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ST Engrg

2012-02-17T14:02:00.001+08:00

ST Engrg: Announced its land systems arm ST Kinetics has bagged a US$46m defence export order to supply its patented 120mm Super Raid Advanced Mortar System (SRAMS) to an unidentified overseas customer. The 120mm SRAMS is the first mortar system in the world with a recoil force of less than 20 tonnes when firing at maximum charge. Weighing only 1,200kg, it can be mounted on a variety of platforms. Delivery is expected to be completed by 2014. In Feb 08, ST Kinetics was also awarded a $45m contract to supply the SRAMS to a Mid-East customer.

The share currently trades at forward P/E of 17x, which lies in the mid-range of its 12-24x historical valuation range and offers an attractive dividend yield of 5.2%. The street has 9 Buys, 5 Holds and 2 Sell calls on this stock with a consensus price target of $3.13.

Sembcorp Marine

2012-02-17T09:41:00.001+08:00

Sembcorp Marine: CIMB maintains O/p with $6.28 TP. Note that Weaker-than-peers’ order pace in 2011 could have been a blessing in disguise as SMM’s yard now welcomes fast-track projects with high
margins and contract values for 2012/13 deliveries. 2012 is set to be a blockbuster year as yard orders top S1.2bn YTD.

Mewah

2012-02-17T09:40:00.002+08:00

Mewah: CIMB has Technical Sell Call. Note that prices have hit 38% Fibonacci target of $0.63 after breaking out of the triangle pattern. However, the technical landscape does not look so appealing anymore at current levels. There is bearish divergence on its RSI and its MACD is losing momentum. Furthermore, price tested the upper channel and reversed, forming a graveyard doji pattern.

Think it is time to take profits now. Aggressive sellers may even choose to sell now with a stop placed above S$0.66. Believe the upside is likely limited to the S$0.695-0.73 gap while expect prices to fall towards $0.57 at the minimum but it is more likely to fall back to $0.51, its 50-day SMA.

Combine Will

2012-02-17T09:40:00.001+08:00

Combine Will: CIMB features Combine Will for the day. Note that If we could be looking at a DPS of S$0.10 for FY11. At $0.80, that would equate to a 12.5% yield. BVPS at 9M11 was $2.88 or a historical P/BV of 0.27x. If assume that Co. breaks even in 4Q11, the Company will be trading at a historical 4.2x P/E.

On the charts, prices have fallen to a key support level from the December 2010 higher and appears to be forming a base right at the support band of S$0.64-0.80. With its weekly technical indicators now in an up mode, there could possibly be a rebound on the cards. The oversold RSI may also prompt a quick upward correction in prices.

Roxy-Pac

2012-02-17T09:39:00.001+08:00

Roxy-Pac: 4Q rev at $42.1m -11.4% yoy -5.2% qoq. Net profit at $11.4m -5.0% yoy -14.6% qoq. Fall in rev due to lack of contributions from completed projects The Ambrosia and The Florentine. Co continues to recognise rev from 7 dev projects in 4Q2011 and property dev made up approx 70% of all rev. Rev from hotel ownership increased 7% yoy to $12.3m with occupancy rate at 96.1% (9M2011, 94.1%) and RevPar of $180.9 (9M2011, $155.9). Property Invt segment saw a dip of 1% due to redev of Kovan Centre

Kovan Centre will be demolished and re-constructed as Space@Kovan which has been fully sold with value of approx $160m

Co has declared a div of 2.0c compared to 1.5c previously

SATS

2012-02-17T09:37:00.003+08:00

SATS: Has signed a new JV agreement with Eastern Air Catering Invt, China Southern Airlines Co and Capital Airports Holding Co for Beijing Airport ground services (BGS) and inflight kitchen (BAIK). Both JVs, BGS and BAIK have a 20 yr operating term which expires in 2014 and 2013 respectively with SATS currently having a 40% ownershipe and Capital Airports with the remaining 60%. The new agreement will include new JV partners (Eastern Air 30% stake, China Southern 30%) and dilute SATS' stake to 28% with remaining 12% held by Capital Airports.

This renewal agreement essentially also dilutes SATS earnings from Beijing but at least ensures income continuity. The Chinese govt has a majority stake in China Eastern (subsi of Eastern Air Catering). SATS is trading at expected yield of 4.5% with fwd P/E 16.2x

Lippo Malls Indo REIT

2012-02-17T09:37:00.001+08:00

Lippo Malls Indo REIT: Reported $24.6m of NPI for 4Q11, +16.8% jump over the corresponding qtr in 4Q10. As the two new assets came into the Trust from Dec11, the full financial impact of these new assets will only flow through from 1Q2012 onwards.

On the back of a strong 4Q2011 performance, Trust recorded $92.0m in gross rev and NPI for FY11. Correspondingly, DPU (post-rights) for FY2011 was 3.85c. On an annualised basis, the latest distribution represents an adjusted average DPU yield of approximately 7.5% for FY11.

Sembcorp Marine

2012-02-17T09:26:00.001+08:00

Sembcorp Marine: Could see positive sentiment, after Co. announced this morning that it has announced a new order worth US$213m for a jack-up rig for customer Safin Gulf. The rig is due for delivery in Nov12, which is a relatively short time of less than a yr, (typically jack-up built from scratch takes around two years)

Kim Eng suspect that the rig may have been pre-built by SMM, hence the faster lead time and a significant premium pricing. Previously, the same class of rig sold for US$192m. While waiting further updates from Co, contract win itself is positive for SMM, and news could propel share price higher.

Ytd grp has already secured contracts of $1.26b vs $3.9b for FY11, and if momentum continues, we do not rule out that FY12 could be the yr for SMM, which a few houses have already been tipping since the start of the yr.

Kim Eng maintains Buy recommendation with $5.58 TP.

Silverlake

2012-02-17T09:25:00.000+08:00

Silverlake: DBSV REINITIATE coverage with Buy Call and $0.35 TP. House expect ample orders to drive earnings for next 3 yrs while large recurring revenue lends resilience. Recent acquisitions will help to grow non-banking business. Current valuation at -1SD is undemanding.

Overall, reinstate with BUY for potential upside of 30% & 4% yield. Potential catalysts will be big order wins in Malaysia and IPO of Chinese associate

SG Market

2012-02-17T09:20:00.001+08:00

SG Market: The gravy train seems set to continue for a little while more following Wall Street's smart rebound to its highest levels since 2008 on robust US economic data and signs of progress towards a second bailout for Greece. The STI appears set for another run up towards the key 3000 resistance after getting knocked off its perch yday. But traders will also be watching Spore's budget announcement today for further upside cues. SembMarine may get a boost after landing a US$231m contract to build a jack-up rig for an Austrian company. Peer KS Energy may also rise after securing a $15m rig-building equipment supply contract.

China Sky

2012-02-16T15:16:00.000+08:00

China Sky: In the continuing saga, the MAS has reported potential breaches of China Sky to the Commercial Affairs Dept following a report from the Spore Exchange on China Sky and its directors' alleged breaches of the Securities and Futures Act. The CAD is currently investigating the matter.

Noble

2012-02-16T14:28:00.001+08:00

Noble: Goldman Sachs downgrades to Neutral from Buy, with $1.60 TP. Believe the market has factored in a 4Q11 earnings rebound (absent one-off losses in 3Q11 from cotton defaults and carbon credit write-downs) and the appointment of Yusuf Alireza as its new CEO (which has improved investor confidence).

Note that Noble's 10-year bond yields have narrowed about 2.25 ppt from their peak to trade closer to levels before the 3Q11 results. Expects Noble's structural vol growth trend to continue, with 2010-13 three-yr vol CAGR of 13% on industry consolidation and the company's supply-chain investments. But adds that 2012's difficult trading conditions may pressure margins, citing possible pressure on soybean crush margins and weakening thermal coal prices.

Dukang Distillers

2012-02-16T09:33:00.001+08:00

Dukang Distillers: CIMB has Technical Buy Call. House note that after the completion of a 5-wave move down from S$0.935 to S$0.35, believe that the stock is now undergoing a corrective rebound. This rebound has only just begun and still has got legs despite yesterday’s move above its moving averages.

Technical landscape also looks appealing with both its MACD and RSI sporting bullish divergences. The RSI has also hooked up sharply, which suggests that there was a boost in buying momentum. Yesterday’s spike in trading volume enhances view that prices are likely at the beginning of a new run i.e. its corrective rebound.

Aggressive buyers should get in to buy now as the downside risk is very low at the moment. Keep a stop placed below the recent low of $0.35. One can also place their stop below $0.38. Expect prices to rally towards the strong resistance band of $0.535-0.62. Its 38%.

HPH Trust

2012-02-16T09:23:00.001+08:00

HPH Trust: According to MOC, total container throughput at the eight major ports in China grew by only +1.1% in January. Pearl River Delta (In where HPH Trust Operates) was the worst performing, declining -2.7% yoy, followed by the Yangtze River Delta region with a mild increase of +1.7%, whereas the Bohai Rim saw the highest throughput growth of +5.4%.

The Pearl River Delta region saw a mere increase of +0.1% yoy. Yantian Port decreased by -5.7% yoy, whereas Jinjiang slowed significantly by -41.6% yoy. Guangzhou was up +27.9% yoy.

Olam

2012-02-16T09:12:00.001+08:00

Olam: UBS maintains Buy and note that Food segment continues to be defensive and earnings growth continued to be driven by the Food segments, with H1 net contribution from Food growing 32% yoy on back of higher sales (+18%) and net contribution per tonne margins (+12%).

On the other hand, while sales increased 7% for Industrial raw materials, net contribution declined 24% as margins went down by 29%. The results highlight the defensive nature of Olam’s overall business, with the cyclical Industrial raw materials division (cotton, timber) accounting for less than 25% of earnings.

Olam remains as house top pick among Singapore traders. Reiterate our view that Olam should continue to deliver robust earnings growth higher than its peers, in the current volatile environment.

Sakari

2012-02-16T09:11:00.003+08:00

Sakari: UBS reiterate Buy Call with $3.70 TP. House note that results was way ahead of estimates. Note that Sakari Resources is house top pick and reiterate preference for miners with strong vol growth, based on view that coal prices from last year could roll over to 2012, resulting in earnings growth being driven by volumes rather than prices.

Like Sakari as 1) volume growth should exceed that of the sector, even though Management’s current 2012 Jembayan production guidance is lower than our initial estimate, and 2) production growth should be driven by the high-quality low-cost coal from Sebuku, which would increase average selling prices while bringing cash costs down further.

