OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: Credit Suisse

Price Call: SELL

Target Price: 0.90

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.41

Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD

Research House: OCBC

Price Call: BUY

Target Price: 6.48

Market Compass

27 June 2013~ Good Morning Singapore!

Singapore Idea Snippets:

27 June 2013~ Good Morning Singapore! Central Execution Team - The Excellence of Execution This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome. Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day :Technology is just a tool. In terms of getting the kids working together and motivating them, the teacher is the most important. - BILL GATES Singapore: The Day Ahead SINGAPORE DAYBOOK:Output up 2.1% in May as pharma jumps. Transport, precision engineering sectors contract; Q2 GDP growth put at 2% [SINGAPORE] Yet another jump in pharmaceutical output drove manufacturing output higher than expected in May, setting the stage for a sequential rebound in second quarter GDP. Industrial production grew 2.1 per cent year- on-year in May, trouncing the market's expectations for just 0.1 per cent growth but slowing from April's revised growth of 5 per cent. But if the biomedical sector's 22.8 per cent growth is excluded, industrial output would have shrunk 2.4 per cent instead. After seasonal adjustments, manufacturing output grew 1.2 per cent month-on-month. Excluding biomedical production, output would have risen 1 per cent from April. (Source: The Business Times) MARKET SCOOP CFOs upbeat about growth prospects Sin Heng Heavy Machinery plans 1-for-4 rights issue OCBC starts Sembcorp Industries with 'buy' JTC tenders to sell 4 Tuas South sites WEin jv to explore oil and gas in Myanmar Banks slow to revive Singapore trading desks after rate-fixing cull Mugabe heads to Singapore for health check before vote (Source: The Business Times) CREDIT SUISSE Securities says... NOBLE GROUP LTD | UNDERPERFORM | TP: S$0.90 We assume coverage on Noble Group with an UNDERPERFORM rating and a TP of S$0.90, as we expect the company's ROE to be below its COE in FY13, driven by weakness in Agriculture Noble made its first loss in the Agriculture segment in 1Q13, and we expect challenges faced to persist into 2Q13 Lower raw sugar prices are likely to offset higher utilisation of its Brazilian sugar mills Logistics bottlenecks in Brazil will only ease in July at the earliest Oilseed processing in China could see weakness caused by structural overcapacity Despite initiatives taken to reduce its Selling, Administrative and Operating expenses by US$100 mn, we estimate Noble needs to earn an Energy GP/ton of US$9.50 and Agriculture GP/ton of US$4.50 to generate an ROE of above 10.5%, which we believe is unlikely given macro headwinds Our FY13 EPS forecasts are 10% below consensus We base our target price of S$0.90 on 0.9x P/B, in line with global peers DBS VICKERS Securities says ... YONGNAM HOLDINGS LIMITED | BUY | TP: S$0.41 Yongnam has won two new civil engineering subcontracts worth HK$166m (S$27m) in Hong Kong The two projects are namely the Hong Kong Express Link Central-Wan Chai Bypass Tunnel to be completed by April 2014 and the Shatin to Central Link MTR project due for completion by December 2013 The project value is small in our view and within our project win expectations for the year No change to our earnings forecast on this event for now With regards to Yongnam's exposure to insolvent Downtown Line 2 (DTL2) contractor Alpine Bau GmbH, we estimate this could lower our current TP of S$0.41 by 5% if Yongnam provides for losses Yongnam has reported that its exposure will be about S$5m (10% of FY13 earnings) Main contractor Alpine Bau GmbH has filed for insolvency and Yongnam is exposed to package C918 of DTL2 The project value is S$25m, started in March 2011 and due to end in 2Q13 to 3Q13 As this project is very near completion, we estimate that write offs could amount to about c.S$5m if management chooses to do so Otherwise, we remain positive as Yongnam is a strong contender for Yangon Airport Project Results of Yangon Airport's expansion project bid are expected to be announced around July We believe Yongnam's consortium is a strong contender and is one of the front runners If it wins the contract, the Yangon Airport project could add another S$0.12 to the stock price based on our assessment Maintain BUY OCBC Securities says... SEMBCORP INDUSTRIES | BUY | TP: S$6.48 Sembcorp Industries (SCI) is a major industrial group primarily involved in the businesses of 1) utilities, 2) marine and 3) urban development SCI is now a more focused group today after a streamlining of its businesses The nature of SCI's utilities business is relatively stable, as the demand for utilities generally does not vary significantly over a short period of time At the same time, growth is driven by asset acquisition and construction, so there is growth potential, provided that good investment decisions are made SCI's marine arm is also well positioned to capitalise on demand from the offshore oil and gas industry, given its market -leading position Finally, SCI's urban development segment, though small in comparison to the utilities and marine arms, possesses growth potential with its focus on emerging markets SCI has had a good track record in its three main business segments, inspiring confidence in the business and investment community The long-term outlook for its businesses also looks bright, though the Singapore utilities business may, in the short term, be impacted by an expected increase in competition The group has been consistent in paying out dividends of at least S$0.15/share each year since 2009, implying a minimum dividend yield of 3.1% at current prices Initiate with BUY and S$6.48 (based on sum-of-parts method) fair value estimate

