OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: IHH
Company Name: IHH HEALTHCARE BERHAD

Research House: UOB KayHian

Price Call: HOLD

Target Price: 1.42

Stock Name: SGX
Company Name: SINGAPORE EXCHANGE LIMITED

Research House: Credit Suisse

Price Call: BUY

Target Price: 9.25

Market Compass

07 March 2013~ Good Morning Singapore!

Singapore Idea Snippets:

Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day:A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. - WINSTON CHURCHILL Singapore: The Day Ahead SINGAPORE DAYBOOK: New Reit manager's fee model gets thumbs up. MGCCT's model better aligns unitholder interests with management's SINGAPORE] Market watchers have broadly given the nod to an unconventional management fee model introduced by Mapletree Greater China Commercial Trust's (MGCCT) listing, on the grounds that it better aligns unitholder interests with management's. "I think it could become a standard going forward," said one analyst, who declined to be named. MGCCT's management fee structure is such that base fees are pegged to 10 per cent of distribution income, and performance fees to 25 per cent of the growth in distribution per unit (DPU) between financial years, if any. MARKET SCOOP GSH to raise another S$247m via rights issue GLP signs 15,000 sqm of new leases Four units at Queensway Shopping Centre on market Kovan Lodge owners seeking nearly S$30m S'pore directors' fees rise 5.3% in FY11/12 UOB KAYHIAN Securities says... IHH HEALTHCARE | HOLD | TP: S$1.42 Initiate coverage with a HOLD We value IHH at S$1.42, using a SOTP valuation model Aggressive capacity expansion to drive earnings Positioned to capture medical travelers Strong balance sheet CREDIT SUISSE Securities says... SINGAPORE EXCHANGE | OUTPERFORM | TP: S$9.25 We have left our forecasts unchanged following strong Feb 2013 market statistics for both equities and derivatives Equity markets (40% of revenues): February turnover was down 16% YoY due to very high base in Feb 2012 and Chinese New Year (2012 CNY in January) Derivative volumes maintained their strong growth trajectory; with volumes up +32% YoY in February 2012 Listings(10%): There were two new equity listings in the month, with bond listings still the main source of new fund raisings Catalysts:Market trading volumes, IPOs and subsequent capital raisings and success of new product launches Valuation unchanged at S$9.25, implying 25x 12-month forward earnings (around its eight-year average) OSK DMG Securities says... KINGSMEN CREATIVES | BUY | TP: S$0.93 Pipeline of projects will keep it busy Healthy prospects for the MICE industry in the region Strong growth and development of the Thematic & Scenic industry in Asia Continued proliferation of international brands into Asia Its current order book of SGD81m reflects a stronger pipeline of projects

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.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED

Research House: UBS

Price Call: HOLD

Target Price: 4.15

Stock Name: Yangzijiang
Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD

Research House: Credit Suisse

Price Call: HOLD

Target Price: 1.10

Market Compass

06 March 2013~ Good Morning Singapore!

Singapore Idea Snippets:

Global Flash: While You Were Sleeping Source: Marketwatch Quote for the day:Get your facts first, then you can distort them as you please - MARK TWAIN Singapore: The Day Ahead SINGAPORE DAYBOOK: MAS makes proposals to financial area review THE Monetary Authority of Singapore (MAS) has made additional recommendations in a consultation paper to complement those raised by the Financial Advisory Industry Review (Fair) earlier this year. The 14-member Fair panel released its report of 28 recommendations, aimed at raising the standards and quality of Singapore's financial advisory industry, on Jan 16. "MAS has reviewed the report and agrees in principle to the recommendations made by the Fair Panel," MAS said in a release yesterday, adding that its additional proposals will help with the implementation of those made by the panel. MARKET SCOOP STX OSV Holdings to be renamed VARD TTJ gets S$20m worth of contracts CapitaLand appoints J.P. Morgan to reassess Australand stake WE Hldgs gets nod to list S$6.18m placement shares STATS ChipPAC raises funds via US$255m in notes Tiger Airways to raise S$297m via rights, convertables UBS Securities says... KEPPEL LAND | NEUTRAL | TP: S$4.15 Improved macro outlook and business confidence factored in Underlying China demand to be impacted by the latest measures With a low gearing of 22%, Keppel Land has significant capacity to acquire in commercial and mixed developments We believe upside could come from more RNAV-accretive acquisitions as capital is deployed Raise price target from S$3.44 to S$4.15 Our price target is based on 0.85x RNAV CREDIT SUISSE Securities says... YANGZIJIANG | NEUTRAL | TP: S$1.10 While Yangzijiang has secured its first jackup rig order, management noted strong competition from other Chinese yards for further orders Overall, the company is targeting US$1.6-2.5 bn of new orders in 2013, consisting mainly of further contracts with Seaspan for 10,000 TEU containerships Given the expected decline in shipbuilding margins, the company intends to grow its supplementary revenue streams In addition, Yangzijiang will be working with Jiangsu Huaxicun to develop land at its old yard into a residential and commercial property We maintain our NEUTRAL rating and target price of S$1.10, based on valuing the shipbuilding business on 2013 P/E of 9x OSK DMG Securities says... HONG LEONG ASIA | SELL | TP: S$1.28 HLA reported 4Q12 net loss of SGD53m, compared with 4Q11's SGD18m profit The loss was mainly due to asset impairment and operating losses incurred by Xinfei (China white goods business) Yuchai recorded a 16% decline in diesel engines unit sales to 431k in 2012 Building materials unit (BMU) the most resilient We maintain SELL with target price of SGD1.28, which is derived from SOTP