Ezion

2012-02-16T09:11:00.001+08:00

Ezion: UOB kay Hian while Maintaining BUY, note that grp’s share price has had a sharp run-up in the last few wks and could see some correction in the near future. House TP of $0.95 is based on 8x 2012F PE. This is at a discount to the long-term (since 2004) 1-year forward PE mean of 9.5x of the offshore support vessel owners segment.

Add that at a long-term 1-year forward mean valuation of 9.5x 2012 PE, house fair value for Ezion would be $1.24. Overall, maintains fundamental BUY call on Ezion, but suggest entry after a share price correction in view of its recent sharp run-up. TP of $0.95 is pending an upgrade.

Ramba

2012-02-16T09:10:00.003+08:00

Ramba: Awarded a tender from PT Chandra Asri to provide logistics services in Indonesia. The initial contract is for a period of three years with the option to extend for an extra 2 years, giving it an estimated value between US$12 and US$16m per yr. In addition to managing 4 warehouses with approx 700k sf of capacity, RichLand will also provide transportation services for CAP through hauling approximately 800k tons of polypropylene and polyethylene to end customer facilities throughout Java.

Wilmar

2012-02-16T09:10:00.001+08:00

Wilmar: To set up JV with Glowland Limited, 80% owned subsidiary of PPB Group Berhad. The JV will be called VFM-Wilmar Flour Mills Co Ltd and will carry out the business of wheat flour milling and the sale of flour, flour-based products and by-products. Wilmar will own 49% and Glowland, 51% of VFM-Wilmar. Wilmar will pay US$5.0m for its equity stake and US$12.5m in capex, through internal funds or borrowings.

Koh Bros

2012-02-16T09:09:00.002+08:00

Koh Bros: 4Q rev at $66.9m -32.2% yoy -43.2% qoq with net profit at $1.3m -33.8% yoy -90.2% qoq although FY11 net profit at $19.9m was +80.2% yoy. The fall in rev was due to lower progress sales recognition by the construction and building material division and a higher base in 3Q11. Gross margins also fell to 6.9% against last quarter’s 19.1%, co has a gross margin of above 10% in prev quarters.

Co has declared div of 0.35c per share. FY11 EPS of 4.19c per share approx 4.8x trailing P/E.

Hiap Hoe

2012-02-16T09:09:00.001+08:00

Hiap Hoe: Announced 4Q11 results which saw a weaker bottom-line, on back of rising costs from construction activities. Rev at $38.1m, +39.6% yoy and flat qoq, while net profit at $13m, -21.1% yoy and -18.8% qoq. Result brings FY11 rev to $136.4m, +28% yoy and net profit to $47.4m, +36.9% yoy. Gross margins fell significantly for FY11 at 34% vs 46.6% yoy.

Higher topline driven by progressive rev recognition from the sale of residential projects, Signature at Lewis, Skyline 360O and Waterscape at Cavenagh which amounted to $29.5m in 4Q11 vs $25.3m in 4Q10. Progressive rev recognition from construction of two JV dev, The Beverly, and the integrated hotel/commercial development on Balestier Road/Ah Hood Road, contributed $8.5m to 4Q11 rev vs $2.0 in 4Q10.

Going forward, grp remains cautiously optimistic on outlook. Note that property cooling measures that took effect in Dec11 has impacted sales of new private homes, which fell by 62.9% mom. For 2012, Grp expects to launch Skyline 360O and Treasure on Balmoral upon receipt of the TOP in 2H12. Amidst uncertainties and possible changes in government policies, will remain mindful of effect of current cooling measures, and be prudent in its review of both its ppty sales and land acquisition programmes.

Overall net gearing remains a tad high with net gearing at 95.2%, while at current price, grp trades at just 4.4x P/E.

SIA

2012-02-16T09:08:00.002+08:00

SIA: Operating results for Jan. Cargo traffic fell sharply.

For Jan 2012, carriage grew 2.4% yoy while capacity grew by 3.8%. Carriage growth slowed slightly from Dec’s +3.2% though still an improvement. As a result, passenger load factor declined 1.1% points to 77.0%. The number of passengers carried increased by 1.7% over the same period the previous year.Except for Americas and Europe, PLF generally weakened due to capacity increases. PLF declined in the West Asia and Africa region due to softer demand.

SilkAir’s carriage increased 13.2% yoy against 13.7% growth in capacity. As a result, PLF declined by 0.3% points to 76.2%. PLF on West Asia routes declined as traffic lagged capacity increases. The PLF on East Asia routes increased by 1.0% point, due to increased demand over the Lunar New Year
period.

Cargo traffic was 12.8% lower yoy while cargo capacity decreased by 8.5%. Compared to last mth numbers, traffic had a steep fall against a 1.5% increase in Dec. Load factor in Jan 2012 decreased by 2.9% points. All regions were affected by the seasonal slowing of airfreight activities due to the Lunar New Year holidays which was in Jan this year compared to Feb in 2011.

OKP

2012-02-16T09:08:00.001+08:00

OKP: Announced 4Q11 results which saw bottom-line exceeded estimates, with rev at $23.2m, -22% yoy and -9% qoq, while net profit at $9.5m, +105% yoy and +93.9% qoq. Gross margins surged at 65% vs 34% yoy. Result brings FY11 rev to $109.8m, -22% yoy and net profit at $26.6m, +57% yoy.

Decrease in rev was due mainly to the higher degree of completion of existing projects, coupled with a lower percentage of rev recognised from a few newly-awarded projects, gross margins however surged due mainly to cost savings in certain design-and-build construction projects, which yielded higher gross profit margins, and better project mgt and tighter cost controls.

Going forward, grp remains positive on outlook, based on the fairly healthy outlook of the construction industry over the next three yrs, however, with the expected slowdown in the economy, grp anticipate that the competition will become more intense.

Cite further that Ministry of Trade and Industry has projected a lower overall GDP growth of between 1 and 3% for 2012, although BCA expects the overall construction demand to remain strong at between $21b and $27b for 2012. Public sector construction demand is expected to contribute between $13b and $15b worth of construction orders.

A few road-related projects is also likely to be awarded in 2012 include the expansion of KPE/ TPE Interchange; the extension and reconstruction of Newton Flyover; and the construction of the New Lornie Road. Meanwhile, PUB would spend $750m over the next five years on 20 drainage projects.

We note that overall, grp’s fundamentals remain strong with a net cash position of $91.4m, or $0.3/share. Grp’s orderbook at $248.6m, underpinning earnings visibility till 2013. Grp is proposing a final div of 2c/share , bring FY11 div to 3c/share of a 4.6% yield. At current price, grp trades at 7.3x P/E, and 3.9x Ex-Cash P/E.

Ratings as follow:
CIMB maintains Buy with $0.97 TP.

SG Market

2012-02-16T09:03:00.000+08:00

SG Market: The STI's long-sought perch over 3000 may be shaky, with shares likely to fall, tracking weakness on Wall Street amid fresh Greece concerns. News that EU finance ministers might delay parts or all of a second bailout until after a Greek election in Apr is expected to weigh on risk sentiment, even if few knew how to clearly read the situation. But data showing Spore's 4Q GDP contracted less than originally estimated may provide support. First support is likely at 3000 followed by 2950.

Data showing January private-home sales nearly tripled in Jan from Dec will put property plays in focus. Singapore Airlines may face some pressure after January load factors showed significant weakness in cargo traffic. Commodity stocks may also be in play with firmer oil prices due to cutback in Iranian shipments to Europe. OKP reported splendid results but the same cannot be said for Hiap Hoe and Koh Bros.

Yoma

2012-02-15T14:01:00.000+08:00

Yoma is losing some steam after clarifying that the $91m they paid to acquire economic interests in the Star City project in Myanmar pertains to land developments rights, and NOT land rights; ie Yoma only the rights to develop the land, not ownership. From our understanding, Yoma will still have to pay for the land. And according to Myanmar law, it is not possible for foreign owned entities to own land without a permit from the Myanmar Investment Commission.

This raises 4 key questions for investors 1) How much does Yoma need to fork out for the land, 2) Does Yoma have the financial resources to pay for the land and development cost of the massive project 3) What is the time frame to develop the land as all rights have an expiry date and 4) What happens to the $91m if Yoma is unable to buy over the land?

Sakari

2012-02-15T12:40:00.000+08:00

Sakari: DBSV upgrades to Buy and increase TP to $2.70 from $2.20. House note that 4Q11 net profit of US$73m (up 139% yoy and 97% qoq) was significantly better than expected owing
to:
1) higher than expected production at the Sebuku Northern Leases,
2) higher blended ASP of close to US$100/ton,
3) lower than expected cash cost of US$34/ ton in Sebuku, compared to US$44/ton in 3Q11,
4) hedging gains of US$13.9m under the new risk management policy and
5) lower tax rate of 27% (30% in FY10).

FY11 net profit of US$190m (up 116% y-o-y) was SAR’s best FY result to-date. Sebuku ramp up should offset slower growth in Jembayan. The commendable 4Q results were achieved
despite lower production in Jembayan mine caused by heavy rainfall and the public bridge collapse in December, which affected traffic on the Mahakam River.

Going into 2012, operations at Jembayan will be slow and pit preparation works will imply lower production and higher costs in 1Q and 1H12, however, the slowdown at Jembayan will be more than offset by the expected ramp up at the Sebuku mine, which is progressing ahead of schedule.

House expect coal prices to remain steady at around US$115/ ton in 2012. Overall upgrade the stock to BUY, for the solid earnings execution; good earnings growth prospects and healthy 6% dividend yield in FY12. TP is raised to S$2.70, pegged to midcycle forward valuation (of blended 12x PE/ 3.5x P/BV).

Raffles Edu

2012-02-15T12:39:00.002+08:00

Raffles Edu: According to a Viet media report, Raffles Edu has criticized the VND75m fine imposed by the Viet govt for allowing Raffles Int’l Training Centre to illegally enroll and award Viet students overseas diplomas and degrees from Spore. The ministry ordered RITC to suspend advert, admission and cancel the courses, leaving many students in the lurch. This contributed to a 10-13% drop in revenues for the group in 4Q11, but was not addressed in the group’s recent results commentary.

The Than Nien news further alleged that in Oct 09, RITC was found forging the score records and English language certs of many students in order to qualify them for college courses in Spore. Stock is -0.9% to $0.525, still sitting above its resistance turned support at $0.49.

Chemoil

2012-02-15T12:39:00.001+08:00

Chemoil: Surges 16.4% to US$0.355 on high vol after reporting FY11 profit attributable to equity holders of US$46.3m, swinging from a year-earlier loss of US$9.5m, supporting energy traders' expectations bunker-fuel trading remains a hot business, especially with Asia's fuel-oil deficit.