DBS Vickers (Spore): Thematic Report : Myanmar: Ride on coattails of Myanmar's reforms

Stock Name: Yoma
Company Name: YOMA STRATEGIC HOLDINGS LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.08

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 3.00

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.41

Stock Name: Tiong Seng
Company Name: TIONG SENG HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.33

Stock Name: SingTel
Company Name: SINGTEL

Research House: DBS Vickers

Price Call: HOLD

Target Price: 3.80

Stock Name: SuperGroup
Company Name: SUPER GROUP LTD.

Research House: DBS Vickers

Price Call: BUY

Target Price: 5.35

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

Research House: DBS Vickers

Price Call: HOLD

Target Price: 9.52

Myanmar
Ride on coattails of Myanmar's reforms

· Myanmar's growth is fast and sustainable

· Abundant opportunities in consumer, tourism, infrastructure and O&G sectors

· Direct access is limited; invest through foreign companies already in or expanding into Myanmar

Reforms have been progressive. Despite skepticisms and multiple challenges, Myanmar's sweeping reforms have resulted in further easing of sanctions on the country, which in turn is drawing new aids, more visitors and even higher interest to trade and invest in Myanmar. Foreign direct investments (FDIs) have reportedly jumped >40% to US$1.4bn in FY2013 while tourist arrivals have surged 54% to 1m. ADB projected that Myanmar GDP would expand >6% in 2013 and could grow 7-8% p.a. over the decade.

Opportunities abound, but pure plays are scarce.To ride on this theme, Yoma (BUY, TP: S$1.08) is our top pick as the most direct play on Myanmar's boom. Share price has hit new highs recently following our upgrade, but we see possible upside to our fair value pending further developments, such as progress of the Landmark project, telco license win or agricultural development amongst others.

Singapore companies expanding in Myanmar are good gateways. Singapore companies are good proxies to ride on several segments in the country's current stage of development.

Infrastructure: Infrastructure development and planning is rapidly underway. To fast track development, foreigners have been invited to bid for mobile networks, airports, and oil & gas exploration. We like Ezion (BUY, TP: S$3.00) and Interra Resources (NR, TP: S$0.57) as Oil & Gas proxies with operations there. Other potential beneficiaries include Yongnam (BUY, TP: S$0.41) in the development of airports, Tiong Seng (BUY, TP: S$0.33) to set up a pre-cast factory, and SingTel (HOLD, TP: S$3.80) in the bidding for a mobile phone license.

Hospitality: Our visit to Yangon earlier this year revealed overwhelming demand for quality hotels, service apartments and offices from the continuous influx of travelers. On this, we expect Amara (NR, FV: S$0.75) to be a beneficiary with its proposed JV for the development of a hotel.

Consumer goods/ services: Lastly, demand for consumer goods and services is poised to grow as affluence picks up. We like Super (BUY, TP: S$5.35) with its leading share in the packaged coffee market. Other companies with presence include FNN (HOLD, TP; S$9.52) with its 55%-owned brewery, and Parkson Retail Asia, which has a 70%/30% JV with Yoma for a 4,000 sqm retail store in Yangon.

Important events: Outcome of telco license (27 Jun), airport tender (July).




-----------------------------------

DBS raises Yongnam Holdings to Buy from Hold

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.41

DBS upgrades Yongnam Holdings (Y02.SG) to Buy from Hold as it believes Yongnam's consortium is a strong contender for Myanmar's airport projects.

"We think Yongnam's consortium stands a good chance of securing the projects given its Singapore and Japan representation. JGC corporation is Japan-based while Yongnam and Changi Airport Group are Singapore-based, all of which are viewed favourably by the Myanmar government."

Read more...

Yongnam Holdings rated 'outperform' by CIMB

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.33

CIMB in a Feb 29 research report says: "FY2011 profit is in line with consensus (103%) and our numbers (102%). FY2011 DPS of 1 cent was a pleasant surprise (0.65 cent in FY2010). Earnings visibility remains solid, backed by an order book of $462 million.

