SG: MARKET PULSE: Consumer Sector, Cache Logistics Trust (17 Jun 2013)

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.82

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.40

MARKET PULSE: Consumer Sector, Cache Logistics Trust

17 Jun 2013

KEY IDEA Consumer sector - Sector under pressure Summary: We downgrade the consumer sector to UNDERWEIGHT in light of the weaker SG retail sales figures for Apr and the potential threats to regional consumer spending (i.e macro-overhang, government policy changes and greater foreign competition). With sales figures likely to showcase unimpressive results for May, 2QCY13 could well shape out to be a muted quarter in terms of top-line growth for consumer companies. Furthermore, operating cost pressures resulting from higher wage costs and advertising and promotional spending still remain so operating margins are likely to stay depressed. Within the sector, we favour counters with defensive qualities such as Sheng Siong [BUY; FV: S$0.82] or counters with potential M&A activity Viz Branz [BUY; FV: S$0.74]. (Lim Siyi) MORE REPORTS Cache Logistics Trust: Valuation looks undemanding Summary: We are reiterating our prognosis that Cache Logistics Trust (CACHE) is likely to continue to deliver sustainable growth for FY13. CACHE has a portfolio of quality assets which has a 100% occupancy rate and strong weighted average lease to expiry of 3.7 years. Together with the recent acquisition of Precise Two, CACHE is likely to meet our growth projection for 2013. Since 22 May, the S-REITs sector, including CACHE, has recently experienced a sell-down on fears that the US Federal Reserve may reduce the pace of its bond purchase programme and raise the interest rates in the coming months. However, we believe that the market reaction on CACHE is overdone, given its strong financial position and active capital management. At current price, CACHE offers a FY13-14F DPU yield of 6.8-7.1%, which represents an attractive spread of 471-500 bps to Singapore's 10-year bond yield. While we now revise our fair value to S$1.40 from S$1.45 on higher risk-free rate assumption, we still see good upside potential on CACHE. Maintain BUY. (Kevin Tan)

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

NEWS HEADLINES - Asian stock futures fell, signaling a possible extension of declines amongst Asian equities after the International Monetary Fund cut its US growth forecast and ahead of the Federal Reserve meeting this week. - Singapore may gain from its first-mover position for business trusts in the region, market watchers say, even if historical performance is mixed and amid a recent dip in sentiment for yield plays. - Singapore's monetary authority censured banks for trying to rig benchmark interest rates and orders the setting aside of as much as S$12b at zero interest pending steps to improve internal controls. - Far East Orchard has been awarded a tender for a residential land parcel with FCL Topaz Pte. Ltd., a member of Frasers Centrepoint and Sekisui House, Ltd. The total tender price for the land was S$256.9m. - First Ship Lease Trust demands the redelivery of its two crude oil tankers, after lessees default on their lease payments. - Freight Links Express expands the scope of its logistics business by entering the commodity logistics segment.

SG: MARKET PULSE: GAR, CityDev, Goodpack, Nam Cheong, Viz Branz (14 May 2013)

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 12.04

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.80

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.30

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

MARKET PULSE: GAR, CityDev, Goodpack, Nam Cheong, Viz Branz

14 May 2013

KEY IDEA Golden Agri-Resources: Upgrade to BUY on valuation ground Golden Agri-Resources (GAR) posted 1Q13 revenue of US$1430.1m, weighed down by lower CPO prices; but still managed to meet 22% of our full-year forecast. We estimate that core earnings came in at around US$113m, down 30% YoY but up 176% QoQ, and also met 23% of our FY13 forecast. Management noted that the better showing came from lower operating expenses, improved performance at its China operations and the sell-down of inventory, which came as a big relief. While CPO prices may still remain weak in the near term, headwinds appear to be dissipating; management is also remaining fairly upbeat about its prospects as it continues to expand its integrated operation capabilities to benefit from the firm industry outlook. Coupled with the recent fall in share price, GAR now looks relatively attractive with a 19% upside to our unchanged S$0.63 fair value (based on 12.5x FY13F EPS). Hence from a valuation standpoint, we upgrade our call from Hold to BUY. (Carey Wong) MORE REPORTS City Developments Limited: Still executing well 1Q13 PATMI came in at S$137.7m, down 12% YoY mostly due to the absence of a disposal gain from the Tagore Avenue warehouse sale in 1Q12, partially offset by gains from strata units sales in non-core industrial assets. First quarter PATMI now makes up 26% of our full year forecast, which we judge to be in line with expectations. In 1Q13, the group launched two projects, the 912-unit D'Nest and 868-unit Bartley Ridge, of which 87% and 62% of total units have been sold - a reasonably firm set of performances. The group's hotel subsidiary, M&C, reported a soft set of first quarter numbers, with 1Q13 PATMI down 29% YoY due to a room refurbishment program that removed over 100k room nights and more difficult sector conditions. Maintain HOLD on CDL with an unchanged fair value estimate of S$12.04 (15% RNAV disc.). (Eli Lee) Goodpack Limited: Catalyst delayed Goodpack's 3Q13 results met our expectations with revenue growing 3.0% YoY to US$44.8m on the back of continued gains from its synthetic rubber segment. Although operating expenses fell slightly and operating profit increased by 7.5% to US$16.3m, higher financing expenses caused PATMI for the quarter to fall 5.9% to US$10.9m. Entering 4Q13, we reduce our revenue projections following a delay in IBC usage for two new synthetic rubber contract wins back in 2Q13 but still expect a decent showing for its 4Q13 results. While we deem its recent share price decline to be overdone, our fair value falls to S$1.80 (S$1.95 previously) due to the lack of a near-term catalyst. Downgrade to HOLD. (Lim Siyi) Nam Cheong: 1Q net profit up 8% to RM35.8m Nam Cheong Limited's revenue and net profit increased by 14% and 8% YoY to RM234.7m and RM35.8m respectively. Gross margin declined to 18.6% from 22.6% in the year-ago period, mainly due to lower utilization of its vessel fleet. The group also had a disposal gain of RM2.8m, relating to one SSV. Separately, Nam Cheong announced the sale of five vessels worth US$110m, relating to one 5,150 bhp AHTS and four PSVs. The group, which already has an existing net order-book of RM1.3b, plans to expand its shipbuilding programme to 28 vessels for 2014 (2013: 19 vessels). We continue to like the group for its growth profile and keep our BUY rating and fair value estimate of S$0.30 unchanged. (Chia Jiun-Yang) Viz Branz Limited: Best operating margins since FY10 Viz Branz's 3Q13 results was in-line with expectations with a decline in revenue offset by continued margin improvements due to the favourable raw material cost environment. While we lowered our FY13 projections to account for the seasonally weaker 4Q13, we expect margin improvements to persist and VB should remain on track to record a better FY13 performance in terms of PATMI growth. In addition, its growth prospects in its key China market remain decent. We leave our fair value estimate unchanged at S$0.74 and keep our BUY rating on the counter. In terms of the likelihood of a GO, we remain steadfast in our assertion that it will materialize, albeit at a later date and with a potentially different acquirer. (Lim Siyi)

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

NEWS HEADLINES - Wing Tai's net profit more than doubled to S$94.6m for 3Q13, from S$42.3m a year earlier. - Super Group posted 1Q13 net profit of S$22.1m, up 25% YoY, helped by improved sales of food ingredients, cost management and a fx gain. - China Minzhong's 3QFY13 net profit rose 5.9% YoY to RMB255m (S$51m) on improved sales in its processed and cultivation business segments. - SBS Transit's 1Q13 net profit tumbled 41.6% to S$2.8m, weighed by losses in its bus division. - Yanlord Land Group's 1Q net profit halved from a year ago to CNY67.3m (S$13.4m), mainly due to FX translation losses.