Grp note that stable results from marine terminals, improved profitability from all our marine fuel supply regions and positive results from new businesses, OceanConnect Marine and renewables trading, all contributed to the improved results. But further gains could be limited as the stock is up 51.1% month-to-date, bolstered by news Glencore increased its stake in the marine-fuel supplier to 89.0% from 51.5%. Its low free-float of around 10% also tends to make the stock volatile. Its 52-week high of US$0.365 may be a near-term cap.

Great Eastern / OCBC

2012-02-15T09:39:00.001+08:00

Great Eastern / OCBC: Announced weak FY2011 net profits. 4Q11 net profit of $69m was below expectations, and not far above the weak $40m profit of 3Q (2Q: $118m, 1Q: 159m). As per the prior qtr, the non-par result was the chief contributor, surprisingly posting a loss in 4Q. Mgt attributed this to unfavourable movements in swap spreads, offsetting improved credit conditions from the 3Q low.

Citi however maintains a Buy with $16.82 TP, due to still positive trends in premium growth, which in turn drives a higher per share embedded value (EV/S). Add that YTD 2012 market conditions suggest a likely recovery in non-par fund results from the 4Q11 loss. Swap spreads have narrowed, and credit conditions have improved further as more liquidity returns to markets. Although it can be dangerous to over-generalize, house suggest that during less volatile periods the non-par profit can be up to $50m per quarter (par about $30m, and similarly for ILP).

Tat Hong

2012-02-15T09:38:00.001+08:00

Tat Hong: Blow out results, which exceeded estimates. Despite the setback of a S$8.2m loss from the legal suit due to its joint venture, CIMB maintains O/p and is confident that the group is on track to meet our growth projection given the ramp-up in Australia. FY13-14 could see positive surprises as its recovery gains strength.

GLP

2012-02-15T09:37:00.003+08:00

GLP: Announced 3Q12 results, which was saw core earnings below estimates. Rev at US$145m, +19% yoy and +4.3% qoq, while core net profit excluding revaluation gains at US$68m, -7% yoy and -34% qoq. Result brings 9M12 rev to US$412m, +18% yoy and core net profit to US$245m, +12% yoy.

Grp’s higher rev was mainly attributable to the completion and stabilisation of its development projects in China, contribution from ACL, while grp also saw an a net fair value gain of US$ 24.3m, which helped boost bottom-line. However, core bottom-line was impacted by unrealised foreign exchange losses on JPY assets

Going forward, grp remains confident of prospects and note that portfolio continues to deliver solid results and see sustained leasing momentum in China driven by growing domestic demand, with China now contributing to abt 29% of grp’s total rev vs 19% yoy.

We note that balance sheet remains strong, with Leverage ratio at 21.7%, while fundamentals remain strong, with grp’s Jap portfolio at 97% leased and a Wale of 5.4yrs, while China at 91% leased with a Wale of 3.4yrs. At current price, grp trades at 0.95x P/B.

Ratings as follow:
CIMB maintains O/p with $2.27 TP

Olam

2012-02-15T09:37:00.001+08:00

Olam: Announced 2Q11 results which were slightly ahead of estimates. Rev at $4.5b, +11% yoy and +39% qoq, while core net profit at $128.5m, -11.6% yoy and +376% qoq. Stronger qoq performance was largely due to seasonal patterns, while Net Contribution (NC) Margins increased slightly at 7.9% vs 7.6% yoy. Result brings 1H12 rev to $7.7b, +18.8% yoy and core net profit to $162.7m, -7.1% yoy.

Performance led by increase in total sales vol, at 2.6m mt, +14.5% yoy, where by grp’s relatively recession-resistant food category accounted for 77.6% of rev and 83.2% of vol. More importantly, this segment recorded strong Net Contribution growth of 32.1% over the previous period, led by grp’s Food Staples & Packaged Foods segment, which registered the highest vol growth across all its segments, driven by market share gains in Rice and Grains businesses in Africa.

Grp’s Industrial Raw Materials (IRM) segment accounted for 22.4% of rev and 16.8% of the vol in H1 FY2012, registering volume growth of 7.4%, however due to very difficult trading conditions, NC in this segment declined 29% vs yoy, as the segment is more recession sensitive.

Going forward, grp remains confident of prospects and will continue to focus growing its business, both organically in its supply chain core and through acquisitions in the mid and upstream segments of the value chain.

We note that grp’s balance sheet remains strong, with an adjust Net Gearing of 42%, while at current price, grp trades at an annualized 15.8xFY12E P/E.

Ratings as follow:
Citi maintains Buy with $3.10 TP
CIMB maintains O/p with $3.17 TP
Deutsche maintains Buy with $2.90 TP
UOB Kay Hian maintains buy with $2.93 TP

STX OSV

2012-02-15T09:36:00.001+08:00

STX OSV: Announced very strong 4Q11 results which were way ahead of estimates, coupled with an attractive div payout of $0.10/share, however mgt refused to speak anything abt anything related to a potential sale of grp by its Parent.

Rev at Nok 3.1b, -12.9% yoy and -8.8% qoq, while net profit at Nok 638m, +117% yoy and +72.9% qoq. Ebitda Margins surged to 28.2% vs 11.4% yoy, largely attributed to the release of risk contingencies at the end of complex projects, resulting in Ebitda of $876m, +115% yoy.

Result brings FY11 rev to Nok12.4b, +4% yoy and net profit to Nok 1.6b, +56.2% yoy, while Ebitda margins at 18.9% vs 11.2% yoy. Grp however has guidance that FY11 Ebitda was exceptionally strong, and would expect Ebitda margins to normalize between average of 10-15% going forward.

Strong performance was attributed to Grp’s stable operating performance, improved productivity levels and well-utilized yards, while successful project deliveries and the release of risk contingencies to profit at the end of complex projects contributed to the exceptional financial results.

Going forward, grp remains confident on prospects, citing strong market fundamentals, with oil majors continuing to increase their E&P spending budgets, and sees signs of increasing demand in particular for AHTS and OSVs, but caution that uncertainty remains as to when this will translate into a sustained upturn in new order activity in the OSV mkt, while rate of order conversions is still hampered by constraints in shipowners’ ability to finance new vessel projects.

We note that grp’s fundamentals remain strong, with an orderbook of Nok16.7b, underpinning earnings visibility till 2014, while balance sheet remains strong, with grp in a net gearing position of Nok2.8b (excluding construction financing) Grp has declared a div of $0.10/share, representing an attractive 6.5% div yield. At current price, grp trades at an annualized 5.3x P/E

Ratings as follow:
Cimb maintains O/p with $1.84 TP
Citi maintains Buy and upgrades TP to $1.90 from $1.65
DMG Upgrades to Buy from neutral and raises TP to $2.00

Sakari

2012-02-15T09:32:00.000+08:00

Sakari: Announced a record 4Q11 results which blew all estimates, bringing Co’s FY11 rev to exceed $1bil for the first time. 4Q11 Rev at $312.6m, +51% yoy and +44.4% qoq , while net profit at $72.9m, +139% yoy and +38% qoq. Result brings FY11 Rev to $1.1b, +30% yoy and net profit to $92.9m, +28% yoy.

Blow out results was due to higher value coal from Sebuku’s Northern Leases which helped to lift ASP to $100/t in 4Q11, resulting in grp exceeding the far-reaching targets which was set at the beginning of 2011. Overall, sales Vol for grp at 3,077 kt, was +6.1% yoy, with sales from Sebuku at 862 kt and Jembayan at 2,215 kt, while overall ASP for grp increased to $99.77/ton (FY11 at $92.93/ton) Cash costs however increased 16% to $54.54/ton vs $46.90/ton.

Sebuku surpassed many expectations by completing the first coal shipment from the Northern Leases just 5 mths after mobilising operationsin the area and pushing Sebuku’s coal production to 758Kt in 4Q11 from an average of 338Kt for 9M11. The positives from Sebuku, which is now on track to reclaim its position as one of the highest margin producers in the region, highlight the advances in 2011 and demonstrate just how strong Sakaru’s earnings and production platforms have become.

Sakari’s policy of paying 60% of its net profit to shareholders has again been confirmed with a final div of 5.83 US cents per share, bringing FY11 total to 10.07 US cents, representing a 5% yield. At current price, valuations are undemanding, with grp trading at 11.5x FY12E P/E

SG Market

2012-02-15T09:11:00.000+08:00

SG Market: Spore shares may open higher, possibly taking a stab at the key 3000 resistance level, tracking gains in most regional markets. The BOJ's surprise move on Tue to ease policy by expanding its asset purchase program may spur speculation other central banks, including the Fed, may unleash more quantitative easing. Wall Street's swift 11th-hour reversal is also likely to be viewed positively. While Greece remains a concern, the lack of financial carnage on Tue after Moody's downgraded 6 European nations suggests traders are getting more battle-hardened to Europe.

On the local front, latest corporate results are likely going to take centre-stage with Sakari reporting blowout 4Q earnings on both volume and ASP growth, while quarterly earnings from STX OSV, Olam and Tat Hong are also above expectations. GLP 3Q earnings are a shade below estimates despite positive revenue growth and prospects in China. Rotary may also be in focus after announcing a US$34m Saudo contract.

Cosco

2012-02-14T16:28:00.001+08:00

Cosco: Counter is still on an uptrend but looks like it might come down soon. Bearish divergences seen in all 3 indicators. While both RSI and Stochastics have not retreated from overbought lvls, the ADX is starting to flatten and MACD is on the verge of turning negative as well. See support at $1.21, fibo retracement lvl and recent resistance-turned-support.

DBS Group

2012-02-14T11:02:00.000+08:00

DBS Group: DBS has received approval from the People's Bank of China for a Rmb10-20b bond sale with the final size and timing dependent on market conditions. This will help support China's efforts to internationalize the Rmb and deepen its domestic bond market, while offering investors more investment channels.

The bond sale comes as the bank plans to expand its presence in Greater China and expects contributions from the region to account for 33% of total revenue in the near term, up from 29%. Currently, DBS has 25 outlets in mainland China, comprising 10 branches and 15 sub-branches.

Despite a more challenging operating environment, DBS China doubled it net profit to more than Rmb500m last year, while revenues surged 65%, making China the 3rd largest contributor to the group.

SingTel

2012-02-14T09:34:00.001+08:00

SingTel: Citi downgrades to neutral with $3.33 TP. Note of lack of catalysts to drive value. House cut FY12-14 EPS 7-9% and downgrade Singtel from Buy to Neutral with a new TP of $3.33. These reflect changes to affiliate expectations, and latest FX assumptions and tweaks to SG margins and Optus growth.

House see limited drivers on the horizon for the stock to re-rate further. Prospects for dividend surprise in the medium term look low. Moreover, EPS momentum has softened with affiliate disappointments and higher domestic SACs. Prefer M1 $2.43 TP and China Mobile HK$79.80 among the larger cap regional telcos.

