SG: MARKET PULSE: A-REIT, Singapore Post, Cache Logistics (19 Mar 2013)

Stock Name: Ascendasreit
Company Name: ASCENDAS REAL ESTATE INV TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 2.60

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.23

Stock Name: CACHE
Company Name: CACHE LOGISTICS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.34

MARKET PULSE: A-REIT, Singapore Post, Cache Logistics

19 Mar 2013

KEY IDEA Ascendas REIT: Acquires property following placement Ascendas REIT (A-REIT) yesterday announced the proposed acquisition of The Galen at 61 Science Park Road for a purchase consideration of S$126.0m. The Galen is a six-storey multi-tenanted science park building located within Singapore Science Park II and has a NLA of 234,384 sqft. It is currently 97.5% occupied, with Ascendas Land and the REIT manager taking up c. 22.5% of the lease space. The property, we note, was first mentioned as a potential acquisition asset when it raised S$406.4m through a private placement of 160m new units on 8 Mar. According to A-REIT, the asset is expected to generate a NPI yield of 6.8% and add 0.052 S cents to its DPU on an annualised basis, assuming the acquisition is fully funded using the proceeds from the placement. This is in line with our initial assumptions made on the transaction. We maintain HOLD on A-REIT with an unchanged fair value of S$2.60. (Kevin Tan) MORE REPORTS Singapore Post: Awaiting news of larger acquisitions In recent months, Singapore Post (SingPost) has been acquiring stakes in companies to build its non-mail businesses - it completed the 100% acquisition of General Storage Company Pte Ltd (GSC) in end Jan for S$37m and the 62.5% acquisition of Famous Holdings Pte Ltd (FH) in end Feb this year for S$60m. We see synergies with the group's logistics and e-commerce businesses, but note that these acquisitions remain on a relatively small scale as we await news of larger acquisitions. Meanwhile, the stock has been trading in a range of S$1.18-S$1.23 since we downgraded it to HOLD on 28 Jan. We like SingPost's stable operating cash flows and consistent dividends, but see few re-rating catalysts for now. Maintain HOLD with S$1.23 fair value estimate. (Low Pei Han) Cache Logistics Trust: Private placement to fund acquisition Cache Logistics Trust (CACHE) has exercised the call option and entered into the S&P agreement with Precise Development Pte Ltd to acquire the fully ramp-up warehouse known as Precise Two last evening. Separately, CACHE is proposing to carry out a private placement of 70m new units to institutional and other investors at an issue price of S$1.24-S$1.265 apiece. About S$86.8m in gross proceeds are expected to be raised (based on S$1.24 issue price), of which 66.0% (~S$57.3m) will be used to wholly fund the proposed acquisition of Precise Two, while the balance will be deployed to fund future investments or pare down debt. We understand that the issue price will be determined by today. An advanced distribution of ~2.12 S cents per unit is also expected to be paid to entitled unitholders around 26 Apr. We are currently reviewing our estimates as we have previously anticipated the acquisition to be fully funded by debt. For now, we place our Buy rating and S$1.34 fair value under review. (Kevin Tan)

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

NEWS HEADLINES - US stocks on Monday fell for a second session as Europe's efforts to get a handle on a rescue of Cyprus provided enough uncertainty for a much-anticipated retreat on Wall Street. - Singapore's non-oil domestic exports fell 30.6% YoY last month, dragged down by a sharp drop in pharmaceuticals and oil rigs and continued weakness in electronics. - The Asian Development Bank has sounded a strong warning about the danger of "asset bubbles" developing in the region's local-currency bond markets. - S-REITs are exposing themselves to various risks as they rely more and more on debt financing, a trend that is likely to continue this year, according to Fitch Ratings. - Yongnam Holdings said it intends to diversify its business into the business of investing into infrastructural developments in addition to the group's current core business.