MARKET PULSE: Oil & Gas Sector, Tiger Airways (6 Mar 2013)

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.33

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

Research House: OCBC

Price Call: BUY

Target Price: 0.86

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.68

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.84

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.86

MARKET PULSE: Oil & Gas Sector, Tiger Airways

6 Mar 2013

KEY IDEA Oil and Gas sector: Valuations still not stretched Similar to 3Q12, companies in the sector presented investors with 4Q12 earnings that were mostly in line, save for a few such as Ezra Holdings (below) and STX OSV (below). Stocks in the oil and gas sector have performed well YTD, especially the small to mid cap firms. However, we note that many are still trading at or slightly above mid-cycle valuations, suggesting that multiples are not overly stretched as long as the economic recovery remains intact. Recovering earnings, sustainable earnings growth and continued contract wins for a select few are expected to be the main drivers ahead. Though we have an OVERWEIGHT rating on the oil and gas sector, investors are advised to be selective. We favour companies with earnings growth or sustainability backed by a strong order book and a positive outlook for their industry sub-segment. As such, our preferred picks are Ezion Holdings [BUY, FV: S$2.33], ASL Marine [BUY, FV: S$0.86], Keppel Corporation [BUY, FV: S$12.68] and Sembcorp Marine [BUY, FV: S$5.84]. (Low Pei Han) MORE REPORTS Tiger Airways: Positioning for growth Tiger Airways (TGR) announced yesterday that it plans to raise S$297m through a renounceable one-for-five rights issue and a non-renounceable one-for-four preferential offering of perpetual convertible securities. Although this is nearly twice the amount raised in 2011, it is necessary for the group to maintain its operational push towards its goals and was not unexpected by the street. Looking beyond the short-term jitters in terms of its share price, we wish to highlight that TGR is still on track to close out the year on a positive note, and this revitalisation of its balance sheet will give it the flexibility it needs to nurture its existing ventures. With the weak macro-environment continuing to favour budget airlines such as TGR, we leave our forecasts unchanged. Reiterate BUY at an unchanged fair value estimate of S$0.86. (Lim Siyi)

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

NEWS HEADLINES - The Dow Jones rose 0.9% to clock a new high on Tuesday, surpassing levels reached more than five years ago, on indications of an improving US economy. - The Singapore government said it wants to raise the capabilities of Singaporeans as well as to calibrate the existing work pass framework. - Members of parliament said the Wage Credit Scheme may benefit larger multinational companies and government-linked firms more than the SMEs. - TTJ Holdings Limited said it had secured multiple projects totalling S$20m for the supply of structural steelworks and civil defence shelter doors in Singapore. - STATS ChipPAC said it will issue US$255m of 4.5% senior notes due 2018 in a private placement. - WE Holdings Ltd said it has received the nod from the SGX on 1 Mar to list and quote its S$6.2m placement shares on the Catalist board.

MARKET PULSE: Hospitality Sector, Starhill Global (5 Mar 2013)

Stock Name: GP Hotels
Company Name: GLOBAL PREMIUM HOTELS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.33

Stock Name: Starhill Gbl
Company Name: STARHILL GLOBAL REIT

Research House: OCBC

Price Call: BUY

Target Price: 0.98

MARKET PULSE: Hospitality Sector, Starhill Global

5 Mar 2013

KEY IDEA Hospitality Sector: Potential oversupply situation Summary: Despite visitor arrivals climbing 9% in 2012, the total gross lettings for Singapore hotels was stagnant at 10.7m room nights. It is likely that the average length of stay has declined further from the 3.7 days in 2011, e.g. down to 3.45 days, and larger proportions of tourists may be staying in non-hotel accommodations. We understand from talking to industry players that 1Q13 operational figures for Singapore hotels are likely to be lackluster. For 2013-2015, we forecast hotel room demand growth of 5.4% p.a., lower than the projected 5.8% p.a. increase in room supply. We remain NEUTRAL on the hospitality sector. Our top pick is Global Premium Hotels [BUY, FV: S$0.33], which we believe is a longer-term asset value play. GPH is currently trading 32% below its NAV of S$0.39. (Sarah Ong) MORE REPORTS Starhill Global REIT: Poised for growth Summary: We are positive on Starhill Global REIT's (SGREIT) performance going forward. SGREIT announced that the acquisition of Plaza Arcade in Perth, Australia has been completed last Friday. At an NPI yield of 7.8%, we expect the transaction to be DPU accretive, adding 0.08 S cent to SGREIT's DPU on an annualised basis. Apart from the maiden contribution by Plaza Arcade, SGREIT is also likely to get a boost in its 1Q13 DPU, due to the distribution of ~S$3.8m accumulated net rental arrears expected to be received from Toshin during the quarter. Further upside in rent is possible when next lease renewal exercise comes in Jun, given that Orchard Road rental and occupancy rates have been holding up well. In addition, SGREIT may possibly benefit from interest savings following the refinancing of its term loan maturing in Sep. We maintain BUY with an unchanged fair value of S$0.98 on SGREIT. (Kevin Tan)

