Yongnam

Yongnam: DBSV upgrades to Buy from Hold as it believes Yongnam's consortium is a strong contender for Myanmar's airport projects. 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. A win on the Yangon airport project could boost the share price by $0.12, it says. DBS estimates that the construction of the Yangon Airport project could add $10.4m or $0.06 per share to FY14 forecast earnings. Thereafter, the rights to operate the airport for the next 30 years would add another $0.06 to the stock based on discounted cashflow projection, it says; Yongnam's current valuations are only in line with peers, and not reflecting Yongnam as a strong contender for project wins in Myanmar. House convinced Yongnam stands a good winning chance and thus believe +1 (standard deviation) valuation is achievable.The house has an upwardly revised $0.41 target on the stock.