IHH Healthcare is debuting on Bursa Malaysia and SGX today. The IPO price is MYR2.80 and S$1.11 per share. - Mapletree Industrial Trust reported 1Q13 distributable income of S$36.9m, up 27.1% YoY. Net property income rose 26.4% YoY to S$48.3m. DPU climbed 14% to 2.26 S-cents. - Ascendas India Trust reported a 3% YoY increase in 1Q13 total property income to S$32m. Net property income moved up 1% to S$17.8m. DPU is 1.2 S-cents. - Asia-themed fund United International Securities registered a net loss of S$112k for 1H12 versus a net profit of S$6.9m in the period a year ago. This is chiefly due to the loss on sale of investments due to a poorer market outlook and lower interest income.