MARKET PULSE: ASL, Goodpack, CMA, Viz Branz, Karin, PEC, Midas (7 Feb 2013)

Stock Name: ASL Marine
Company Name: ASL MARINE HOLDINGS LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: Goodpack
Company Name: GOODPACK LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.95

Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.55

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

Stock Name: Karin
Company Name: KARIN TECHNOLOGY HLDGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.295

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.60

MARKET PULSE: ASL, Goodpack, CMA, Viz Branz, Karin, PEC, Midas

7 Feb 2013

KEY IDEA ASL Marine: Can afford to be selective of new orders ASL Marine (ASL) reported a 7.3% YoY rise in revenue to S$83.0m and a 39.8% increase in net profit to S$10.6m in 2QFY13, such that results were in line with our expectations. Gross profit margin increased from 17.3% in 2QFY12 to 23.4% in 2QFY13 due to better margins in all three core business segments. Given ASL's busy yards and healthy order book (S$528m as at 31 Dec 2012), we understand that the group will aim to start securing orders only after Jun this year. Since our last report on 3 Dec 2012, the stock has done well, with its share price appreciating by 13.8% vs the STI's 6.7% gain over the same period. Despite this, we still see upside potential. We roll forward our valuation to blended FY13/14F earnings, still based on an unchanged PER of 10x. As such, our fair value estimate rises from S$0.82 to S$0.86. Maintain BUY. (Low Pei Han) MORE REPORTS Goodpack Limited: Promising prospects Goodpack's 2Q13 revenue increased by 6.4% YoY to US$46.4m following continued growth from its Synthetic Rubber (SR) segment. Operating profit rose by a corresponding 15.4% to US$16.2m - despite operating expenses rising by 7.1% YoY to US$31.8m - and PATMI gained 4.0% YoY to US$11.1m. We raise our FY13 and FY14 outlook on sustained improvements within the SR space as tyre demand holds up and new SR plants open in Singapore. Aided by two recent key contract wins, Goodpack stands in good stead to benefit once production from these SR plants ramp up in the middle of CY2013. As a result, we upgrade Goodpack to BUY and our fair value estimate increases to S$1.95 from S$1.85 previously. (Lim Siyi) CapitaMalls Asia: Good round-off to FY12 CapitaMalls Asia (CMA) reported 4Q12 PATMI of S$184.8m - decreasing 10% YoY mostly due to lower fair value gains from its properties in China and Singapore. This brings FY12 PATMI to S$546.0m, up 19.7%. Excluding revaluation gains and portfolio gains, FY12 PATMI adjusts to a core figure of S$175.7m, which we judge to be mostly in-line and only 3.2% below our FY12 forecast of S$181.5m. We continue to view CMA favorably and see its share price likely benefitting from dual tailwinds ahead: 1) increasing operational traction, as a larger component of CMA's portfolio becomes operational, and 2) relatively firm retail outlooks in China and Singapore. Maintain BUY with an unchanged fair value estimate of S$2.55. (Eli Lee) Viz Branz Limited: Continued margin improvement Ongoing competitive pressures in Myanmar caused Viz Branz (VB) to report a 5.6% YoY decline in 1H13 revenue to S$86.1m. However, favourable raw material costs and a reduction in administrative expenses saw operating profit and PATMI rise by 6.7% YoY to S$13.6m and 4.0% YoY to S$10.1m respectively. VB's management also declared an interim dividend of 1 S cents, which was similar to last year's interim payout. With the performance coming in within our expectations, our 2H13 forecasts remains unchanged, and we retain our fair value estimate of S$0.74. While the lack of progress on a GO will disappoint investors, we reiterate our view that a deal is likely to materialize. Maintain BUY. (Lim Siyi) Karin Technology: Leveraging on smartphones for growth Karin Technology's (Karin) 1HFY13 revenue surged 39.7% YoY to HK$2,123.3m, exceeding our expectations (54.4% of our FY13 forecast). However, estimated core PATMI of HK$26.8m (+5.1% YoY) was in line due to lower-than-expected gross margin, forming 50.1% of our full-year projection. Karin's strong revenue growth was driven largely by its Consumer Electronics Products and Components Distribution segments, which have significant exposure to the growing smartphone market. An interim dividend of 7.2 HK cents/share was declared. Our forecasted FY13F dividend yield stands at an attractive 7.7%. We retain our core PATMI projections, but raise our PE multiple peg from 6x to 7x in light of the improved market sentiment and Karin's stronger financial position. We also roll forward our valuations to blended FY13/14F EPS and our fair value estimate increases from S$0.25 to S$0.295, partially offset by a lower HKD-SGD assumption. Maintain HOLD.(Wong Teck Ching Andy) PEC Ltd: Ceasing coverage PEC Ltd reported another quarter of lackluster result with 2Q13 PATMI falling 15% YoY to S$2.6m despite revenue increasing by 11% to S$144m. Gross margin declined to 14% (2Q12: 20%) due to competitive pricing and cost pressures in both the project work and maintenance sectors. Other operating expenses also jumped 55% YoY to S$12.4m from cost increases associated with higher headcount (i.e. accommodation, transport expenses, etc). Besides the tight labour market, PEC's earnings growth is also limited by slower pace of petrochemical investments due to a change in EDB's energy policy. Meanwhile, we note that its share price has risen by almost 11% since our last report. We now see limited upside ahead and think that its earnings are likely to remain sluggish. Therefore, we CEASE COVERAGEon the stock due to the lack of medium-term price drivers and muted earnings outlook. (Chia Jiunyang) Midas Holdings: JV clinches CNY710m metro contract Midas Holdings (Midas) announced last evening that its 32.5%-owned JV company Nanjing SR Puzhen Rail Transport (NPRT) has clinched a metro contract worth CNY710m. This encompasses the supply of 24 train sets, or 104 train cars for the Ningtian Intercity Line Phase 1 project. Delivery is scheduled to take place only from 2014 to 2015, but this could lead to potential contract wins for Midas as it is a supplier of NPRT. We note that this is NPRT's second announced contract order of the year. Total contract wins amount to ~CNY1.05b for NPRT YTD. While NPRT has been a drag on Midas' earnings in FY12, we believe that its fortune would likely reverse from FY13 given its order book schedule on hand. Midas' share price is likely to react positively as a result of this announcement. Maintain BUY and S$0.60 fair value estimate, pegged to 1.2x FY13F P/B. (Wong Teck Ching Andy)

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

NEWS HEADLINES - US stocks eked out modest gains on Wed after earnings from Time Warner Inc and others reinforced a theme of steady improvement for consumer companies. The Dow ended a choppy trading day up 7.22 points, or 0.1%, at 13,986.52. - Further foreign labour curbs could jeopardise Singapore's position as a business hub for the Asia-Pacific region, according to the Singapore International Chamber of Commerce. - Nielsen's latest survey showed that Singapore could see a potential slowdown in consumer spending in 2013. - Global Logistic Properties' PATMI grew 30.7% YoY to US$112.8m in 3QFY13, boosted by fair value gains in investment properties and higher rents in China. - Pacific Andes Resources Development Limited posted a 42.5% YoY increase in 1QFY13 PATMI to HK$199.0m despite a 3.0% slip in revenue.