SG: MARKET PULSE: Astro Malaysia, CDLHT, SembMarine (18 Mar 2013)

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: HOLD

Target Price: 2.11

Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD

Research House: OCBC

Price Call: BUY

Target Price: 5.84

MARKET PULSE: Astro Malaysia, CDLHT, SembMarine

18 Mar 2013

KEY IDEA Astro - FY13 results mostly within expectations Summary: Astro Malaysia Holdings Berhad (Astro) reported FY13 revenue of MYR4265.0m, up 10.9%, and was 0.3% above our forecast. Although net profit fell 33.6% to MYR418.0m, weighed by higher operating cost including depreciation, it was 4.7% below our forecast. Hence the results were mostly within our forecast. Astro declared a third interim dividend of 1.5 MYR cents and a final dividend of 1.0 MYR cent, bringing the full-year post-IPO payout to 4.0 MYR cents. Going forward, management remains relatively upbeat about its prospects, citing the expected 5-6% growth in the Malaysian economy, a corresponding rise in income per capita and the share of entertainment expenditure. However, it notes that the B.yond conversion and aggressive customer acquisition will impact EBITDA in FY14; hence margin could remain around 32%. But once the swap out of the B.yond is completed in FY15, management expects to see EBITDA margins recovering back towards 36%. As such, we continue to maintain our BUY rating on the stock. Our DCF-based fair value improves slightly from MYR2.98 to MYR3.00. (Carey Wong) MORE REPORTS CDL Hospitality Trusts: Competition to increase Summary: We believe that CDLHT's Singapore hotels are best classified as being in the Mid-tier/Upscale range, because their FY12 RevPAR was S$211, close to the mean of S$264 and S$171, which are the RevPAR averages for Singapore Upscale and Mid-tier hotels respectively. As detailed in our hospitality sector report dated 5 Mar 2013, we project that for 2013-2015, the Economy, Mid-tier and Upscale/Luxury categories will grow +5.9% p.a., +8.5% p.a. and +4.4% p.a. respectively. As a group, the Mid-tier/Upscale/Luxury segment will grow 5.8% p.a., the same rate that the overall supply will grow. This rate is lower than the projected room demand of 5.4% p.a. over the same period, indicating that competition is likely to intensify in the segments that CDLHT is represented in. Adjusting our assumptions and removing the 10% discount to RNAV to better reflect the worth of CDLHT's hotel properties, we are raising our fair value from S$1.93 to S$2.11; but maintain a HOLD rating since CDLHT is trading near our fair value. (Sarah Ong) Sembcorp Marine: Good demand from Mexico; secures two more jack-ups Summary: Sembcorp Marine (SMM) announced this morning that its subsidiary, PPL Shipyard, has secured orders worth US$417m for the construction of two jack-up rigs from Mexican-based Integradora de Servicios Petroleros Oro Negro (Oro Negro). Scheduled for delivery at end-4Q14 and end-1Q15, the high-spec rigs will be built based on PPL's proprietary Pacific Class 400 design. Oro Negro is a repeat customer - it ordered two similar jack-up rigs from SMM in Dec last year at a price of US$217m per unit. The strong demand coming from Mexico is within our expectations, as PEMEX plans annual capital expenditures of ~US$30b till 2019 to stem the country's declining oil production. We see SMM as one of the beneficiaries of these developments. Maintain BUY with S$5.84 fair value estimate on SMM. (Low Pei Han)

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

NEWS HEADLINES - US stocks retreated on Friday, ending the longest advance by the Dow Jones in more than 16 years and containing the S&P 500 just as it neared its record close. - Popular Holdings' 3QFY13 net profit attributable to owners slipped 4% YoY to S$11.7m. Turnover also fell 8% to S$152.8m. - Boustead Singapore said it will enter the solar power market in Japan with the acquisition of shares in an industry player for S$73k. - Singapore Airlines said its Feb passenger load factor grew to 78.2% from 76.1% in Feb 2012. Systemwide, passenger traffic grew 5.1%, while capacity grew by 2.4%. - Retail sales fell 2% YoY in Jan 2013, partially cushioned by stronger sales of motor vehicles. Excluding motor vehicles, retail sales slipped a steeper 4.9%.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: Nam Cheong
Company Name: NAM CHEONG LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 0.34