"About 60% of the projects will be delivered in FY2012, with Structural Steelwork taking 39% of the order book, and 61% coming from higher-margin specialist civil engineering.

"Though we are convinced that there is a healthy pipeline of potential projects (worth $1.6 billion in FY2012) in Singapore as well as the region, we no longer think a premium to the 6x CY13 P/E (3-year forward mean) is justifiable. Target price of 33 cents. MAINTAIN OUTPERFORM.

Yongnam Holdings - Bring me to life

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.33

Target S$0.33

YNH''s project pipeline and earnings visibility are good. However, the evanescence of heyday multiples post-construction boom (IR construction) and super-bull market will manage upside to realistic levels.

Source: CIMB Day Break 01 March 2012, Full PDF Report

Yongnam Holdings rated 'outperform' by CIMB

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.40

CIMB in a June 14 research report says: "YNH's contract wins had picked up strongly in 2Q11, with the group securing more than $190 million worth of contracts or 40% of our target for this year.

"Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY2011 earnings target. No change to our EPS estimates or target price of 40 cents, still based on 8x CY12 P/E, a 20% discount to its mid-cycle multiples.

"We also like YNH's undemanding valuations against peers, at 5.2x CY12 P/E vs. the peer average of 7.6x. We expect stock catalysts from contract wins for projects such as the MRT Downtown Line and structural steelwork projects in the Middle East. MAINTAIN OUTPERFORM."

CIMB - SIN: Yongnam Holdings Ltd - All systems in place

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 0.40

	14 Jun 2011 Singapore
Company Update
Yongnam Holdings Ltd [ PDF]
All systems in place -
(YNH SP / YNAM.SI, OUTPERFORM - Maintained, S$0.26 - Tgt. S$0.40, Construction)
YNH's contract wins had picked up strongly in 2Q11, with the group securing more than S$190m worth of contracts or 40% of our target for this year. Coupled with profit margins which had been sustained over the four quarters of 2010 (with a positive surprise in 1Q11), we believe YNH is on track to meet our FY11 earnings target. No change to our EPS estimates or target price of S$0.40, still based on 8x CY12 P/E, a 20% discount to its mid-cycle multiples. We also like YNH's undemanding valuations against peers, at 5.2x CY12 P/E vs. the peer average of 7.6x. We expect stock catalysts from contract wins for projects such as the MRT Downtown Line and structural steelwork projects in the Middle East.

Yongnam Holdings rated 'buy' by DBS

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED
Research House: DBS Vickers

DBS Vickers Securities in a May 20 research report says: "Yongnam Holdings announced that it has secured another structural steel contract worth $50 million for the restoration works to the former Supreme Court building and the former City Hall building.

"This is the fourth contract announced by Yongnam YTD, and comes close on the heels of the Singapore Sports Hub contract worth $75 million secured earlier this month. With this contract, we estimate new order wins YTD in FY2011 should add up to approximately $200 million, including unannounced contracts.

"This translates to more than 50% of our full-year order win projections of around $370 million, and should enhance Yongnam's current orderbook to over $500 million. Target price of 38 cents. MAINTAIN BUY."

Yongnam Holdings rated 'outperform' by CIMB

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED
Research House: CIMB

CIMB in a Mar 1 research report says: "4Q10 net profit of $13.6 million (+64% y-o-y) met our estimate and consensus. FY2010 net profit of $54.4 million (+36% y-o-y) represents 99.5% of our forecast. No surprises with YNH booking its fifth consecutive year of record profits.

Read more...

Yongnam - Yongnam started at Buy by DBS Vickers; with $0.45 target

Stock Name: Yongnam
Company Name: YONGNAM HOLDINGS LIMITED
Research House: DBS Vickers

DBS Vickers starts Yongnam Holdings (Y02.SG) at Buy with $0.45 target price, pegged at 10x FY11 earnings, says Dow Jones.



DBS Vickers says despite construction group’s stronger-than-expected 1H10 results, stock continues to lag peers in terms of valuations.



“However, given the strong fundamentals — its market dominance in the steel strutting space in Singapore and record order books of $460 million — we believe the stock is poised to play catch up,” says the broker.

Tips 23% EPS growth in FY10, 12% in FY11. Expects Yongnam to benefit from increased government spending on infrastructure projects in Singapore, given its track record of involvement in projects like ION Orchard mall, Marina Bay Sands, Circle Line and Downtown Line rail networks. Shares +14.8% at $0.310.