MARKET PULSE: Consumer Sector, Petra Foods, United Envirotech, ECS Holdings (10 Dec 2012)

Stock Name: Petra
Company Name: PETRA FOODS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.12

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.55

Stock Name: UtdEnvirotech
Company Name: UNITED ENVIROTECH LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.67

Stock Name: ECS
Company Name: ECS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.56

Please use this version - includes Petra Foods

MARKET PULSE: Consumer Sector, United Envirotech, ECS Holdings

10 Dec 2012

KEY IDEA Consumer sector: Riding the EM wave Summary: Despite starting 2012 on a bright note, the FTSE ST Consumer Services Index (FSTCS Index) failed to recover from a mid-year slump and could potentially finish in negative territory for the second consecutive year. While the broad sector index produced sputtering results, an investment strategy focused on riding the wave of emerging Asia consumer demand fared extremely well in 2012. Entering 2013, we advocate a similar strategy and continue to favour the growing domestic consumption of our regional EM peers. As the FSTCS Index has mostly lagged the FTSE Straits Times Index on a historical basis, we deem that this trend will continue and as such maintain our NEUTRALoutlook. For EM Asia consumer exposure, our top picks are Petra Foods [BUY; FV: S$3.12] and Viz Branz [BUY; FV: S$0.74]. We also advocate a defensive allocation into Sheng Siong Group [BUY; FV: S$0.55] for its resilience against economic downturns and attractive dividend yield. (Lim Siyi) MORE REPORTS Petra Foods: Pickup in 2013 Summary: Since our initiation report on Petra Foods, the counter has appreciated by 7.5% to continue on its amazing ascension in 2012 (YTD: +55%). Our valuation of Petra - pegged at 24x 12-month forward PE - is at a premium to its global peers but the desire of investors to gain exposure to emerging Asia consumer demand clearly vindicates it. For 2013, we project a modest top-line growth of 3.8%, mainly on the back of the Branded Consumer division, while we also anticipate margin improvements from the 7.6% in FY11 to ~9% by FY13F. We remain sanguine over Petra's growth prospects in the coming year, and in light of Petra's recent appreciation, we raise our multiple to 25x 12-month forward PE (approaching one standard deviation above its six-year average forward PE. This increases our fair value to S$3.12 from S$2.98 previously. Maintain BUY. (Lim Siyi) United Envirotech: Focus on growing treatment income Summary: United Envirotech Limited (UEL) is likely to see its growth trend continuing in 2HFY13 after a strong showing in 1HFY13, buoyed by the still-growing demand for membrane-based water and waste-water treatment services in China. In particular, management intends to focus on looking for good existing TOT projects where it can inject its membrane technology and management know-how to increase existing cashflows. As before, management remains on the lookout for more such water projects, likely in Shandong, Jiangsu and Liaoning. As we have previously raised our FY13 estimates after a much better-than-expected 1HFY13 showing, we opt to leave it unchanged. Our fair value also remains at S$0.67 (based on 12.5x blended FY13/FY14F EPS). Maintain BUY. (Carey Wong)

ECS Holdings: Change in CEO and appointment of Executive Chairman Summary: ECS Holdings (ECS) announced a couple of key management changes over the weekend, with the most notable being the appointment of Mr. Ong Wei Hiam as new CEO from 1 Jan 2013. This comes after current CEO Mr. Narong Intanate announced his intention to retire and step down from the role on 31 Dec 2012 when his employment contract expires. We expect the leadership transition at ECS to be smooth with minimal disruption given the following reasons: 1) Mr. Ong is already an Executive Director at ECS, 2) currently holds the CFO role at VST Holdings (which he will retain) which is the HKSE-listed parent company of ECS (89.5% equity stake) and is also in the same distribution industry, 3) Mr. Intanate will continue to serve on the ECS board as Non-Executive Director and hence ECS will still be able to tap on his experience and expertise. Meanwhile, Mr. Tay Eng Hoe, a founding director, former CEO and current Non-Executive Chairman of ECS, will become Executive Chairman for a year (subject to renewal on a yearly basis), effective 1 Jan 2013. We maintain our BUY rating and S$0.56 fair value estimate on ECS. (Wong Teck Ching Andy) For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks ended mostly higher on Fri, after a better-than-expected Nov jobs report offset a report showing a drop in consumer sentiment in Dec. The Dow gained 0.6%, the S&P 500 Index added 0.3% to 1,418.07; but Nasdaq fell 0.4%, weighed down by Apple Inc. - Wee Hur Holdings' construction arm has been awarded a S$150m construction contract for the Parc Centros condominium in Punggol, a joint venture under the group's property development arm. The contract raises the group's order book to S$540m. - Moya Asia plans to raise as much as S$10.5m through a rights issue of up to 262m shares at S$0.04 each, mostly as capex for current projects in Indonesia.

MARKET PULSE: Olam, Biosensor, Viz Branz, KepCorp, Sembcorp Marine, Yangzijiang (4 Dec 2012)

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.44

Stock Name: Biosensors
Company Name: BIOSENSORS INT'L GROUP, LTD.

Research House: OCBC

Price Call: BUY

Target Price: 1.69

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

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: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 0.95