Viz Branz

2012-02-14T09:33:00.003+08:00

Viz Branz: Reported an impressive set of 1H12 results: Rev at $91.2m, +10.1% YoY to $91.2m while its bottom line climbed 28.1% to $9.8m. Its key market - China, which contributed 54.7% of overall rev, was the main driver behind this stellar growth.

Mgt also declared an interim dividend per share of 1c per share, bringing the total interim div declared so far to 1.3c (0.8c previously). Expect VB’s strong performance to continue into 2H12 as China maintains its spot as VB’s key target market. Furthermore, management has successfully demonstrated its ability in controlling costs effectively despite fluctuating raw material prices. OCBC maintains HOLD but with a higher fair value estimate of $0.37 ($0.33 previously)

KSH

2012-02-14T09:33:00.001+08:00

KSH: Reported 3Q12 results which was below expectations. Earnings miss due to no development contribution. Net profit at $3.1m, -64% YoY, due to slower construction progress and no recognition from the property development.

The BCA now forecast private construction demand to fall from S$16.8b (prelim – 2011) to $8-12b (2012). While public construction is expected to be flat YoY, public projects
have not been KSH’s focus historically and it remains to be seen whether similar margins can be maintained.

Grp also announced a 21-month $53.3m contract to construct The Boutiq in Kiliney Rd, which is owned by a JV between Tee International, Heeton Holdings and KSH. This
bumps KSH’s existing order book to S$506m.

OCBC downgrades to Hold with $0.25 TP, as house expect headwinds in the residential segment given policy impact and macro-economic uncertainties.

ST Engrg

2012-02-14T09:32:00.001+08:00

ST Engrg: Marine arm has won 2 shipbuilding contracts worth $75m from Swire Pacific Offshore to build 2 AHTS. Construction is to commence 2013

Co to also acquire an additional 2.8% equity stake in Telematics Wireless for US$1.1m (about S$1.4m). Co now owns 99.43% in Telematics. Telematic is engaged in the development of radio frequency technology and wireless solutions for the Machine-to-Machine (M2M) industry. Its major customers include location-based service providers for stolen vehicle recovery and fleet management, utility meter manufacturers, as well as electronic toll system providers and road toll operators.

STX PO

2012-02-14T09:31:00.002+08:00

STX PO: Co to issue KRW250b ($279.4m) of bonds at 3.0% p.a payable quarterly with attached warrants. The bonds are expected to be issued on 21 Feb. The exercise price of each warrant is expected to be KRW6980 ($7.80) subject to changes with 1 share for every warrant exercised. The exercise period will begin one month after the bonds are issued and will last till one month prior to the maturity date of the bonds.

Capitaland

2012-02-14T09:31:00.001+08:00

Capitaland: 4Q rev was approx $1.1b +17.3% yoy with net profit at $476.6m -20.0% yoy. FY11 rev at $3.0b -10.8% with net profit at $1.1b -25.8% yoy. FY2010 figures were restated due to adoption of FRS115.

Co recorded 4Q11 fair value gains of $172.9m compared to $94.9m prev yr. Revaluation gains from associates came in at $158.6m compared to $238.5m prev yr. Portfolio gains of $110.8m ($266.7m in 4Q 2010) for the quarter also include divestment of Corporation Place and a plot in Shanghai.

The increase in rev was due to development project in Sg, China, Australia and Vietnam. Rev from malls were also higher but lower from service residences and fees. Revenue from Ascott mainly saw a drop due to the divestment of New Minzhong Leyuan to CRCT in 2Q and Ascott Beijing to the Ascott China fund in 3Q.

Co’s overseas rev was approx 64.4% of total rev up from 51.5% prev yr, with China and Australia being the main contributors.

A total dividend of 8.0c has been declared (6.0c final, 2.0c special). At current NAV of $3.51, Capitaland is trading at approx 0.83x P/B

Comfort Delgro

2012-02-14T09:30:00.003+08:00

Comfort Delgro: Results relatively in-line but dividend raised to 3.3c from 2.8c prev. FY2011 rev at $3.4b +6.4% yoy, net profit at $235.6m +3.1% yoy. For Sg, FY11 rev gains were driven by mainly taxi segment +8% yoy.

Co's bus business was 4.5% higher at $1.7b mainly due to a increase in Australia operations. Despite a growth in avg daily ridership of 6.0% for Sg ops, this was offset by 2.5% drop in avg fares. However SBS transit incurred an operating loss of $6.0m compared to prev yr’s profit of $14.9m due to fuel costs. Australia ops was 19.5% yoy at $445.8m due to more services and partly due to a stronger A$. Rev from overseas ops was approx 62.7% of segment revenues compared to 61.7% earlier.

Revenue from taxi segment was 5.8% higher mainly due to an increase in no of taxis and acquisitions. In Sg, rev was 7.6% higher on more replacement taxis, a larger fleet and higher volume of cashless transactions. China's contributions also rose due to the increase in licenses (800 in Chengdu, 50 in Suzhou and 65 in Nanning)

The NEL saw a 12.9% increase in avg daily ridership and 15.7% in Light Rail Transit which boosted rev by 10.5% to $134.4m slightly offset by 1.9% drop in avg fares. Automotive Engrg segment rev was higher at $449.7m but operating profit decline due to higher cost of materials.

Mgmt expects growth across most business segments and mkts except in UK where macro weakness will impact growth.

A proposed dividend of 3.3c has been declared, coupled with prev interim div of 2.7c brings total div for the yr to 6.0c. At closing price of $1.48, div yield is approx 4.1%.

Deutsche maintains Buy with TP$1.48. UOB KH maintains Buy with TP$1.75. Citi maintains Buy $1.64 up from prev $1.48.

Amtek

2012-02-14T09:30:00.001+08:00

Amtek: Announced 2Q12 results which were below estimates. Rev at 155.6m, -11% yoy and -14.4% qoq, while net profit at $8.0m, -39% yoy and -11.9% qoq. Gross margins dipped slightly at 16.3% vs 18.7% yoy. Result brings 1H12 rev to 337.3m, -1% yoy and net profit to $17.1m

Drop in rev was due to the challenging business environment in 2Q12, where grp saw a 5% decline in Consumer Electronics products sector; a 5% decline in Casing and Enclosures product sector sales, a 16% decline in Mass Storage product sector sales due to supply chain disruptions caused by the floods in Thailand and a 6% decline in Others product sector rev due to slowdown in customers’ demand across the sector.

Sectors which saw growth included grp’s imaging and printing product sector which grew 17%, while demand for Automotive products remained positive in the PRC throughout 1H12. Notwithstanding weaker demand in Europe, Grp’s Automotive product sector registered a growth of 9% yoy in 1H12.

Going forward, grp retains its level of investment in the business infrastructure and believes that conditions should recover progressively throughout 2012. Barring unforeseen circumstances, Group expects to remain profitable in FY12

We note that overall, balance sheet remains strong with net gearing at a low 20.8%, while at current price, grp trades at an annualized 10.1x FY12E P/E vs historical average of 14x.

Ratings as Follow:
CIMB maintains Neutral with $0.79 TP.

WingTai

2012-02-14T09:29:00.001+08:00

WingTai: Announced 2Q12 results, which was broadly in-line with average street consensus. Rev at $185.6m, +18% yoy and +71% qoq, while net profit at $34.2m, +1% yoy and +31% qoq. Gross margins however fell, at 44.1% vs 54.7% yoy. Result brings 1H12 rev to $294.6m, +31% yoy and net profit to $59.3m, +46% yoy. (Note that FY11 results were restated, without which, developer would have posted lower yoy earnings)

Strong rev attributed to recognition from progressive sales of Foresque Residences and L’VIV and additional units sold in Helios Residences and Belle Vue Residences. Profits of associates and JVs also saw an increase of $19.2m to $50.1m in the current period, primarily attributable to higher contributions from The Floridian and Ascentia Sky by Tanglin projects in SG and also from Wing Tai Properties in HK.

Going forward, grp remains cautious of outlook, noting that growth in private residential property prices continues to moderate for nine consecutive qtrs, while number of new residential units sold islandwide in 2011 was 15,904 units, slightly less than the 16,292 units yoy. With the imposition of the additional buyer’s stamp duty in Dec, the property market is consolidating and Grp will keep a close watch on the ppty market and will at the appropriate times release more residential units for sale in the current yr.

We note that grp’s fundamentals remain strong, with net gearing at 26%, down from 36% yoy, while at current price, valuations are very compelling, with grp trading at 0.52x P/B.

Ratings as follow:
Cimb neutral with $1.33 TP
Citi maintains Sell with $1.10 TP.
Deutsche maintains Hold with $1.14 TP.
Kim Eng maintans Hold with $1.12 TP.

SG Market

2012-02-14T09:15:00.000+08:00

SG Market: Spore shares may rise on open following Wall Street’s positive close but may struggle to hold onto gains amid continuing worries over the European debt crisis. Investors are likely to turn cautious after Moody’s cut the debt ratings of 6 European countries and placed negative outlook on UK, France and Italy.

Latest corporate results are a mixed bag. CapitaLand may be in focus after reporting a 20% drop in 4Q11 net profit to $476.6m although this top the $193m due to fair-value gains and gives a cautious outlook. Wing Tai posted a better-than-expected 4Q results with net profit up 46% and NAV rising to $2.47. ComfortDelgro 4Q results was relatively in line with expectations. Technics O&G did well, posting a 31% jump in quaterly profits. But Amtek, Pan Hong, Rickmers, KSH and Sim Lian all reported poorer results with significant declines in earnings.

Expect STI to continue ranging within 2910-3000 band.

Yoma

2012-02-13T16:48:00.001+08:00

Yoma: On closer scrutiny, the rights deal will enable major shareholder Serge Pun (50.05% stake) to monetize his land development rights over Star City in return for $45m cash (net of his portion of subscription rights) while retaining his 50.05% stake in the enlarged Yoma, which includes the Star City injection. This gives Serge Pun plenty of “financial ammo” to ensure the success of the rights deal.

Yoma

2012-02-13T15:07:00.001+08:00

Yoma: To lift trading halt at 3.15pm. Results out and rights issue.

3Q rev at $9.8m a almost five-fold increase yoy, +35.1% qoq. Net profit at $1.3m compared to loss of $462k prev yr same period -2.6% qoq. Increase in revenue was due to sales of housing and land dev rights (LDR) in Myanmar. A total of 43 plots were sold compared to 7 plots in the previous quarter. In addition co also recorded housing sales of $1.4m.

For future developments, co is looking to pursue its right to acquire the LDRs in relation to Star City.