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: CIMB

Price Call: BUY

Target Price: 1.45

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.595

Market Compass

18 March 2013~ Good Morning Singapore!

Singapore Idea Snippets:

18 March 2013~ Good Morning Singapore! Central Execution Team - Trading For A Living 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 : He who is not courageous enough to take risks will accomplish nothing in life. -MUHAMMAD ALI Singapore: The Day Ahead SINGAPORE DAYBOOK : S'pore M&A slow to rouse after 2012's party [SINGAPORE] Singapore merger and acquisition (M&A) activity had its slowest start in four years as announced deal volumes fell 13.5 per cent year-on-year in the first quarter of 2013, according to preliminary data compiled by Thomson Reuters. Total announced deal volume for transactions involving Singapore-based parties was US$6.4 billion (S$8 billion) year-to-date, compared with US$7.4 billion (S$9.3 billion) in the first quarter of 2012. This was the weakest first quarter since 2009's US$2.4 billion (S$3 billion) start. Coming off a record 2012 in which mega deals such as the takeover of Fraser and Neave dominated headlines, the sluggish tone so far this year has been especially stark. MARKET SCOOP SingTel to review Optus satellite business SembMarine gets US$417m order for two rigs S'pore Feb NODX down 30.6% y-o-y Reits with more offshore assets set to be listed here Tender for JTC wastewater treatment plantlaunched Urban Vista 43% sold after launch weekend UOB KAY HIAN Securities says... NAM CHEONG | BUY | TP: S$0.34 We see Nam Cheong as a key beneficiary of a recent pick-up in Malaysian offshore activity, being the largest Malaysian OSV shipyard with 50-75% domestic market share OSV tendering activity is expected to pick up on the back of Petronas' 34 vessel requirements in 2013, coupled with about 30 additional vessels required for the Pan Malaysian Hook-Up and Commissioning project Nam Cheong is scheduled to deliver 25 build-to-stock vessels in 2014, worth a total of US$520m Nam Cheong has utilised about half of the S$160m raised from its recent share placement and medium-term note (MTN) issuance More vessel sales due to a larger 2014 shipbuilding programme Maintain BUY and target price of S$0.34, implying a 36% price upside, based on 9.7x 2014F PE (2014F EPS: 8.8 sen or 3.5 S cents) CIMB Securities says... EZRA HOLDINGS | OUTPERFORM | TP: S$1.45 Ezra is making its name in the Norwegian North Sea with the recent order wins from Det norske oljeselkap and Statoil Its current share price, which is at a six-month low, provides good buying opportunities Contracts won since Sep 12 totalled about US$685m, in line with our US$900m target for FY13 We think Ezra is making good albeit slow progress in the subsea world with its US$1bn order book Our target price is also intact, still pegged at 12x CY14 P/E (5-year mean of small/mid-cap industrials) Catalysts could come from a stronger 2H13 and more order wins OCBC Securities says... MIDAS HOLDINGS | BUY | TP: S$0.595 We view news of China's Ministry of Railways' (MOR) dissolution and subsequent restructuring as a mid-to-long term positive for the railway sector However this reform may result in some near-term uncertainties over the timeline of new high-speed railway (HSR) contract tenders Midas recently secured a total of CNY109.6m worth of contracts to supply aluminium alloy extrusion and fabricated parts to five metro projects in China While there is still a lack of clarity on when the resumption of HSR contract tenders would materialise, we expect management to continue its negotiation process for more contracts from the metro/subway, international rail transport, power and industrial machinery industries to act as a near-term buffer Reiterate BUY and S$0.595 fair value estimate on Midas (1.2x FY13F P/B), which implies total potential returns of 16.5%