MARKET PULSE: Olam, Biosensor, Viz Branz, KepCorp, Sembcorp Marine, Yangzijiang

4 Dec 2012

KEY IDEA Olam Int'l: Issues bonds with stapled warrants Olam International Limited (Olam) is planning a rights issue consisting of US$750m worth of 5-year bonds with a 6.75% coupon (but effective yield closer to 8% due to 95% issue price) with stapled warrants (up to US$500m if fully converted at US$1.291 each after three years). Besides being fully underwritten (by Credit Suisse, DBS, HSBC and JP Morgan), Temasek Holdings will not only undertake to subscribe to its pro-rata entitlement of the rights, but the sovereign fund is also committed to take 100% of the rights not subscribed by existing shareholders. While we think that there could be some near-term boost to its share price, we note that the outlook for the next six months remains quite muted. As such, we are maintaining our HOLD rating and S$1.44 fair value for now. (Carey Wong) MORE REPORTS Biosensors International Group: Top healthcare pick for 2013 We project Biosensors International Group (BIG) to report revenue and core EPS CAGR of 17.6% and 10.9% from FY12-14F, respectively. In our opinion, growth would be underpinned by its superior drug-eluting stent (DES) technology, which would enable BIG to continue its market share gains from competitors to mitigate the challenges in the industry. BIG's healthy financial position would also enhance its ability to weather the vagaries of the global economy, finance its R&D and clinical trials, and provide it with ample ammunition for share buybacks and M&A activities. BIG currently trades at 12.1x blended FY13/14F core EPS, which is approximately one standard deviation below its 3-year average forward core PER. Maintain BUY with an unchanged DCF-derived fair value estimate of S$1.69, which implies a potential upside return of 48.2%. We are recommending BIG as our top healthcare pick for 2013. (Wong Teck Ching Andy) Viz Branz Limited: Another step forward Viz Branz's (VB) former CEO has unreservedly withdrawn all his previous allegations of impropriety about a series of payments involving the company. We view this development as a positive event that coincides with the possibility of a general offer (GO) by Lam Soon Cannery. Taken together, the resolution of an outstanding family dispute and the absence of a dividend declaration for FY12 suggest that preparations are being made for an impending offer. While the counter has fluctuated in recent trading, we urge investors to keep the faith and reiterate our stance that a GO will materialise. In addition, the investment case for VB remains sound with its strong fundamentals and FY13 growth projections. We maintain BUY with an unchanged fair value estimate of S$0.74. (Lim Siyi) Keppel Corporation: Confirms US$1.2b worth of semi-sub orders Keppel Corporation (KEP) announced this morning that its O&M arm has signed contract with Naftogaz of Ukraine to construct two semi-submersible drilling rigs. We had earlier mentioned that the price tag for these two rigs would be about US$1.2b, and KEP has confirmed the price as such. Like the earlier two jack-ups delivered by KEP for the same customer, these rigs are meant for the Black Sea as well. This contract brings KEP's order wins to S$10b YTD, forming 98% of our full year estimate. Maintain BUY with S$12.49 fair value estimate. (Low Pei Han) Sembcorp Marine: Updates on Jurong Shipyard accident Following the failure of the jack-up mechanism of a jack-up rig at Jurong Shipyard which caused the injuries of workers, Sembcorp Marine (SMM) updated that out of a total of 89 workers who were admitted to hospital for observation or treatment, 77 have been discharged as at 7.30pm yesterday. According to newswires, the rig involved is a Friede and Goldman JU3000N for an American customer, which we think is likely to be Noble Corp. We believe that the scheduled delivery date is around the end of next year, and chances of a delay in delivery are unlikely to be high. Still, we await more information as investigations are ongoing. Meanwhile, we have a BUY rating with S$5.84 fair value estimate on SMM. (Low Pei Han) Yangzijiang Shipbuilding: Secures maiden offshore order Yangzijiang Shipbuilding (YZJ) announced that it has clinched its first offshore order worth US$170m for a jack-up drilling rig. Its 78%-owned Jiangsu Yangzijiang Offshore Engineering Co had entered into a contract with a subsidiary of Mena Offshore Investments, a Malaysian-domiciled fund managed by Offshore Logistics Asia Pacific (OLAP). OLAP is a leading oil and gas equipment supplier to the Asian market. The unit will be of Letourneau Super 116E design (delivery 2Q15), and the contract includes an option for one more identical unit. For the sake of comparison, Keppel Corporation had secured an order to build a unit of the same design in Apr this year for delivery in 1Q14 with a price tag of US$205m. Maintain HOLD on YZJ with a fair value estimate of S$0.95. (Low Pei Han)

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

NEWS HEADLINES - US stocks ended lower on Monday as new data showed that manufacturing activity unexpectedly shrank in Nov, amid little progress in talks to avoid the looming fiscal cliff. The Dow and S&P 500 Index each slid 0.5%, to 12,965.60 and 1,409.46, respectively, while the Nasdaq ended 0.3% lower at 3,002.20. - Geo Energy Resources has appointed commodities investor Jim Rogers as a non-executive director. Trading in its shares is expected to resume this morning. - China Farm Equipment's chairman, CEO and controlling shareholder has offered to buy the remaining 12.29% of the firm that he does not already own, for S$0.28 per share or S$8.3m in total. If successful, he intends to delist the company from SGX.

MARKET PULSE: Consumer Sector, Singapore Economy, KS Energy (16 Nov 2012)

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.49

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

Stock Name: BreadTalk
Company Name: BREADTALK GROUP LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.49

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.78

MARKET PULSE: Consumer Sector, Singapore Economy, KS Energy

16 Nov 2012

KEY IDEA Consumer sector: 3Q comeback; rally in the fourth? Summary: As a recap, consumer-related companies within the FTSE Straits Times Consumer Services Index fared better than expected in 3QCY12. While revenue growth was pretty much in line with consensus estimates, effective cost management resulted in earnings per share exceeding projections by 8.2%. Overall retail sales figures for Sep (excluding motor vehicles) continued to post encouraging data with the third month of gains in the most recent four. Furthermore, retail segments more vulnerable to swings in the economy exhibited a slowing pace of declines. Given the improving environment, we upgrade the sector to NEUTRAL. We continue to favour defensive plays with high dividend yields (Sheng Siong [BUY; FV: S$0.49]) and stocks with diversified geographical revenue streams (Viz Branz [BUY; FV: S$0.74]). We will avoid stocks with high F&B services exposure such as BreadTalk Group [SELL; FV: S$0.49], which has food court and restaurant operations. (Lim Siyi) MORE REPORTS Singapore Economy: 1.5% growth in 2012 and 1.0-3.0% in 2013 Summary: The Singapore economy grew by 0.3% YoY in 3Q12, worse than the street's expectations of a 0.9% growth and 2Q12's 2.5% increase. On a seasonally-adjusted annualized basis, the economy contracted by 5.9% QoQ, compared to the 0.5% expansion in 2Q12. The pullback in growth was largely due to the decline in externally-oriented sectors such as manufacturing and wholesale trade. Manufacturing declined by 9.6% QoQ with a contraction in the electronics. Construction also contracted by 17.2% with a decline in private sector building activities. Meanwhile, services contracted by 3.5% QoQ. The MTI expects Singapore to grow by 1.5% in 2012, though growth may be slightly lower than forecast if weakness in externally-oriented sectors persist. For 2013, the official growth forecast is 1.0-3.0%, but key risks include the fiscal cutback in the US and the Eurozone debt crisis. (Low Pei Han) KS Energy: Another profitable quarter Summary: KS Energy (KSE) reported a 21.9% increase in revenue to S$161.3m and a net profit of S$14k in 3Q12 vs. a net loss of S$11.5m in 3Q11. 9M12 revenue and gross profit accounted for 80% and 78% of our full year estimates, respectively. Net profit was also within our expectations. 3Q12 marks the group's second quarterly net profit after nine consecutive quarters of net losses. Management is still reticent about funding plans for its convertible bonds that may be redeemed in Mar. It also mentioned that operating conditions from now till early 2013 are likely "to remain challenging". After tweaking our estimates and rolling forward our valuation to 1.2x FY13F NTA, our fair value estimate slips from S$0.83 to S$0.78. Maintain HOLD. (Low Pei Han)

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

NEWS HEADLINES - US stocks continued their losing streak on Thursday as investors fretted about the fiscal cliff and the impact of Hurricane Sandy on the economy. The Dow and the S&P 500 Index each slid 0.2%, while Nasdaq fell 0.4%. - The euro zone slid into recession for the second time in four years due to the debt crisis, with 3Q12 GDP declining 0.6% YoY. - Triyards Holdings has won a US$90m order from an Asia-based customer for a mobile offshore platform service unit, taking its orderbook to over US$700m. - Global Logistic Properties has raised S$414m through the sale of 160m new shares at S$2.59 each, to fund its investment in properties in Brazil. Its share price fell 4.8% to S$2.59 on the news.