The rights issue is also to fund its LDR acquisition of Star City. Co will issue 4 rights share for every 5 shares. The rights shares will be issued at $0.395 per share, 39.2% discount to the last traded price.

Yanlord

2012-02-13T13:56:00.000+08:00

Yanlord: CLSA upgrades to Underperform with $1.30 TP. House believe that tycoons’ recent investment in Yanlord’s shares support the company in two ways, short term performance of the shares as this is seen as smart money flow, and cashflow as Yanlord will need to refinance an expiring bond of SGD375m and if the tycoons like the shares they will likely also be interested investor in any new bond issuance by Yanlord.

However, the company’s fundamental remains weak and its 8.8x FY12CL PE valuation is not particularly attractive. House also believe that recent investments by the Tycoons, may not necessarily have an investment perspective or horizon that is aligned with typical equity investors, and are not able to make any sense of Peter Lim’s recent investments too as seen below.

PEC

2012-02-13T09:41:00.001+08:00

PEC: Announced 2Q12 results. Rev at $130m, + 18% yoy, while net profit fell by 70% YoY to $3m, mainly on lower gross margins (2Q12: 20%; 2Q11: 26%) and unexpected
losses from its associates and JVs (2Q12: $5.9m losses; 2Q11: $0.3m profit).

Losses from associates /JVs were mainly due to delays in project completion and unsettled costs incurred on variation works. On a qtrly basis, net profit increased 24%, led by a 19% increase in revenue and improvements in gross margins (2Q12: 20%; 1Q12: 18%). 1H12 net profit was $5.6m (1H11: S$19m; -71%) and formed about
40% of our full-year estimates.

Pending a teleconference with management in the afternoon, OCBC places buy rating and $0.92 fair value estimate UNDER REVIEW.

Nera Telecom / Addvalue Technologies

2012-02-13T09:38:00.001+08:00

Nera Telecom / Addvalue Technologies: Note that STE Limited, a subsidiary of ST
Engineering has proposed the acquisition of Nera Telecommunications at a price of $0.45. The announcement quotes the acquisition cost as 5.06x P/NTA.

CIMB recommends don’t jump into Radiance Group’s shares though as the company is currently involved in reverse takeover. Other company with satellite related business is Addvalue Technologies which trades at a historical P/NTA of 10x.

IEV

2012-02-13T09:37:00.000+08:00

IEV: CIMB has Technical Sell Call. Note that stock formed a shooting star pattern on Tuesday and prices have been drifting sideways to lower since then.

Technical indicators continue to show signs of weakness with its MACD starting to ease. Its RSI is overbought and a plunge through the 70-pts mark would indicate a sell signal. Both indicators point to lower prices ahead. Recommend Sell into strength is a good option here with a buy stop placed above $0.955. Anything above $0.955 would likely indicate that our bearish view is incorrect. Expect prices to drop towards $0.67-0.70 levels next.

Artivision

2012-02-13T09:36:00.003+08:00

Artivision: Technical Sell Call by CIMB. House note that both its MACD and RSI have just confirmed their respective sell signals, indicating that there should be more downside in the coming days.
The stock is a sell now with a buy stop placed above S$0.315. Expect prices to weaken towards $0.205-0.225. The support band is also where its moving averages currently lie. Expect some buying support to set in around those levels

Genting SP

2012-02-13T09:36:00.001+08:00

Genting SP: (The Edge) Will Genting SP strat paying dividends soon?

Analysts note that Genting SP appears to have the financial capacity to pay out a dividend. Based on last yr, cash flow was in excess of $1b, and capex were only abt $500m. Under Co’s existing debt covenenats, however there are restrictions on div distribution unless certain criteria are met.

Hence, most analysts are expecting that Co will only start paying div out in 2013, but add that there is a chance that Genting SP could pay a small div, to broaden its investor’s base to investors who can only invest in income generating stocks.

Overall, Genting SP still ranks as a Buy for most analysts. Co. is likely to get a boost from new rooms as it expands its portfolio of hotels to some 620 gaing tables. Co. also trades at a forward 10.9x Forward Ev/Ebitda. Add that at casinos in Las Vegas, non-gaming rev can make up almost half of casino resorts rev, suggesting that SG IR’s still have ample room to ramp up contributions from this sector. (currently 15.1%)

Tiger

2012-02-13T09:35:00.001+08:00

Tiger: Operating stats for Jan, both load factors and passengers carried were lower. For the year end Jan 2012, total of 5.7m passengers flew with co -3% yoy. Average load factor for the 12-mth period to Jan 2012 was 82%, down 4% pts compared to the prev 12 mths. For the mth of Jan 2012, co carried 466,000 passengers, -14% compared to the same month last year. The average load factor across Asia and Australia for the month was 75%, down from 84% in Jan 2011.

ST Engrg and Neratel

2012-02-13T09:33:00.004+08:00

ST Engrg and Neratel: ST Engrg to acquire Nera Telecomms for $0.45 per share in a scheme of arrangement, approx $141.1m. The scheme of arrangement requires 75% of all shareholders to approve. If the scheme does not obtain the necessary approvals, ST Engrg will not proceed to acquire even a single share.

Eltek ASA (owning 50.05% of Neratel) has voted in favour of the scheme. The scheme also requires approval by court. An option in the event of an competing offer has also been made with Eltek allowed to accept a competing offer if the price offered is higher than $0.475 and ST Engrg allowed to make a higher bid.

Neratel’s closing price was approx $0.50 and the offer is approx 10% lower than closing. However we note that the share price has seen a steep rise since start of Feb.

Neratel trades at 13.3x P/E and 3.3x P/B at last closing.

Singtel

2012-02-13T09:33:00.003+08:00

Singtel: Net profit slightly under consensus. 3Q rev at $4.8b +2.7%yoy +4.8% qoq with net profit at $903m -9.5% yoy +2.5% qoq. EBITDA at approx $1.3b -2.2% yoy +0.5% qoq. Of note EBITDA margins fell slightly from 27.1% prev quarter to 26.0% this quarter. Revenue from both Sg and Australia ops grew 4.4% and 1.5% respectively attributed to increased customer connections and a stronger Australia dollar.

For Sg, mobile comms rev rose 6% and a total of 3.6m customer base was achieved with current mkt share of 45.8%

However Bharti’s India operations and weaker regional currencies to SGD impacted associate contributions, -8.3% yoy. A net loss from NetLink Trust also negatively impacted results.

Co recorded 9M EPS of 16.95c, with annualized P/E of 13.6x

Singtel

2012-02-13T09:33:00.001+08:00

ASL Marine

2012-02-13T09:32:00.003+08:00

ASL Marine: Annouced 2Q12 results which was in-line. Rev at $77.4m (-25% yoy and 7% qoq) while net profit at $10m, -24% yoy and -11% qoq.

Lower yoy and qoq results was was due to a slower shipbuilding orderbook drawdown and lower repair/conversion rev. Offsetting the weak revenue was 2Q’s 17.3% gross margin, which surprised on the upside on stronger margins across all divisions.

Going forward, mgt not that order revivals are firmly on track, with ASL securing a further $54m of shipbuilding orders recently, bringing outstanding orderbook to
$553m, or a book-to-bill ratio of 2.1x. ASL has secured S$349m of shipbuilding orders in FY12 YTD, significantly above ASL’s 5-year historical average order wins of $238m/yr, and is the second highest order intake since FY07’s record $467m.

DBSV maintains BUY, TP $0.78 as house roll forward valuation to FY13F (from blended FY12/13F), still pegged to 7x PE for shipbuilding and chartering businesses, and
10x for repair (or an implied target FY12/13F PE of 10.2x/7.7x).

China MinZhong

2012-02-13T09:32:00.001+08:00

China MinZhong: Announced 2Q12 results which were below bullish estimates. Rev at Rmb650.8m, +19.4% yoy and +80.1% qoq, while net profit at Rmb 174.7m, +11.8% yoy and +87.5% qoq. Strong qoq performance was largely attributed to seasonal patterns. Margins took a hit, with gross margins at 36.6% vs 39.9% yoy, while operating margins also slumped at 29.6% vs 34.3% yoy.

Results was driven by better performances in both the Group’s cultivation and processed business segments, with processed business segment contributing 59.3% of total rev in 1H12 while cultivation business segment accounted for the remaining 40.7%.

The arrival of the winter season whose cool temperature is essential for the cultivation of Grp’s peak season crops, was delayed in this financial yr, resulting in the rollover of some sales from 2Q12 to 3Q12. Correspondingly, the delayed winter led to a late start in the cultivation of champignon mushrooms, the Grp’s largest product by rev.

Bottom-line however took a hit, on back of increased SG&A, Interest expenses and a loss in value of biological assets. Income tax expense however decreased by 68.3% or Rmb 20.8 m, to Rmb9.7m due to a higher proportion of the income being tax exempted. As a result, grp’s effective tax rate decreased to 5.2%

Going forward, grp remains positiveo n prospects and continues to see healthy demand for its vegetable products in both the domestic and overseas mkts. Capitalizing on the rising demand, Grp has also officially commenced operations at its New Industrial Park, with a processing capacity of approximately 3 times its existing capacity. On the cultivation end, approximately 22,000 mu of new farmland is expected to start contributions in FY2012.

At current price, valuations are undemanding, with grp trading at 6.1x FY12E P/E

Yamada

2012-02-13T09:31:00.001+08:00

Yamada: Announced very strong 2Q11 results which exceeded estimates. Rev at Rmb 218.2m, +89.1% yoy and +560% qoq, while net profit at Rmb 73.2m, +78.6% yoy and +1825% qoq. Gross margins slightly contracted to 40.5% in 2Q12 vs 41.3% yoy. Result brings 1H12 Net Profit to Rmb77.4m, +79.5% yoy.

Growth in earnings was mainly attributable to strong sales order momentum for self-cultivated edible fungi segment and processed food products, with sales of self-cultivated edible fungi surging 130% to Rmb174.5m, largely due to the expansion of shiitake mushroom cultivation base to approximately 5,134 mu* in 2Q12 vs 2,614 mu in 2Q11, while sales of processed food products increased by 10.6% to Rmb43.7m in 2Q12 from Rmb39.5m in 2Q11.

Going forward, grp remains optimistic on prospects and aims to move down the supply chain through collaborating with newly appointed distribution agents to set up 12 fresh shiitake mushrooms distribution outlets. Grp also plans to commence partial utilisation of its own eucalyptus trees to produce sawdust which are the raw material for the synthetic logs used in the cultivation of shiitake mushrooms which may lead to a potential cost savings.

At current price, grp trades at a mere annualized 2.9x FY12E P/E.

CMA

2012-02-13T09:30:00.001+08:00

CMA: Announced 4Q11 results, which was boosted largely by revaluation gains of $177m. Excluding revaluation gains, core net profit would have missed expectations at $28.4m.