SG: MARKET PULSE: STX OSV, Midas, Ezra (15 Mar 2013)

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.52

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.595

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.30

MARKET PULSE: STX OSV, Midas, Ezra

15 Mar 2013

KEY IDEA STX OSV: What's next after offer closing? At the close of its mandatory offer for STX OSV shares on 13 Mar 2013, Fincantieri received only 4.88% valid acceptances, bringing its total shareholdings to 55.63% (pre-offer: 50.75%). The low acceptance level is unsurprising given that the Board of Directors has recommended shareholders to reject Fincantieri's offer as it is not compelling enough. Looking ahead, we believe there will be better clarity in terms of corporate identity, board leadership and senior management. Fincantieri has also stated that it has no intention to (i) introduce any major changes to STX OSV, (ii) re-deploy the fixed assets or (iii) discontinue the employment of its employees. Maintain BUY with unchanged S$1.52 fair value estimate. (Chia Jiunyang) MORE REPORTS Midas Holdings: Seeking to grow its order book We view China's latest railway reforms as a mid-to-long term positive for the sector, which would likely benefit industry suppliers such as Midas Holdings (Midas). While we are cognisant that there may be some near-term uncertainties over the timeline of new high-speed railway (HSR) contract tenders, we note that the Chinese government has reaffirmed its railway investment targets for 2013. Its 12thFive-Year Plan for the sector also remains unchanged. Meanwhile, Midas recently won CNY109.6m worth of metro contracts in China. We expect management to continue its drive to secure more orders from the metro/subway, international rail transport, power and industrial machinery industries to act as a near-term buffer for the lack of clarity on when the resumption of HSR contract tenders would materialise. Reiterate BUY and S$0.595 fair value estimate on Midas, still pegged to 1.2x FY13F P/B. (Wong Teck Ching Andy) Ezra Holdings: Wins two contracts for the Norwegian sea Ezra Holdings (Ezra) announced that its subsea services division, EMAS AMC, has won an engineering, procurement, construction and installation (EPCI) contract valued at about US$165 million from Det norske oljeselskap ASA. This is the same customer that awarded Sembcorp Marine a S$900m EPC contract for an offshore platform topside in Feb this year. Ezra will undertake rigid pipe-lay and related subsea work, in the Ivar Aasen field in the Norwegian North Sea. Project management and engineering work will start immediately with offshore activities in 2015. Meanwhile EMAS AMC has also won a contract (value undisclosed) from Statoil for the transport and installation of subsea templates for the Aasta Hansteen field in the Norwegian Sea. Offshore transport and installation will take place in 2015. Pending more details on the second contract, we maintain our HOLD rating and fair value estimate of S$1.30 on Ezra. (Low Pei Han)

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

NEWS HEADLINES - Sunright Limited posted a net loss of S$3.39m for the half year ended Jan 31, 2013, compared to net profit of S$1.37m a year ago. - Lonza Group Ltd is looking to raise CHF300m (S$395m) via a six-year straight bond issue with an annual 1.75% coupon rate. - Koyo International Ltd announced that it has won two mechanical and electrical engineering contracts worth S$23.7m. - National Development Minister Khaw Boon Wan said that restrictions on public housing that could make HDB flats more affordable in the future would only apply to new buyers, not existing flat owners. - The government will stop tightening the foreign workers supply only if three goals are met: foreign presence in the labour pool is capped at around a third; productivity grows 2-3% a year; and when Singaporeans' wages improve. - China's Parliament formally elected Xi Jinping as its new president yesterday, completing the country's second orderly political succession since the Communist Party took power in 1949.

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: SATS
Company Name: SATS LTD.

