Friday, April 1, 2011
Otto Marine
Otto Marine: DnB NOR reiterate Sell with $0.23 TP. Note that recent vessel sale price of USD22m each is inline with the USD23m NAV. However, as the charter-back dayrate has not been disclosed, it is hard to assess the sale price. Add that the sale to a third party also highlights that Otto Marine is a more of a low/mid-end yard, rather than a high-end yard.
CapitaMall Asia
CapitaMall Asia: IIFL reiterate Add with $2.24 TP. Tip grp as proxy to China consumer, offering exposure to China’s suburban retail consumption story, which is more favourable compared to the cloudy outlook for the residential sector over the nxt 2yrs. Add that CMA has executed its strategy well, and saw significant operational improvement in key assets (FY10 occupancy rate of 95% and NPI growth of 19% YoY, for China malls) during recent site visits….
Valuations are compelling, with grp currently trading at 1.1x FY11E P/B ratio, lower than its SG peers of 1.25x, and Hang Lung 1.37x.
Valuations are compelling, with grp currently trading at 1.1x FY11E P/B ratio, lower than its SG peers of 1.25x, and Hang Lung 1.37x.
Banks
Banks: SG bank lending in Feb +1.6% YoY to $334.1b, as business loans continued to expand rapidly even as consumer home loans grew more slowly. Total SGD bank loans outstanding at end Feb +17.3% YoY, the biggest increase since Nov08, led by broad-based growth in loans to businesses +2.3% MoM and +16.1% YoY to $179.3b at end Feb. Bldg and construction loans +3.6% MoM to $55.5b, the biggest jump since Jun08, while loans to non-bank financial institutions +2.7% MoM to $40.2b…..
Consumer loans expanded more slowly MoM in Feb, due mainly to a smaller rise in housing and bridging loans. Total consumer loans +0.9% MoM, while housing and bridging loans +1% MoM to $115.2b, the slowest mthly growth since Feb 10. Both car loans and credit card lending -0.6% mom to $11.6b and $6.79b respectively…..
BNP Paribas note that at current levels, SG banks are priced at historical P/E mean and rising SIBOR should catalyze share prices higher, a likely scenario towards the end of this yr. House preferred pick is OCBC, TP$11.05, due to its well-executed corporate strategy and consistent delivery….
Macquarie remains overweight on SG banks, citing reasonable valuations and strong capital positions. Have Outperform ratings on UOB and OCBC, citing attractive exposure to higher margins and growth Asean mkts. While recognizing the positive impact of DBS’s new management, retain Neutral rating on the stock given the structural issue of its exposure to low margin markets, as well as the M&A uncertainties.
Consumer loans expanded more slowly MoM in Feb, due mainly to a smaller rise in housing and bridging loans. Total consumer loans +0.9% MoM, while housing and bridging loans +1% MoM to $115.2b, the slowest mthly growth since Feb 10. Both car loans and credit card lending -0.6% mom to $11.6b and $6.79b respectively…..
BNP Paribas note that at current levels, SG banks are priced at historical P/E mean and rising SIBOR should catalyze share prices higher, a likely scenario towards the end of this yr. House preferred pick is OCBC, TP$11.05, due to its well-executed corporate strategy and consistent delivery….
Macquarie remains overweight on SG banks, citing reasonable valuations and strong capital positions. Have Outperform ratings on UOB and OCBC, citing attractive exposure to higher margins and growth Asean mkts. While recognizing the positive impact of DBS’s new management, retain Neutral rating on the stock given the structural issue of its exposure to low margin markets, as well as the M&A uncertainties.
Healthway
Healthway: Grp proposed a 1-for-8 non-underwritten rights issue of up to 230.6m shares at an issue price of 7.5c/share. If fully subscribed, grp will record $17.05m net proceeds. Proceeds will be used to fund the expansion of its network of medical centres and facilities in Spore, China and Asean, and also for general working capital. Based on yesterday’s closing price of $0.13, new enlarged share base could see share price trade at 0.12-0.125c.
STX OSV
STX OSV: Announced it has been granted environ license for construction of new shipyard in Brazil. Shipyard construction is expected to start within 2Q11, with construction of first vessels estimated to start in 2012 and full operations scheduled for 2013. First project to be realized will be the construction of eight LPG carriers. Upon completion, new yard will be utilized for OSV construction, approximately tripling STX OSV’s delivery …
We note that announcement bodes well for grp, given strong presence in Brazil (one yard) and in-line with grp’s plans to ramp up operations, on back of growing dd for high-spec OSVs, suited for deep sea E&P and as Petrobas begins ramping up production. Yard will complement existing rig builder yards, eg Kepcorp and Sembcorp Marine, who competes in diff segments of the O&G value chain. Street has unanimous Buy Call on grp with mean TP of $1.67.