MARKET PULSE: CityDev, KSH, Olam, Swiber, STX OSV, Valuetronics, Viz Branz, Midas, KSE (15 Nov 2012)

Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 13.10

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.50

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.80

Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.65

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.69

Stock Name: Valuetronics
Company Name: VALUETRONICS HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.20

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.735

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.505

Stock Name: KS Energy
Company Name: KS ENERGY LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.83

MARKET PULSE: CityDev, KSH, Olam, Swiber, STX OSV, Valuetronics, Viz Branz, Midas, KSE

15 Nov 2012

KEY IDEA City Developments Limited: Looking ahead to Redhill launch in 4Q12 CDL reported 3Q12 PATMI of $134.5 which showed a marginal YoY increase (1.8%) over 3Q11. Recognition at development projects kept mostly in pace with the previous quarter and we judge this set of results to be generally in line with expectations. HAUS@SERANGOON GARDEN and Up@Robertson Quay have 86 and 48 units sold to date, respectively. In addition, The Palette and Bartley Residences are over 94% and 92% sold, respectively. Looking ahead to 4Q12, we expect CDL to launch the 508-unit condominium development (the Echelon) near Redhill MRT station and, in 1H13, another 912-unit project in Pasir Ris Grove. Hotel subsidiary M&C reported 3Q12 PATMI of GBP30.7, down 47.5% YoY due to the absence of disposal profit in 3Q11. YTD overall REVPAR was up 4.9%, with a particularly strong showing from London (up 10.2% YoY) from the Olympic games. Maintain BUYwith an unchanged fair value estimate of S$13.10 (15% RNAV disc.). (Eli Lee) MORE REPORTS KSH Holdings: Healthy earnings and dividends growth KSH reported 2QFY13 PATMI of S$9.8m, up a whooping 90% YoY mainly due to increased contributions from the construction business and project recognition from Cityscape@Farrer Park. We judge this set of results to be mostly in line with expectations as 1HFY13 PATMI now made up 46% of our FY13 forecast. We note the pace of profit recognition at Cityscape@Farrer in 2QFY13 (through share of results of associates) was somewhat below expectations - S$2.1m versus an expected S$3.5m-S$4.5m - but this was offset by higher profits from the construction segment. Management also announced an interim dividend of 1.35 S-cents, up 35% from a 1.0 S-cent interim dividend last year. KSH's order book continues to be healthy at S$375m as of end Sep 12, down 10% QoQ versus S$416m as of end Jun 12. Maintain BUY with an unchanged S$0.50 fair value estimate (50% discount to RNAV). (Eli Lee) Olam Int'l: 1QFY13 results mostly in line Olam International Limited (Olam) reported 1QFY13 revenue of S$4689.1m, though up 45% YoY, it was down 9% QoQ; but still met 24% of our full-year forecast. Reported net profit came in at S$43.2m, up 26% YoY but down 61% QoQ. We estimate that core earnings (excluding financial and biological revaluation gains) fell 16% YoY and 18% QoQ to S$28.4m, meeting around 8% of our FY13 estimate; but we still deem its results to be in line as 1Q typically contributes just 5-10% of its full-year earnings due to the unique seasonal pattern of its portfolio. As its results were mostly in line with our forecast, we are keeping our estimates unchanged. As such, our fair value also remains at S$1.80, or 12.5x FY13F EPS. Given the limited upside, we maintain our HOLD rating. (Carey Wong) Swiber Holdings: First dividend since FY05 Summary: Swiber Holdings (Swiber) reported a 92.6% YoY rise in revenue to US$265.3m but saw a 45.8% fall in net profit to US$7.3m in 3Q12, such that 9M12 net profit accounted for about 80% of our full year estimates, within expectations. Gross margin declined from 16.6% in 3Q11 to 14.1% in 3Q12, but was similar to 2Q12's 14.2%. Meanwhile, net debt to equity rose from 0.89x in Jun 2012 to 1.00x in Sep 2012. As of Nov 2012, Swiber's order book stood around US$1.4b vs. US$1.6b as at Aug. The group has also proposed an interim dividend of S$0.01/share. Meanwhile, we would be monitoring the group's operating cashflows. Maintain HOLDwith slightly lower fair value estimate of S$0.65 (prev. S$0.66). (Low Pei Han) STX OSV: Subdued 3Q STX OSV reported a fairly muted set of 3Q12 results that were below ours and the street's expectations. 3Q revenue and net profit to shareholders declined by 27% and 39% YoY to NOK 2.5b and NOK 228m respectively. On a sequential basis, revenue and net profit fell by 26% and 18% respectively. The weaker performance in 3Q12 was mainly due to slower pace of revenue recognition during the tail end of shipbuilding. Its yards reported generally stable operations, but the slow order intake (only NOK 900m in 3Q) may lead to under-utilization in its Norwegian yards in 2013. In view of this and the weaker-than-expected 3Q results, we reduce our fair value estimate to S$1.69 (previously S$2.00), Maintain BUY.(Chia Jiunyang) Valuetronics Holdings: Dearth of near-term catalysts Valuetronics Holdings Limited's (VHL) 2QFY13 PATMI plunged 88.5% YoY to HK$3.3m as it incurred hefty one-off termination expenses and provisions due to the cessation of its Licensing business. Revenue from continued operations was flat at HK$595.5m, or 11.6% below our forecast. However, we estimate that core PATMI came in at HK$31.5m, a 34.1% YoY increase, which exceeded our HK$26.2m projection. Looking ahead, we believe that sales from its largest customer would likely moderate, while there is also a strong sense of caution amongst its major customers. We trim our FY13 and FY14 revenue estimates by 9.7% and 10.6%, but raise our core PATMI forecasts by 8.0% and 6.5%, respectively, on higher margin assumptions. Applying a lower 4x (previously 4.5x) peg and rolling forward our valuations to blended FY13/14F core EPS, our fair value estimate falls from S$0.21 to S$0.20. While estimated 8.9% yield is attractive, we maintain HOLD given the lack of near-term catalysts. (Wong Teck Ching Andy) Viz Branz Limited: Faith will be rewarded Viz Branz (VB) reported a decent 1Q13 performance with continued margin improvements. Although revenue declined slightly, PATMI grew 17.4% YoY to S$4.5m following favourable raw material costs and effective cost control measures. With the performance coming in within our expectations, our FY13 outlook for VB remains unchanged, and we retain our fair value estimate of S$0.74. While there is no update on further share purchases by Lam Soon, we reiterate our optimism that an eventual general offer will materialize in the near-term. Given the recent price correction of the counter - and a supportive price base of S$0.735 from Lam Soon's partial stake purchase - we feel that an investment opportunity has presented itself. With a potential upside of nearly 10%, we upgrade VB to BUY. (Lim Siyi) Midas Holdings: 3Q12 net loss wider than expected Midas Holdings (Midas) reported a 21.8% YoY dip in its 3Q12 revenue to CNY202.7m, which was 6.0% below our projection. As a result of higher operating expenses, finance costs and a share of loss of CNY7.0m from its associated company, Nanjing SR Puzhen Rail Transport, Midas registered a loss before tax of CNY1.6m, which matched our estimate. However, net loss of CNY6.1m (3Q11: CNY27.4m PATMI) came in worse than our CNY1.3m forecast due to higher-than-expected income tax expenses. Midas' net gearing ratio also increased from 2.2% in 3Q11 and 22.5% in 2Q12 to 23.7% in 3Q12 as it increased its borrowings to finance its working capital requirements and capacity expansion plans. We expect this to translate into higher finance costs for the group in 4Q12 and FY13 and will thus adjust our estimates accordingly. More details will be provided after the analyst conference call. We still opine that FY12 would be a non-event for Midas and investors should instead focus on the likelihood of a recovery in its business operations in FY13, in line with the Chinese government's commitment to expand its rail transport system. We maintain our BUYrating but our S$0.505 fair value estimate is under review. (Wong Teck Ching Andy) KS Energy: Another profitable quarter KS Energy (KSE) reported a 21.9% YoY rise in revenue to S$161.3m and a net profit of S$14k in 3Q12 vs net loss of S$11.5m in 3Q11. 9M12 revenue and operating profit accounted for 80% and 73% of our full year estimates. 9M12 net profit was also within expectations, amounting to S$391k vs our full year estimate of a net loss of S$3.5m. Revenue growth was driven by the distribution business in 3Q12, while the drilling segment had a relatively stable quarter. More assets are expected to be deployed over the next 12 months, and we expect the earliest signs of a more significant recovery only in 2Q13. Pending a call with management, we maintain our HOLD rating but put our fair value estimate of S$0.83 under review. (Low Pei Han)