Overall, rev at $66.3m, +20% yoy and flat qoq, while net profit at $205.4m, -39.9% yoy and +207% qoq. YoY drop in net profit was largely due from the restated net profit of 4Q10, baring which, net profit would have been +42.6%. Result brings FY11 Rev at $456.0m -18.7% yoy and net profit to $456m, -15.7% yoy, with revaluation gains at $320.3m, +146.8% yoy.

Grp note that underlying operating trends of key mkts in SG, China and Msia continue to perform well, registering increases NPI and tenants’sales last year. Performance of China malls was the strongest, with NPI growth of 20.7%, while Tenants’ sales in China malls also increased by 13.2% yoy, and see strong potential for the shopping mall sector in China.

Add that 2012 will be an inflection point for CMA, with grp having completed 33% of China NAV, and expects positive contributions from the malls. Grp also aims to open nine malls this yr - seven in China and two in Singapore.

We note that overall, grp’s fundamentals remain strong, with net gearing at 3.9% and an avg debt to maturity of 3.37yrs, while at current price, grp trades at a mere 0.93x P/b vs peers simple average of 1.7x P/B. Mgt has declared a dividend of 1.5c per share, bringing Fy11 div to 3c/share or 2% yield.

Citi maintains Buy with $1.88 TP
Daiwa has O/p Call with $1.65 TP.
DBSV maintains Buy with $2.03 TP.
Deutsche maintains Buy with $1.62 TP
Kim Eng maintains Buy with $1.92 TP
OCBC maintains Buy with $1.49 TP

SG Market

2012-02-13T09:29:00.000+08:00

SG Market: Spore shares may post modest gains, in line with most regional markets already trading, and some post-vote relief as Greek Parliament approved the tough austerity measures early this morning amid street riots. But even as Greece will no longer take centre stage, the danger is that with other eurozone countries also in the same boat, recessionary and debt risks in Europe remain high.

On the corporate results front, CapitaMalls Asia bottomline profit was boosted by revaluation gains, while SingTel, China Minzhong, PEC results all came in below expectations. Nera Telecom may fall despite a takeover offer from ST Engineering as the $0.45/share offer price is below its last-traded of $0.50.

China Fash

2012-02-10T12:30:00.001+08:00

China Fash: Announced on 13 Jan that co was discussing a possible acquisition of a company which may have a majority interest in a producing oil and gas field. Co has announced that such discussions are at a preliminary stage and will be declared if the deal goes through.

Olam

2012-02-10T10:00:00.001+08:00

Olam: -0.4% at $2.71, likely weighed by some scattered weakness in regional commodity plays and as most STI components are down, despite the index's 0.3% rise. Co. said Thur it has acquired Nigerian biscuit and candy maker Titanium Holding for US$167m.

Analysts note that the deal is part of the company's strategy to grow its packaged food business. They can send more, different products through the same distribution channel, but note that even at its peak, the downstream business was only at 10% of earnings. The stock remains up around

WingTai

2012-02-10T09:54:00.003+08:00

WingTai: CIMB has Technical Sell Call. Note that the rally from the Dec lows appears complete or close to completion. Prices have rallied back to test its resistance levels of $1.28-1.33, which is closely followed by the gap at $1.34-1.37. Both of these bands are likely to act as a strong resistance in the weeks ahead.

MACD is beginning to slacken a bit while its RSI shows a slowdown in upward momentum. Both suggest that a reversal could be on the cards. Traders should sell this stock now following yesterday’s hanging man pattern. The stock could still push a tad higher but as mentioned above, the upside is likely capped. Expect prices to pullback towards $1.20 and the $1.05-1.11 next.

Noble

2012-02-10T09:54:00.001+08:00

Noble: Technical Sell Call by CIMB. House note that the stock’s rebound from the Nov lows has been strong and prices are now faced with a strong downtrend channel, which is likely to act as a resistance. The huge gap of $1.20-1.605 has yet to be filled-up and we think prices could pullback soon before the bulls can do so.

See weakness on its intra-day charts while its RSI is now overbought as well. We think that prices could soon turn down to neutralize the overbought situation. Sell into strength is a good option here with a buy stop placed above $1.59, its 200-day SMA. Prices could soon test $1.33 and followed by $1.21-1.24, its 30-day and 50-day SMA.

Tiger

2012-02-10T09:53:00.001+08:00

Tiger: Technical Buy Call by CIMB. House note that Prices have formed a rounded bottom and have moved above its long term resistance trend line yesterday on strong volume. Still see a lot of positive at current levels. The stock remains a buy (see 4th Jan issue for our previous buy call) and those who bought earlier should up their stop from below $0.60 to below S$0.70.

The technical landscape continues to look good with its MACD just completed its rollover while its RSI is now back on an uptrend. The pick up in trading volume is also supportive of further rallies. Aggressive buyers should get in to buy now with a stop placed below $0.70. Expect prices to rally towards its 200-day SMA at $0.88 levels next. There is also a huge gap at $0.955-1.04, which would likely be the next target should prices take out $0.88.

Pac Andes

2012-02-10T09:52:00.002+08:00

Pac Andes: 1Q Rev at HK$2.4b +41.3% yoy -4.5% qoq with net profit at HK$139.6m +38.6% yoy over loss in prev quarter. Co saw a steep rise in other operating income (+457.6% yoy) mainly attributed to negative goodwill through making the Tassal Grp an associate. Gross profit decreased 2.1% despite higher rev on back of higher inventory costs which saw higher prices last quarter.

Pac Andes trades at approx 6.7 P/E.

China Fish

2012-02-10T09:52:00.001+08:00

China Fish: 1Q Rev at US$125.8m +9.3% yoy +35.6% qoq with net profit at US$23.8m +20.8% yoy, prev quarter net profit of US$781. Despite higher rev, gross profit fell 10.3% due to higher costs from prev quarter's higher priced inventory. Net profit was higher due to closure of a fishmeal plant, and higher one-off expenses in the same period last yr. On a yoy basis, sales improved due to higher sales from the North Pacific and Peruvian fishmeal operations. The increase in North Pacific was due to higher ASPs and Peruvian ops (11.3% of rev) rose 31.3% on higher sales volume despite softening fishmeal prices.

The Chinese govt has reduced duties payable on a range of commodities and food products which will have a favourable impact on co's fishery products. China currently contributes 69.4% of rev with Europe at 15.8%. Co has acquired 2 Peruvian fishing co in Nov 2011 which will increase its share of total allowable catch to 6.2% in North Peru and 11.7% in South Peru.

China Fish currently trades at 9.2x P/E and is 70% owned by Pac Andes

Starhub

2012-02-10T09:36:00.002+08:00

Starhub: Deutsche met up with mgt and overall maintains Buy Call with $3.03 TP. House note mgt and discussions centred on three key areas NBN, data pricing and the margin outlook. Highlights from meeting are summarised below.

Management continued to express optimism that NBN take-up could accelerate from 2H12, as current installation issues are being addresse. Key opportunities are within the enterprise segment, although it was recognised many enterprise customers remain locked into existing contracts with SingTel (for "two or more years.

Data pricing - focus on smartphone plans (not dongle/USB plans) One of the key 2012 developments management is looking forward to is a potential shift in the data pricing regime. The focus is on smartphone data pricing, with management expressing hope that the industry will move away from large data bundles.

Margin outlook - key drivers which should be supportive. While STH remains focused on growth, management was explicit in its intention to "grow profitably". Related to this, management did not demonstrate particular concern around STH's recent subscriber share loss.

SembMarine

2012-02-10T09:36:00.001+08:00

SembMarine: Nomura reaffirm Buy, TP $6.08 from $4.50, Earnings upgraded to assume more positive orderbook outlook, better margins. Raise FY12F/13F earnings estimates by 10%/9%, to account for an improved new order outlook and offshore margins.

Maintain optimistic view on the SG offshore rig builders. With oil trading at well within capex positive levels, expect new order pace to pick up, as strong industry tailwinds rekindle demand for offshore exploration & production equipment required for new offshore field discoveries.

Catalyst are Deepwater units & Petrobras. Counter trades at FY12/13F PE of 18x and 17x (at the mid-end of the historical PE band of 6x and 28x) with dividend yields at 3.5% and 3.7%.

Parkson Retail

2012-02-10T09:35:00.001+08:00

Parkson Retail: Announced strong set of 2Q12 results which was in-line with estimates albelt at the higher end. Rev at $120.4m, +25.1% yoy and +13.2% qoq while net profit at $13.64m, +26% yoy and +2.3%qoq.

Grp, which has operations in Malaysia, Vietnam and Indonesia, said strong 1H12 rev was largely driven by the strong growth in same-store sales, improved sales productivity from existing stores, the opening of new stores and the inclusion of operations in Indonesia acquired last June.

Going ahead, remains positive on prospects, and remains confident of maintaing position as a leading department store in the region. Separately, we note that a substantial shareholder had reduced its stake from 7.01% to 6.2% via JP Morgan, although there is no news on who it was.

FJ Benjamin

2012-02-10T09:34:00.002+08:00

FJ Benjamin: 2Q12 results in-line with expectations. Rev at $109.9m, +18% yoy, while operating expenses rose by 23% yoy to $45.1m, lowering operating margins by 1.35ppts. This was cushioned by a $2.2m fx gain from the strengthening of the US$ and HK$ against the Swiss franc, bringing net profit to $4.6m, +16% yoy.

Both the fashion and timepiece segments continue to achieve double-digit growth in Asia, at 19% and 16% YoY respectively. In North Asia, sales grew 29% YoY to $24.5m; Hong Kong sales grew 9% while sales in China saw a 44% rise. In 2Q, North Asia made up 22% of FJB’s total sales, with Southeast Asia accounting for 77% (-2ppt qoq).

Over the past year, RAOUL has more than doubled its sales to the US and Europe. The brand is now sold in 39 stores in Europe, excluding Russia, and in major department stores in the US. It continues to receive endorsements from young Hollywood stars.

Going forward grp reiterate its plans to expand into the ASEAN region and is targeting to own 192 outlets by end-FY Jun12. The group recently set up four outlets – La Senza, RAOUL, Guess and Gap – in Johor Premium Outlet. Kim Eng maintains Buy with $0.42 TP.

China Fishery

2012-02-10T09:34:00.001+08:00

China Fishery: 1Q12 results in-line with expectations. Rev at US$125.8m, +9.3% yoy, while net profit at US$23.8m, +20.8% yoy. Results accounted for 19% and 17% of estimates for FY12 rev and net profit respectively.