We note that announcement bodes well for grp, given strong presence in Brazil (one yard) and in-line with grp’s plans to ramp up operations, on back of growing dd for high-spec OSVs, suited for deep sea E&P and as Petrobas begins ramping up production. Yard will complement existing rig builder yards, eg Kepcorp and Sembcorp Marine, who competes in diff segments of the O&G value chain. Street has unanimous Buy Call on grp with mean TP of $1.67.
Ascendas Reit
Ascendas Reit: to lift halt at 9am.
Says it is buying a property at Biopolis from its sponsor, Ascendas, for $125.6m. Mgt guides for the latest property purchase to be yield accretive, to add 0.03 cts to DPU for FYMar10 on an annualized pro forma basis, assuming funding with 40/60 debt-equity ratio…
Separately, AReit will issue 206.2m new units (11% of existing shares out) at $1.94 apiece to raise ~$400m in gross proceeds. The final placement price is in the middle of the indicative price range of $1.91-1.96 announced earlier, and is at a 4.9% discount to last close at $2.04. The placement was 2.55x oversubscribed. The bulk of the proceeds will go towards buying the Biopolis property, while $117.6m will be used for the forward purchase of a property in Shanghai announced earlier,… $97m for asset enhancement works at other properties, and $35.9m to fund a development project.
Pending the deployment of the net proceeds from the private placement, the aggregate leverage could go down to 25.1%, vs 32.6% (assuming recent revaluation gains of $307.6 m are taken into account)…
Lastly, AReit added that it is in talks to purchase a portfolio of properties worth around $200m, and the transaction might be completed in the next 3-6 months.
Reit last traded at 6.8% FY11E yield.
Post announcement, Street mostly retains Overweight/Neutral ratings, with TP ranging btwn $2.15 - 2.55.
Says it is buying a property at Biopolis from its sponsor, Ascendas, for $125.6m. Mgt guides for the latest property purchase to be yield accretive, to add 0.03 cts to DPU for FYMar10 on an annualized pro forma basis, assuming funding with 40/60 debt-equity ratio…
Separately, AReit will issue 206.2m new units (11% of existing shares out) at $1.94 apiece to raise ~$400m in gross proceeds. The final placement price is in the middle of the indicative price range of $1.91-1.96 announced earlier, and is at a 4.9% discount to last close at $2.04. The placement was 2.55x oversubscribed. The bulk of the proceeds will go towards buying the Biopolis property, while $117.6m will be used for the forward purchase of a property in Shanghai announced earlier,… $97m for asset enhancement works at other properties, and $35.9m to fund a development project.
Pending the deployment of the net proceeds from the private placement, the aggregate leverage could go down to 25.1%, vs 32.6% (assuming recent revaluation gains of $307.6 m are taken into account)…
Lastly, AReit added that it is in talks to purchase a portfolio of properties worth around $200m, and the transaction might be completed in the next 3-6 months.
Reit last traded at 6.8% FY11E yield.
Post announcement, Street mostly retains Overweight/Neutral ratings, with TP ranging btwn $2.15 - 2.55.
SG Market
SG Market: Spore share may pull back as technical indicators approach overbought levels after strong 2-week run-up & STI is hitting resistance at around 2110 level. A consolidation phase to test support at 3060 may be needed before a next move to 3180, provided there are no more major shocks from Mid-East or Japan.
With oil prices heading higher & rig replacement cycle kicking in, the offshore players like KepCorp, SembMarine, Cosco & STX OSV will remain in play. A-Reit may ease after pricing its private placement at $1.94 or 4.9% discount to last close. STX OSV may rise after getting license to start a 2nd shipyard in Brazil. NextGenSat proposing a placement of 300m new sahers at 6¢ to fund acqn China Unifiednet, a China satellite company.
With oil prices heading higher & rig replacement cycle kicking in, the offshore players like KepCorp, SembMarine, Cosco & STX OSV will remain in play. A-Reit may ease after pricing its private placement at $1.94 or 4.9% discount to last close. STX OSV may rise after getting license to start a 2nd shipyard in Brazil. NextGenSat proposing a placement of 300m new sahers at 6¢ to fund acqn China Unifiednet, a China satellite company.
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