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

NEWS HEADLINES - US stocks closed higher Monday after strength in defensive stocks shook off early morning losses following a measure to cool China's real-estate bubble. The Dow rose 0.3%. - The latest purchasing managers' index (PMI) showed that Singapore's manufacturing economy contracted in Feb from the previous month. - CSC Holdings said it had inked over S$400m worth of deals so far this year, including works on the Klang Valley Mass Rapid Transit in Malaysia. - BBR Holdings said it won S$61.6m in new contracts between last Nov and Jan this year. - China Minzhong Food Corporation said that PT Indofood Sukses Makmur has doubled its shareholding interests from 14.95% to 29.33%. - Independent directors of Macquarie International Infrastructure Fund asked shareholders to vote to amend the management fee arrangements at the AGM later this week. - The Public Transport Council has raised the penalty for not meeting bus Quality of Service (QOS) standards by up to 20x to show that it is serious about non-compliance.

Noble Group cut to Neutral from Buy: Citi

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED

Research House: Citigroup

Price Call: HOLD

Target Price: 1.28

Singapore listed Noble Group (N21.SG) has been cut to Neutral from Buy with its target price slashed to $1.28 a share vs $1.68 by Citi Research Equities due to weak earnings.

Noble Group on Thursday announced a 14% drop in its 4Q net profit to US$91.2 million ($113.5 million) vs US$105.7 million a year earlier due to a contraction in the company's operating income margins, with FY2012 net profit rising 9% to US$471.3 million.

“We reduce our rating on Noble to Neutral as its 2 sequential quarters of weak performance in agri lead us to lower our expectations on FY13E-14E ROE to 11-13%, close to what its stock price currently implies,” Citi says in its note.

Noble is currently down 1.7% at $1.1550 a share.

MARKET PULSE: Consumer Sector, Rotary Engineering (4 Mar 2013)

Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED

Research House: OCBC

Price Call: SELL

Target Price: 0.34

MARKET PULSE: Consumer Sector, Rotary Engineering

4 Mar 2013

KEY IDEA Consumer sector: Outperform STI in 2013? Summary: Companies included in the FTSE Straits Times Consumer Services Index showed continued improvement in the 4QCY12 earnings season with both top and bottom-line figures exceeding consensus estimates. Revenue was stronger than expected (+10.3% over forecasts) while a combination of cost-control initiatives and favourable input prices during the period saw average earnings per share beat consensus projections by 16.6%. In our view, this mirrors the growth in contribution from overseas markets - particularly EM-Asia - as domestic retail sales figures were tepid during the same period. In the coming months, we continue to favour counters with greater EM-Asia exposure but urge investor caution as the recent upward re-rating of the sector has led to some counters being priced ahead of fundamentals. As such, we also maintain our preference for counters with defensive qualities like Sheng Siong [BUY; FV: S$0.69]. Maintain NEUTRAL on the overall consumer sector. (Lim Siyi) MORE REPORTS Rotary Engineering Ltd: JV deficit remains unresolved Summary: Rotary Engineering Limited (Rotary) reported a second consecutive quarter of losses with 4Q12 net losses to shareholders of S$18.4m (3Q12: S$66m). Last quarter was marked by additional provisions made for its SATORP project and lower volume of work due to the late start of Fujairah Oil Terminal (FOT) project. FY12 revenue was down 16% to S$444m, while loss attributable to shareholders was S$80m, compared to profit of S$31m in the previous year. While the SATORP execution issues may be largely behind, the deficit at its JV remains unresolved. In a worst case scenario, Rotary - being the controlling shareholder - may need to take an impairment loss. Another concern is the tight labour market in Singapore, which represents about 50% of Rotary's order-book. Maintain SELL with an unchanged S$0.34 fair value estimate. (Chia Jiunyang)

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

NEWS HEADLINES - US markets rose on Friday as investors looked past the risks to the economy of impending federal spending cuts and bid up equities. The Dow was up 0.25%. - The total market capitalisation of SGX-listed companies fell 1.2% in Feb as the stock market took a breather after hitting a multi-year high in Jan. - Hotel room rates in Singapore climbed to a record high, coming in at an estimated S$261 for 2012 as a whole and making the city-state's average rate among the priciest in the region. - Shoebox units could benefit from the new tax policy which imposes a more progressive tax structure on residential homes, according to a report by Knight Frank. - Hong Leong Asia posted a net loss of S$34.9m for FY12, as compared to a net profit of S$83.3m a year ago. - Fu Yu Corporation has turned a profit for 4Q12 but it could be placed on the watch-list as this is the third consecutive year the group has recorded pre-tax loss. - Q&M Dental Group posted a S$5.0m profit for FY12, up 9.2%, on the back of stronger performance at its existing dental clinics, and contributions from new outlets.