Research House: UOB KayHian

Price Call: HOLD

Target Price: 3.13

Market Compass

15 March 2013~ Good Morning Singapore!

Singapore Idea Snippets:

15 March 2013~ Good Morning Singapore! Central Execution Team - Trading For A Living 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 : Be as smart as you can, but remember that it is always better to be wise than to be smart. -ALAN ALDA Singapore: The Day Ahead SINGAPORE DAYBOOK:Samsung Galaxy S4 emerges to do battle on Apple's home turf NEW YORK - Samsung Electronics Co on Thursday premiered its latest flagship phone, the Galaxy S4, which sports a bigger display and unconventional features such as gesture controls and will spearhead its effort to challenge Apple Inc on its home turf. The phone is the first in Samsung's highly successful Galaxy S-series to make its global debut on US soil, and represents another bet that consumers prefer larger screens. The S4 - which Samsung preceded with a marketing blitz that drummed up industry speculation reminiscent of some of Apple's past launches - will be available globally in the second quarter. Samsung said all major US service providers will sell the phone but it kept mum on exact dates and prices. MARKET SCOOP Sunright posts S$3.39m H1 loss Ezra subsea arm clinches US$165m contract Noble prices US$400m notes at 3.6% First REIT proposes S$500m multicurrency MTN programme STX OSV to stay listed on SGX Koyo wins 2 M&E contacts worth S$23.7m CNA inks MOA with Thai property developer MAYBANK KIM ENG Securities says... CAPITALAND | BUY | TP: S$4.30 Since CapitaLand reported its FY12 results, residential property policy concerns in both Singapore and China have affected its market value With new home prices in China showing stronger-than-expected appreciation in January, the government is widely expected to introduce more measures in the coming months to rein in prices We believe that such measures, when implemented, may decelerate home sales, but unlikely to materially impact CapitaLand's profitability on their China residential projects Its retail business under CapitaMalls Asia (CMA SP) is gathering momentum, and is likely to underpin the medium term growth for CapitaLand in China The divestment of CapitaLand's 59% stake in Australand remains on the cards as fellow Australian developers GPT and Mirvac continue to be touted as interested parties With potential cash proceeds of SGD1.6b, the payout of a special dividend is quite possible We are nonetheless of the opinion that the recent pullback offers an attractive entry-level for investors with a medium-term view CIMB Securities says... IHH HEALTHCARE | OUTPERFORM | TP: S$1.53 IHH is adding Hong Kong to its extensive global network. We are not surprised by its winning bid to acquire a site on which it will construct, develop and operate a private hospital in Hong Kong IHH will own 60% of the project while NWS Holdings will hold the other 40% The estimated capital investment of approximately HK$5bn (RM2bn),which includes land cost of HK$1.7bn (RM675.4m),will be financed by internal funds and bank borrowings, the breakdown of which has yet to be determined We have often mentioned that this news is a stock catalyst and is consistent with the growth trajectory IHH is charting Other potential catalysts are the ramp-up of Novena Hospital's operations and revenue intensity in all its three markets UOB KAY HIAN Securities says... SATS | HOLD | TP: S$3.13 Fast on the heels of a new partnership announcement, SATS appointed a new CEO, Mr Hungate, who is currently the CEO of HSBC Singapore Sports Catering Services (SCS) has won a contract from the Singapore Sports Hub to provide catering and food and beverage services for 50 retail concessions, 62 corporate suites, members' dining areas, MICE and special events across five venues SCS is a 70:30 JV between SATS and Delaware North Companies (Delaware), which in turn is a hospitality and food service provider at more than 70 sports and entertainment stadia in the US, Australia and the UK Operations will commence in Apr 14. The contract tenure is for 21 years, with expected revenue of approximately S$50m annually in its steady state of operations The new contract will further enable SATS to diversify from the aviation-related food solutions business We upgrade SATS to HOLD and raise our target price to S$3.13 after raising our long-term ROE (13.8% vs 12% previous). The rationale for a higher sustainable ROE is based on the assumption that SATS is likely to gear up to fund any potential M&A