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

NEWS HEADLINES - US stocks slid further on Wednesday as worries about the fiscal cliff continued to weigh heavily on sentiment. The Dow slumped 1.5% to 12,570.95, despite surprisingly good results from Cisco Systems, while the S&P 500 Index fell 1.4% to 1,355.49 and the Nasdaq ended 1.3% lower at 2,846.81. - Otto Marine reported 3Q12 PATMI of US$4.7m, reversing a US$16.2m loss a year earlier. The improvement was supported by an 84% YoY jump in revenue to US$78.4m, with the increase coming mainly from its chartering and subsea services segments.

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: Technology Sector, Ascott Residence, Viz Branz, SGX (4 Sep 2012)

Stock Name: Venture
Company Name: VENTURE CORPORATION LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 8.72

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.34

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.74

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 6.80

MARKET PULSE: Technology Sector, Ascott Residence, Viz Branz, SGX

4 Sep 2012

KEY IDEA Technology Sector: Outlook remains muted Singapore-listed tech companies reported lacklustre results in general during the recently concluded 2QCY12 reporting season. Under our sector coverage, only Micro-Mechanics (MMH) exceeded our forecast; while earnings for the rest missed due largely to lower-than-expected margins. A bright spot during the quarter came from decent dividends declared by some tech companies. Nevertheless, given the still uncertain macroeconomic environment, the guidance we obtained from various companies largely pointed to caution amongst key customers and thus weak orders visibility. This is despite the expected launch of new programmes and products in 2H12. Maintain NEUTRAL on the tech sector. We retain Venture Corp [BUY; FV: S$8.72] as our top pick but remove VHL following our downgrade to HOLD after its disappointing 1QFY13 results. (Wong Teck Ching Andy) MORE REPORTS Ascott Residence Trust: Holding its own According to CBRE, the potential supply of serviced residence units in Singapore is set to grow at 5.1% p.a. to 5,765 units by 2014. While this is higher than the rate at which hotel room supply is expected to grow over the same period (4.6% p.a., see our CDLHT report dated 120827), we note that occupancy rates for serviced residences is Singapore are stronger than for hotels in general. Serviced residences clocked average occupancy of 91.8% for 2011 (CBRE), versus an average of 86% for hotels (STB). We believe that ART's Singapore properties will hold their own against upcoming serviced residence supply given their high quality, branding and good locations. We maintain a BUY rating and fair value estimate of S$1.34. (Sarah Ong) Viz Branz Limited: Bonus issue on hold In an update to its share sale announcement back in July, Viz Branz (VB) announced yesterday that its substantial shareholder and one of the potential interest parties had entered into a non-binding indicative preliminary letter of indication of interest (LOII) to facilitate the advancement of further discussions. Following this update, VB will put its proposed one-for-one bonus issue on hold to prevent any complications should the share sale eventually materialize. While the LOII is non-definitive and is generally non-binding, we view the update as a positive development in a potential share sale. As VB's share price increased 4% since our last report on 28 August (+113% on a year-to-date basis), we downgrade our rating to HOLD with an unchanged fair value estimate of S$0.74. In addition, we reiterate our view that should the share sale take place and an eventual takeover materializes, we are only anticipating a small premium of 2% (based on analysis of previous acquisitions/takeovers). (Lim Siyi) SGX: ASEAN Trading Link to start on 18 Sep Singapore Exchange (SGX), together with Bursa Malaysia, has announced that the ASEAN Trading Link will commence on 18 Sep 2012. These are the first two markets to be connected on the ASEAN Trading Link with the Stock Exchange of Thailand slated to be next. Meantime, the SGX also announced rule changes to facilitate the introduction of the ASEAN Trading Link. While this is a favourable development, it is likely to have already been reflected in its share price as plans for the ASEAN Trading Link have been underway for a while. We are not making any adjustments to our earnings estimates for now. We have a HOLD on the stock with a fair value estimate of S$6.80. (Carmen Lee)

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

NEWS HEADLINES - Gold prices continued last week's rise to a five-month high on Monday as expectations increased that the Fed would launch another round of quantitative easing. Floor trading was closed for the US Labor Day holiday. - Nam Cheong has secured two contracts worth a total of US$59m for two Accommodation Work Barges. With these contracts, Nam Cheong's YTD order book has hit a high of MYR1.06b in contract value, surpassing last year's figure of MYR757m. - Chip Eng Seng Corporation has clinched a S$210m contract from the HDB. The group's order book has grown to S$711m from the S$364m announced in its 2Q statement. - TEE International, KSH Holdings and Heeton Holdings will enter into a joint venture to redevelop existing properties situated at Unit Nos. 48-60 Lorong 32 Geylang Road. TEE, KSH and Heeton will be holding 45%, 45% and 10% of the project respectively. - LionGold Corp has acquired over 97% of the issued and paid up capital of ASX-listed Castlemaine Goldfields Ltd at the close of the proposed takeover on 31 Aug.