1Q is traditionally the weakest qtr as fishing is not in season. Sales benefited from the delayed utilization of its fishing quota from 4QFY11 in anticipation of higher ASPs, as well as higher sales volume from carried over inventory due to the non-fishing season.

Benefiting from cost savings, Gross margins declined from 37.1% to 30.5%, with the higher cost of sales attributable to the purchase of fish for on-board processing in the North Atlantic by its factory vessel, as opposed to pure trawling operations.

Net margin improved from 17.1% to 18.9%, with lower finance costs (-37.3% yoy) and lower administrative costs (-37.1% yoy), attributable to lower bank charges and admin fees, and interest cost savings from the early redemption and refinancing of its senior notes in Nov 11.

Ratings as follow:
UOB kay Hian Maintains Buy with $1.82 TP.

Olam

2012-02-10T09:28:00.000+08:00

Olam: Acquired Titanium Holding co, a leading Nigerian biscuits and candymaker for US$167m. Titanium owns the 2nd largest biscuits and candy franchise with turnover of approx US$162m in 2011 and has mkt shares of 18% in biscuits and 28% in sugar candy in Nigeria. Mkt growth rates are approx 10-12% and 12-15% respectively with CAGR of 26% in rev over past 5 yrs. Titanium owns 3 biscuit and candy factories with a fleet of trucks and other logistics assets.

This may complement its earlier acquisitions in Nigeria which include a sugar processor, a wheat milling facility and a rice milling facility.

MS reiterates Overweight, acquisition is likely to be viewed positively due to:
1) being earnings accretive – estimate it to add 3-4% to F2013E earnings;
2) a good-quality business with zero debt and a strong track record and
3) deal transacted at a reasonable multiple of 8.1x EV/EBITDA, which is
23% lower than the previous transactions in the space. It also compares well with average Asia F&B multiple of 13.5x.

Macq reiterate Outperform, TP$3.10, a more palatable acquisition. More receptive to this deal which is immediately accretive to cash flow and earnings. Titanium has 17-18% EBITDA margins vs 5-6% at Olam. Olam expects a 29% equity IRR on this deal.

Deutsche has Buy rating, TP$2.90, acquisition will enable Olam to tap the fast-growing consumer market in West Africa.

F&N

2012-02-10T09:09:00.001+08:00

F&N: Announced 1Q12 results which were slightly below estimates. Rev at $1.4b, -10.6% yoy and -29% qoq, while core net profit (Excluding exceptionals) at $151m, +2.2% yoy and -14.6% qoq.

Results saw strong earnings growth from grp’s breweries division, which rose 30% to $159m driven by vol growth and price increases in the SE Asian (+18% PBIT), Indochina (+18% PBIT) and Oceanic (+48% PBIT) markets. This offset declines due to the implementation of IFRS115 regarding the completion accounting of overseas profits.

Soft drinks division meanwhile, saw a decline of 18% in rev, on a 13% decline in vol due to the split with Coca-Cola. FNN has taken steps to recover volumes by introducing additional products such as Red Bull, Zesta, F&N Fun Flavors as well as Clearly Citrus which was previously disallowed under the previous licensing agreement. Excluding impact of Coke, rev and vol would have risen 14% and 18% respectively.

Ppty development revenue dipped 34% YoY to $181m in 1Q12 due to the effects of completed projects in SG and lower sales from overseas development projects. However grp expect pre-sold development projects such as Punggol Watertown, Seastrand and Boathouse to underpin earnings in the next two years. Meanwhile, overseas, sales progress at the Queens Riverside projects has seen solid take-up of 125 units.

Ratings as follow:
Deutsche Maintains Buy with $7.32 TP
Kim Eng downgrades to Hold with $6.43 TP

DBS

2012-02-10T09:08:00.003+08:00

DBS: 4Q results above estimates. 4Q total rev was 1.9b +10.8% yoy -2.6% qoq. Net profit at $731m was +7.8% yoy -4.1% qoq. Lower 4Q11 taxes contributed to a higher net profit.

Customer loans grew 4.9% qoq (slower than prev 10% growth last quarter) to $194.7b and deposits grew 2.6% qoq to $225.4b with Loan deposit ratio at 0.86. Net interest margin remained flat at 1.73bps but net interest income grew 6.3% qoq to $1.3b. Non-performing loans remained flat qoq at 1.3%
Loans grew across all industries and all regions except HK. Notably, loans in China at $30.1b grew 27.6%.

Net fee income at $342m -4.5% yoy -13.8 qoq. Though a drop, this was supported by credit card fees +37% and wealth mgmt fees +12% qoq. Trading income at $145m was -6% yoy +5% qoq.

Capital adequacy ratio increased slightly with tier 1 at 12.9% (12.6% prev quarter) and including tier 2 at 15.8% (15.5% prev).

Final div of 28c per share declared, with full yr payout at 56c same as prev yr. DBS currently trades at P/B 1.1x. Results briefing will be later today after which more reports will be available.

DMG maintains Neutral and UOB KH maintains Buy.

SG Market

2012-02-10T09:08:00.001+08:00

SG Market: Spore shares are likely to continue consolidating recent gains as regional markets are mostly lower despite Greek debt agreement. The market is also getting a bit weary going closer to the 3000 level with some traders are looking to take some money off the table although there is still a lot of liquidity and investors who missed the earlier rally could jump on the bandwagon on pullbacks. Expect STI to range trade between 2940-3000 range.

Olam will likely be in focus after acquiring Nigerian candy-maker Titanium Holding for US$167m. DBS will also likely be in play after reporting higher-than-expected 4Q11 net profit, while F&N reported that 2.2% rise in core 1Q12 profit.

Dukang Distillers

2012-02-09T10:34:00.001+08:00

Osim

2012-02-09T10:33:00.000+08:00

Osim: IIFL reiterate Buy, TP $1.45, following FY11 results. Note that OSIM remains focused on the raising productivity per outlet and per man to improve profitability.

During 2011-14, expect the Grp to deliver 19% profit Cagr with a net margin expansion of 67bps to 13.6% in 2014. Expect OSIM to pursue inorganic growth opportunities in order to maintain 20% annual profit growth beyond 2013, which will be aided by a 4-fold increase in net cash position to S$230m in 2014. Like the stock for its double digit earnings growth, strong net cash
position and >30% RoE.

China MinZhong

2012-02-09T10:30:00.001+08:00

China MinZhong: Macquarie maintains O/p, with TP $2.35. Recommends Buy ahead of peak season earnings. 2Q12 earnings before market opens on 13 Feb.

Expect Minzhong to deliver rev of Rmb837m and adjusted EPS of Rmb0.41, during the seasonally strong 2Q, representing 54% and 48% YoY growth. Expect MINZ to grow organically 33% this year and 29% in FY13. The balance sheet is strong with virtually no net debt, yet valuations remain at distressed levels of 0.8x P/BV and 3.2x FY12E PER.

Target 7.4x FY12 PER is in line with its average level prior to the sector’s corporate governance scandals erupted in 2Q11. Believe MINZ’s growth and quality is well above sector average of 5.7x CY12. Think that next week’s results should prove to be a meaningful catalyst for further performance.

Tiger Air

2012-02-09T10:07:00.000+08:00

Tiger Air: Citi has insights towards grp’s search for a new CEO. Recall that current CEO Mr. Chin Yau Seng is returning to SIA, and house cite that the background of Tiger’s new CEO should be closely watched as a signal for Tiger’s long-term direction. An appointee with no affiliation to SIA or Temasek may signal Tiger’s commitment to its Pan-Asia ambitions and independence as a point-to-point carrier, while an appointee within SIA’s ranks may signal renewed commitment to forge closer relationships with SIA’s stable of airlines, but may throw up questions on the reasons behind Mr. Chin’s departure.

Overall, expect minimal short-term impact, noting that Mr. Chin has steered the group well past its worst moment since coming on board: internal processes were strengthened, governance
was improved, and Mandala Airlines appears to be heading for a smooth start. House however still maintains Sell rating with $0.55 TP, as its turnaround may be subject to multiple external uncertainties beyond management’s control.

Raffles Edu

2012-02-09T09:38:00.001+08:00

Raffles Edu: Slightly below consensus. 2Q Rev was at $36.1m -12.8% yoy -0.4% qoq, net profit was at $3.5m-14.6% yoy -80.3% qoq. This was even after a downward restatement of 2Q10 net profit figures from $5.6m to $3.9m. 2Q net profit included $9.0m on disposal of AFS financial assets. The absence of contribution by Shaanxi Electronic Information Institute and 50% of Zhongfa College were part of the fall in rev figures besides declining numbers of students for China’s Gao Kao.

Dividend of 0.5c declared, above 0.45c prev.

Biosensors

2012-02-09T09:37:00.001+08:00

Biosensors: Announced strong 3Q12 results which was in-line with bullish estimates. Rev at US$62.7m, +66% yoy and +49.6% qoq, while net profit excluding exceptional items was at $26.8m, +80% yoy and +24.7% qoq. Product gross margins at 70% was slightly down vs 75% yoy. Result brings 9M11 rev to $204.0m, +82% yoy and Core net profit to $72.4m, +101% yoy.

Strong rev attributed to Terumo Corp, grp’s licensing partner in Jap, who continued to record strong rev growth for its Nobori drug-eluting stents (DES), resulting in a more than four-fold yoy increase in licensing rev for Co.
Meanwhile, sales of Interventional Cardiology Products (IVP) recorded a yoy increase of 72% to US$58.7m, primarily driven by the Company’s flagship BioMatrix™ family of DES and the inclusion of JWMS’ results, which was consolidated into grp’s rev.

Going forward, grp remains positive on prospects, noting that 4 yr results from the LEADERS trial presented at the Transcatheter Cardiovascular Therapeutics (TCT) conference in Nov also showed improved long-term clinical outcomes for BioMatrix Flex™ in comparison to a sirolimus-eluting stent. Also aims to increase share in existing markets, via licensing rev from Nobori approval in Jap and capitalize on strong presence in high-growth emerging mkts such as China, India and Latin America.

We note that grp’s fundamentals remain strong with grp in a net cash position of $247.7m, (0.16c /share), while at current price, grp trades at an annualized 20.3x FY12E P/E. On ex-cash basis, grp trades at 18xP/E vs historical average of 44x.

Ratings as follow:
DBSV Maintains Hold with $1.68 TP.
Kim Eng Maintains Buy with $1.82 TP
Nomura Maintains Buy with $1.90 TP.

SG Market

2012-02-09T09:11:00.000+08:00

SG Market: Spore sshares are likely to take a breather, in line with softer opening in most regional bourses as the STI faces some resistance close to the 3000 level. Market watchers caution that the index could be reaching a point where the market is going to consider taking some money off the table with firm support at 2910.