OSPL - Good Morning S'pore - Central Dealing Desk

Stock Name: HL Fin
Company Name: HONG LEONG FINANCE LIMITED

Research House: UOB KayHian

Price Call: HOLD

Target Price: 2.67

Market Compass

14 March 2013~ Good Morning Singapore!

Singapore Idea Snippets:

14 March 2013~ Good Morning Singapore! Central Execution Team - Trading For A Living 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 : Give me six hours to chop down a tree and I will spend the first four sharpening the axe - ABRAHAM LINCOLN Singapore: The Day Ahead SINGAPORE DAYBOOK:Spanish firm Repsol open to board seat for Temasek. It would also let the S'pore investment firm to have a say on board nominees. [SINGAPORE] Spanish oil and gas company Repsol would be open to giving Temasek Holdings say on director nominations to reflect the sovereign investment firm's enlarged stake, Repsol chairman and chief executive Antonio Brufau said. "Formally they haven't asked for that, but obviously they will be entitled," Mr Brufau told The Business Times. "They have a 6.3 per cent stake today, therefore with this stake they have the right to have a board member." Temasek gives Repsol the support of a prestigious, long-term investor as the company writes a new chapter of corporate history that emphasises diversified upstream exploration, said Mr Brufau, who was in Singapore to meet Temasek's directors. MARKET SCOOP Drastic slump in COE premiums for big cars IHH buys HK plot for S$271.07m to build hospital Datapulse Tech Q2 net profit falls 12.8% S'pore Feb bunker sales fall to 3-year low IEA cuts global oil demand forecasts UOB KAY HIAN Securities says... HONG LEONG FINANCE | HOLD | TP: S$2.67 Changes in the finance services industry with the advent of floating-rate housing loans and a low interest rate environment have resulted in lower margins Cooling measures for private residential properties and curbs on car loans create further obstacles for HLF Management intends to focus on housing loans for HDB flats and will place less emphasis on the private residential property market Adopts a selective approach for loans to residential developers, financing only those with good track record. It provides loans for the acquisition of landbank and subsequent construction phase as well Growth prospect for car loans has diminished after the curb on loan-to-value ratio and tenure of car loans was introduced in Feb 13 We value HLF at S$2.67, based on a P/B of 0.7x derived from the Gordon Growth Model (ROE: 5.5%, required return: 7.2% and constant growth: 1.5%) CIMB Securities says... MIDAS HOLDINGS | OUTPERFORM | TP: S$0.58 The five contracts totalling Rmb109.6m that Midas has just announced are small but significant wins as they reflect Midas's ability to sustain its order book with metro contracts The outlook for China's railway industry is also becoming more favourable given an increase in planned railway FAI The proposed reform of the Ministry of Railway should help alleviate financing woes in the industry The latest contracts take Midas's existing order book to Rmb509.6m, with earnings visibility of up to three years We advise investors to position early to capture potential alpha from HSR contract announcements Maintain Outperform and target price based on 17.3x CY14 EPS, a 10% discount to the 5-year average forward P/E OCBC Securities says... KEPPEL CORPORATION | BUY | TP: S$12.68 Keppel Corporation (KEP) announced that the conditional contract between Keppel FELS Ltd and Ukraine's Naftogaz to construct two semisubmersible drilling rigs will not be taking effect Though the US$1.2b worth of contract was inked in Dec last year, it was also mentioned earlier that the contract will only be effective if certain conditions were met We do not view this as a cancellation of order, and we note that the contract amount was also not part of Keppel's announced net order book of S$12.8b as at 31 Dec 2012 Though there may be a negative knee jerk reaction with this news, we maintain our BUY rating with S$12.68 fair value estimate and a forecasted dividend yield of 3.7% over a one-year time frame

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

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

Research House: OCBC

Price Call: BUY

Target Price: 1.75

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD

Research House: OCBC

Price Call: HOLD

Target Price: 3.01

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.52

MARKET PULSE: Tat Hong, Raffles Medical, STX OSV

14 Mar 2013

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

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

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