OCBC upgrades VIZ Branz to 'buy'

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.74

OCBC Investment Research upgraded instant coffee maker VIZ Branz to ‘buy‘ from ‘hold‘ and raised its target price to S$0.74 from S$0.69, on expectations of continued growth in China and improving margins.

The company posted fourth-quarter net profit of S$3.3 million, more than double from a year ago, helped by cost savings.

OCBC said VIZ Branz’s 2012 sales in China rose 12% to $93.6 million, helping to offset a 3.2% fall in Southeast Asia.

By 10:30 a.m., Viz Branz rose 0.7% to $0.685, and have surged 107% since the start of the year, outperforming the FT ST Fledgling Index’s 16% rise.

Although a possible slowdown in domestic consumption in Asian markets could be a concern, OCBC said the relative affordability of VIZ Branz’s products will help support sales.

MARKET PULSE: Tat Hong, Viz Branz, KepCorp, Tiger (11 Jul 2012)

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

Research House: OCBC

Price Call: BUY

Target Price: 1.21

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 13.38

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.76

MARKET PULSE: Tat Hong, Viz Branz, KepCorp, Tiger

11 Jul 2012

KEY IDEA Tat Hong Holdings: Prime beneficiary to infrastructure boom Summary: According to media reports, the Hong Kong government is considering a proposal to ramp up the number of new flats to 50,000 a year (over a two to three year period). This far exceeds the 18,000 flats built in the last fiscal year ending March. If the plan passes, there may be a surge in the territory's crane demand; and Tat Hong Holdings (Tat Hong) - with one of the largest crane fleet in Asia - would be one of the prime beneficiaries. Even without the proposal to increase new flats, ASEAN countries are already experiencing strong and sustained infrastructure activities over the near and medium term horizons. Tat Hong's business in Australia and China should also improve, driven by post-disaster reconstruction activities and successful restructuring of business operations respectively. Maintain BUY rating with an unchanged S$1.21 fair value estimate. (Chia Jiunyang) MORE REPORTS Viz Branz Limited: General offer in the works? Summary: Viz Branz (VB) announced that a third party (offeror) approached a substantial VB shareholder for preliminary discussions on the possibility of acquiring his stake. Although discussions are still in the early stages and non-binding - and the amount of shares to be acquired are not disclosed - it holds interesting consequences for the company. This news came after VB recently announced that the long-running tussle between its CEO and its previous CEO (son and father relationship) had been resolved. In the interim, we believe VB's share price will rally further following the announcement. We will be speaking to management later and will update according. For now, we put our S$0.52 fair value and Hold rating under review. (Lim Siyi) Keppel Corporation: Secures US$242m jackup rig from Kazakhstan Summary: Keppel Corporation announced that Keppel Kazakhstan and its consortium partner have secured a contract from Teniz Burgylau LLP, a unit of JSC NC "KazMunayGas", for a KFELS B Class jackup rig worth US$242m. Keppel O&M is a 50% shareholder of Keppel Kazakhstan and the work scope of the rig will be shared equally between Keppel Kazakhstan and its consortium partner. The rig is scheduled for delivery in 1Q15 and will be deployed in the Caspian Sea when completed. As mentioned in our previous reports, the Caspian Sea is one of the areas of focus for oil and gas activity going forward, given its vast reserves which remains relatively untapped. Including the LOI from Sete Brasil secured earlier this year, Keppel has secured about S$7b worth of new orders this year, accounting for 68% of our full year estimate. Maintain BUYwith S$13.38 fair value estimate. (Low Pei Han) Tiger Airways: Jun 2012 operating statistics Summary: Tiger Airways (TGR) yesterday announced its Jun 2012 operating statistics. The group's passenger traffic (RPK) increased 3% YoY to 831m while passenger capacity (ASK) grew slightly faster at 4% YoY to 977m. Geographically, Tiger Singapore's passenger traffic grew 15% YoY but Tiger Australia's fell 23% YoY. TGR added that Tiger Australia commenced operations from its second base in Sydney on 1 Jul 2012 and is expected to return to its previous operating levels, before flying restrictions were imposed by Australian authorities last year, by Oct 2012. We maintain our fair value estimate of S$0.76/share and BUY rating on TGR. (Eric Teo)

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

NEWS HEADLINES - US stocks fell for a fourth session as concerns about 2Q earnings increased after Cummins Inc., a manufacturer of natural gas engines, reduced its sales forecast. The S&P 500 Index and the Dow shed 0.8% and 0.7% respectively. - European leaders have moved to bolster Spain's banks, agreeing to provide as much as EUR100b (US$123b) in rescue loans. - Home-grown food caterer Neo Group's IPO, which closed yesterday, was 15 times subscribed. The counter begins trading on Catalist today. The IPO offer price was S$0.30. - Condensed milk manufacturer Etika International has made its maiden entry into the fast food segment with exclusive rights to develop the "Texas Chicken" franchise in Malaysia and Brunei. The first restaurant is scheduled to open in Klang Valley by Dec 2012. - Duty Free International posted 1Q13 net profit of MYR13.1m (~S$5.2m), down 0.9% YoY. Revenue fell 4% to MYR134m due to persistent flood issues and the recent bombings in Thailand.

OIR BITES: Viz Branz's trading halt

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

VIZ BRANZ LIMITED 10 Jul 2012

Dear TRs, Viz Branz (VB) has called for a trading halt on its shares at 1.55pm. The last time it called for a trading halt (25 May), VB announced a proposed bonus share issue. We think there are several possibilities for this halt, one of which is an update on the dispute between its current CEO and previous CEO (father and son). We will update again when we have more details. In the meantime, we have a HOLD rating on the stock with a fair value estimate of S$0.52.