Noble Group may be in focus after it tapped a new CEO for its agri unit. Biosensors may also draw interest after posting a good set of results that is in line with expectations. Yoma and Interra will continue to be in play on the Myanmar story.

XinRen Aluminum

2012-02-08T16:34:00.001+08:00

XinRen Aluminum: Could see positive interests after grp announced plans to make a strategic acquisition.

Under a conditional call option agreement with Wealth Checker, XinRen will buy a 21% stake in a growing primary aluminum producer in Xinjiang that has its own power plants. Xinjiang Plant has a production capacity of 447,000 tpa, a third of which is currently being utilized in trial production. (XinRen’s smelting capacity is at 275,000 tpa), in addition to two independent power plants (IPPs).

Grp note that option is an excellent investment opportunity for XinRen to immediately add a highly cost-efficient and integrated mega smelting and fabrication facility to its existing operations. The proposed acquisition is expected to boost Grp’s bottom-line and returns, and enable XinRen to lock in a lower cost structure as well as widen its lead over PRC peers.

The acquisition will more than double grp’s smelting capacity to 722,000 tpa and enhance XinRen’s lead as an integrated upstream player in aluminum production. Grp will have a second call option to buy another 30% stake in CLI after completing the purchase of the first 21% shareholding interest.

Grp intends to finance the acquisition through both internal funding and external borrowings. Option agreement is yet another strategic step undertaken by XinRen to expand as well as integrate its operations more comprehensively, thereby enhancing profitability.

We note that move could be positive for grp, in an industry where the govt has been curbing smelting capacity, in a bid to phase out unproductive and cost inefficient smelters.

Perennial China Retail Trust

2012-02-08T16:33:00.000+08:00

Perennial China Retail Trust: Possible play in the future? Following CMA’s run-up.

Recall Kim Eng’s selling pts today on CMA, citing that as more of grp’s malls become stabilized, expect CMA’s earnings to grow at 18% CAGR over the next five years, adding that CMA’s exposure to China is often misunderstood as China has always been a medium- to long-term objective, considering that most of its malls there are still not completed or stabilised, as was communicated during its IPO.

Add that overtime, the value proposition of its China portfolio will become more evident and compelling as more malls contribute more meaningfully to its NPI. CMA’s current share price suggests that the market has written off its China exposure.

Note that the above catalysts sounds similar for Perennial Trust, which has been trying to expand its asset base at an attractive price vs latest valuations by other retail landlords and also strengthen its retail presence and build its tenant network in Chengdu.

Post acquisition, Chengdu will account for about 41% of grp’s attributable GFA. DBSV also believe that investors will be able to enjoy a strong total return derived from NAV growth as well as yield when its malls are gradually developed and ramped up. At the current share price, the market is valuing PCRT’s existing portfolio at below replacement cost, at Rmb6,320psm. DBSV has TP of $0.84.

Also recall that Wilmar’s CEO Kuok Khoon Hong (director of PCRT), had actively accumulated the stock in open mkt from $0.52 down to $0.39 few mths ago, his last purchase was around $0.46, while notahle investors like Alan Wang are stake holders in PCRT.

Interra Resources

2012-02-08T15:54:00.001+08:00

Interra Resources surges 39.5% to $0.30, the highest since 2007, after two analyst reports tout it for Myanmar exposure. CIMB tips the oil stock as a cheaper Myanmar play at 17x historical P/E, vs property stock Yoma's 37.2x. House believes Interra has earnings potential if the company executes well. Tips a Technical Buy on the weekly chart's bullish breakout flag pattern with stock topping out around $0.275-0.33 resistance.

UOB KayHian also highlights Interra as Myanmar's largest onshore oil producer with gross prodn of 2,500 bpd. House notes Interra is investing to drill deeper wells to boost prodn by 10-15%. Tips the stock as overbought but it has since surged past the house's $0.28 upper-bound target. No ratings given by both houses.

We like to highlight that Interra has interests in 3 marginal oil fields in Myanmar and Indonesia and the share of prodn form its Myanmar oil well is is about 550 bpd vs the gross prodn of 2,200 bpd. Total share of oil prodn from all 3 fields is about 900 bpd, which gives it an estimated revenue of US$33m based on average sale price of US$100 per barrel of oil and net profit of under US$4m. At $0.30, stock trades at P/B of 1.7x.

Ausgroup

2012-02-08T11:46:00.001+08:00

Ausgroup: Rio Tinto, the world’s 3rd largest mining company, and partners has approved a US$3.4b expansion of its iron ore operations in Western Australia as part of a plan to boost output by more than 50%. Rio Tinto will spend US$2.2b to extend the life of the Nammuldi iron ore mine in the Pilbara region to increase prodn capacity to 283m tpa by 2H13.

This is positive news for Ausgroup, which has in Oct 11 secured a $22m contract from Rio Tinto to construct an iron ore pilot plant at the Brockman mine located in the Pilbara region and is well-positioned to ride on the aggressive expansion plans of Rio Tinto in Western Australia. The group has on hand an orderbook of A$300m. Stock currently trades at 0.93x P/B with no broker coverage.

STX OSV

2012-02-08T11:43:00.001+08:00

STX OSV: (Alert) Share price seeing some action over the last few mins.
Recall that Co. will be annoucing its results release on 14th Feb, Tuesday after mkt close.
This will be one of the very few times Co's mgt will be conducting a .physical briefing in SG (In the past it was only via Tele-conference), raises curiosity if Mgt has something important/interesting to annouce regarding a potential sale of the Co. by the STX Grp

Raffles Edu

2012-02-08T11:24:00.001+08:00

Raffles Edu: From a pure technical standpoint, the stock appears to be testing its $0.495 resistance after a 6-month consolidation and is poised to stage a breakout above $0.50 towards the next target at $0.58 if there are no earnings shocks from its 4Q11 results due today after market close. Momentum indicators are also looking positive with upward sloping RSI.

Elektromotive

2012-02-08T11:03:00.001+08:00

Elektromotive: (Co. Highlight) Co. has been going round the different security houses to promote investor’s awareness to highlight Co. on its radar screen. Backing on the connections of Price Hakeem, the Co.provides electric vehicle charging stations, Food & Beverage (F&B) and media services, although Co. is in the midst of phasing out its (F&B) division as Co. focuses on its Electric vehicles business.

2H12 results are unlikely to excite as Co. transitions to focus on its electric vehicles (EV)- related business, however mgt has guidance to look forward to FY13 results which will show the potential of its EV charging business. According to mgt, Co has guidance for enormous returns over the nxt few yrs, citing 2012 as the yr of the EV, as major car makers start to roll out new and more appealing EV Car models.

4 key catalysts that ignite interest in this stock are:
1) Any announcement of a tie-up with automotive makers
2) Announcement with back-end players in the EV charging business
3) Announcement with power supply companies that provide the electricity necessary for charging such vehicles, and
4) successful IPO exercise by its competitor, ChargeMaster, in London.

Tiger Airways

2012-02-08T09:53:00.001+08:00

Tiger Airways: Announced late Tue it has started searching for a new CEO to replace Chin Yau Seng, who asked to return to SIA. CIMB add that the move suggests operations have stabilized; "if they weren't stable, he wouldn't have wanted to leave," adding "it's good they're planning a succession early on.

Mr Chin will stay for another six mths. It's sufficient time for him to complete his task, improving internal processes and governance. House rates the stock at Trading Buy with a $0.87 TP. The YTD high of $0.74 is likely a near-term cap.

TTJ

2012-02-08T09:52:00.001+08:00

TTJ: Has secured approx $19m in new contracts to supply structural steelworks, civil defence shelter doors and other services for diverse mix of projects in Singapore. These projects are to be completed by FY2012-13.

The projects include fabrication of king posts for Capitol Building and an office building at 146 Mkt Str, as well as the proposed redev of Specialists' Centre/Hotel Phoenix/Orchard Emerald. TTJ will also be involved in supplying and installing civil defence shelter doors for MRT Downtown Line 2. Lastly co will undertake a structural steelworks project for a warehouse in Jurong Island for Hitachi.

Co has a current order book of $200m which will last till FY2013 and trades at current P/E of 4.2x.

LionGold

2012-02-08T09:51:00.002+08:00

LionGold: Issues profit warning and expects substantial increased losses in 3Q11 compared to prev quarter. The factors for the increased loss is from impairment of goodwill in its Mali invts, cost and expenses associated with gold mining activities in Mali, provision for amts, fees and expenses due to The Chinese Society of Environmental Sciences for co’s proposed acquisition of Signature Metals.

While the amount written down by impairment of goodwill is not known, this highlights the speculative element in LionGold’s assets where the investment in Mali was made less than a year ago. Currently LionGold is still loss making.

FSL Trust and Berlian Laju

2012-02-08T09:51:00.001+08:00

FSL Trust and Berlian Laju: The lessees of 3 chemical tanks have defaulted on their lease payments to FSL Trust by not making payment for Feb 2012. The lessees are wholly-owned subsis of PT Berlian Laju Tanker. The leases were for a 12 yr bareboat charter until 2018. Payment has been demanded by no later than Mar 2012. The default will cause the NTA per unit to decrease by US$0.03 from US$0.53 to US$0.50 and the lessees contributed approx 12.8% of FSL Trust revenue. Still FSL expects to be able to service its own debt obligations despite the default.

Fitch also expects the number of ship owners facing financial distress to increase with the nxt yr. The Baltic Dry index has declined 60% since the start of Jan and companies are defaulting on those contracts and renegotiating rates.

Interra Resources

2012-02-08T09:50:00.001+08:00

Interra Resources: UOB Kay Hian recently met up with the mgt of Interra Resources.
Note that Interra is an energy exploration and production (E&P) Co. in Myanmar and Indonesia. The share price had a spectacular run in Jan-Feb 12, gaining close to three-fold from the low of 0.88 S cents/ share in Nov 11.

In house view, this is largely due to a macroeconomic change in the political scene in Myanmar, including the recent release of political prisoners by the government, the historic visit by the US Secretary of State Hillary Clinton and the lifting of investment restrictions on Myanmar by several countries.

On the weekly chart the stock has broken the downtrend resistance line. Think the trading range is likely to be between S$0.185 and S$0.28 with an immediate resistance at $0.24. Prices are likely to retrace as the stock could be overbought for now.

YingLI

2012-02-08T09:49:00.002+08:00

YingLI: DBSV maintains BUY with $0.52 TP. Note that Chongqing, ‘the next Shanghai’ is attracting new projects by prominent Asian property developers. As an incumbent and early entrant, Ying Li is well positioned to ride on Chongqing’s economic growth and rising importance as Western China’s gateway city. With IFC completed, the focus is on Da Ping and Chongqing Financial Street projects. TP ased on 40% discount to RNAV.