MARKET PULSE: Osim, Viz Branz, Marco Polo, Cache, SIAEC (8 May 2012)

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: OCBC

Price Call: BUY

Target Price: 1.61

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.52

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

Research House: OCBC

Price Call: HOLD

Target Price: 0.43

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.11

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

Research House: OCBC

Price Call: BUY

Target Price: 3.88

MARKET PULSE: Osim, Viz Branz, Marco Polo, Cache, SIAEC

8 May 2012

KEY IDEA OSIM International: Bright start underpinned by strong execution OSIM International Ltd (OSIM) reported 1Q12 PATMI of S$22.2m (+10.3% YoY, +30.2% QoQ), strongly exceeding our estimates by 19.4%. Sales was flat YoY at S$150.1m (+5.2% QoQ), due largely to a high base effect in 1Q11 and tracked closely with our forecast of S$149.2m. An interim dividend of 1 S cent was declared (payable on 13 Jun 2012), similar to 1Q11. We opine that management has executed well on its initiatives, as exemplified by continued productivity gains and the launch of innovative products which helped to boost its net margin by 1.3ppt YoY to 14.8% in 1Q12. We raise our FY12 and FY13 EPS forecasts by 7.5% and 4.9%, respectively, and also ascribe a higher valuation peg of 14.3x (previously 12.9x) to our projected FY12F EPS. This raises our fair value estimate from S$1.35 to S$1.61. Upgrade OSIM from Hold to BUY. (Wong Teck Ching Andy) MORE REPORTS Viz Branz Limited: Stellar set of 3Q12 results Viz Branz (VB) reported another set of impressive results yesterday. Although 3Q12 revenue fell marginally by S$0.2m (-0.4% YoY) to S$43.0m, its gross profit margin improved by 2.3 percentage points to 34% while operating profit rose S$1.9m (+38.3% YoY) on the back of a sharp reduction in operating expenses, which caused its 3Q12 net profit to jump 50.9% YoY to S$4.6m. Going forward, we expect a continued reduction in VB's operating expenses as the benefits from economies of scale and scope in its operations become more apparent. Coupled with the persistence of weak raw material prices (i.e. coffee and sugar), we are anticipating a record net profit year for VB in FY12. With this encouraging set of results and adjustment to its cost structure and potential growth market in Myanmar, we adjust our FY12 and FY13 cost estimates for VB accordingly, which resulted in an increase to our discounted cash-flow-to-equity valuation to S$0.52 from S$0.37 previously. Maintain HOLD. (Lim Siyi) Marco Polo Marine: In-line 2QFY12 results Marco Polo Marine (MPM) reported a 40% YoY rise in revenue to S$31.0m but saw a 22% fall in net profit to S$4.2m in 2QFY12, such that 1HFY12 net profit accounted for 49% and 44% of ours and the street's full year estimates, respectively. Revenue was boosted by the group's shipyard operations, but a drop in other operating income, higher admin expenses and share of loss of associated companies led to a lower bottom-line. Going forward, MPM expects the shipyard operations to continue to drive the group's overall revenue for 2HFY12, mainly from the ship repair side. Meanwhile, MPM will set up a JV with Marine Tankers Holdings Pte Ltd to own and manage bunkering vessels. Maintain HOLD with unchanged S$0.43 fair value estimate on the stock. (Low Pei Han) Cache Logistic Trust: Acquisition of Pandan Logistics Hub Cache announced that it would acquire Pandan Logistics Hub (PLH) for S$66m via a sale and leaseback arrangement with CWT Limited. PLH, a five-storey ramp-up logistics warehouse, has a GFA of 329,109 sq ft and is presently fully-occupied. The contracted average lease term is 4.3 years and NPI yield is 7.6%. The acquisition is expected to be wholly funded by debt, which we view favorably and expect accretion to the REIT's DPU yield upon completion. We maintain our BUY rating on the REIT and put our fair value estimate of S$1.11 unchanged for now, pending further details of the debt financing and completion of the acquisition. (Kevin Tan) SIA Engineering: Good 4Q12 earnings SIA Engineering Co Ltd (SIAEC) last night reported its 4QFY12 financial results. Revenue grew 16% YoY and 4% QoQ to S$316.5m, while PATMI gained 9% YoY and 4% QoQ to S$66.3m. For FY12, revenue and PATMI came in respectively at 6% and 4% higher than our estimates and 3% and 1% higher than consensus estimates. SIAEC also announced a final dividend of S$0.15/share, after an interim dividend of S$0.06/share post 1HFY12. We put our fair value estimate of S$3.88/share and BUY rating on SIAEC UNDER REVIEW, pending a briefing with management later today. (Eric Teo)

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

NEWS HEADLINES - US stock indexes closed mostly flat after opening lower due to concerns that elections in France and Greece could hinder the resolution of Eurozone debt crisis. - The SGX said yesterday that it is out of the running in the bid for the London Metal Exchange (LME). - Sembcorp Industries has made its first-ever investment in wind power in a US$85.5m deal to acquire NYSE-listed AES Corporation's power assets in China. - Hutchison Port Holdings posted 1Q12 PATMI of HK$462.8m (S$74.3m), up 1% from the projection in its IPO prospectus. Revenue and other income, however, fell 6% short of projections. - Commodities Logistics company CWT Ltd saw 1Q12 net profit jump 213% YoY to S$26.4m as it enjoyed revenue from a business stake it acquired in Jul 2011. - FJ Benjamin Holdings registered 3Q12 PATMI of S$3.5m, up 8% YoY on the back of the best 3Q revenue in five years. Revenue rose 7% YoY to S$95.8m.

Viz Branz rated 'hold' by OCBC

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.37

OCBC Investment Research in a Mar 15 research report says: "Yesterday’s market action saw the share price of Viz Branz (VB) rose more than 14% to as high as 53.5 cents before correcting down to close at 43 cents at the end of the day.

"It was a continuation from Tuesday's strong rally of 16.7%, which saw VB hit a then all-time high of 45.5 cents. In light of VB’s relatively light daily trading volume, the sharp gains on both days on unusually high volumes, came as a huge surprise to the market.

"However, management communicated to us that there were no changes to daily company operations, and also denied any knowledge of any developments regarding VB’s existing share ownership structure.

"Unchanged fair value of 37 cents as we continue to like the counter for its promising 2H12 outlook and growth potential. MAINTAIN HOLD."

Viz Branz rated 'hold' by OCBC

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.33

OCBC Investment Research in a Jan 18 research report says: "Following the settlement agreement between Viz Branz's (VB) former and current CEO (father-son relationship), attention has been on the impending transfer of a 15% stake from the latter to the former, which will trigger a mandatory general offer if an exemption is not obtained from the Securities Industry Council.

"This focus has been a catalyst for its share price of late despite the lack of further updates from the company since mid-Dec.

"Incorporating the above into our assumptions, we raised our FY2012 revenue growth projections by 3% from $169 million to $174 million, which improved our bottom line by $1.2 million to $12.2 million. Fair value estimate of 33 cents (32 cents previously). MAINTAIN HOLD."

Viz Branz rated 'hold' by OCBC

Stock Name: VizBranz
Company Name: VIZ BRANZ LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.27

OCBC Investment Research in a Sept 5 research report says: "Viz Branz reported a 15.1% decline in its FY2011 net profit from $14.4 million to $12.2 million as the result of higher raw material costs experienced during the year.

"Although its FY2011 revenue came in within 0.4% of our FY2011 forecast and showed an 8.5% improvement to $165.7 million, a subsequent 15.2% jump in cost of sales dragged its gross profit margins down by four percentage points to 31.7%, causing our bottom line estimates to deviate by 17%.

"Management still managed to declare a final dividend of 0.5 cents to bring the total dividends declared this year to 1.75 cents a share for a dividend yield of 9.6% (FY10: 3.25 cents; 12.5%). Fair value of 27 cents (30 cents previously), which includes a 15% discount to account for its low trading volume. MAINTAIN HOLD."