Super Grp

Super Grp: DMG downgrades from Buy to Neutral lowering TP from $2.18 to $2.12 on a recent spike in prices of coffee beans. FY2012 earnings have been cut by 4% to $68m due to headwinds from higher prices which avg US$2125 per ton. Any upside potential will come from better margins from improved product mix and higher dividend payout ratios with downside risks on higher material costs

HK Land

HK Land: Barclays expects Hong Kong's Central office rents to lag any overall market recovery due to the continued decentralization trend, the financial-service sector employment concentration and concentration of vacant and 'excess' space in Central Hong Kong. Notes Central Grade-A office vacancy was 4.3% at end-May vs 3.5% for the overall market. Says, the diminishing availability of low-cost Central options should translate into pressure for HK Land's portfolio, but near-term low supply and prime spaces' high pre-commitment rate remains supportive of office rents and should prevent any dramatic decline in rentals. Also sees further downside risk to HKL's increasing exposure to China residential development, currently at 13% of NAV. Raises HKL's TP to US$6.04 from US$4.40 after removing assumptions of a hard-landing for Hong Kong's economy, but keeps an Equalweight rating. The stock is down 0.5% at US$5.77.

Wilmar

Wilmar: +4.5% at S$3.71 on strong volume, the best-performing STI component despite lacking fresh news, outperforming commodity plays' regional risk-on rally. DBSV note that it's just been oversold. On a fundamental basis, don't see the share price going as low as it did a few weeks back, primarily because house expect some uplift in earnings in 4Q this year, mainly due to the expansion of refining capacity in Indonesia. Add that in context of second-half results, they should be much better. The fiscal-2Q results' disappointment "makes the share-price appreciation a bit harder, given whatever upside there is would be capped by people wanting to get out of the stock. So the catalysts are still a few months away. House has TP of $4.25.

Cosco / Yangzijiang

Cosco / Yangzijiang: Recall recent newsflow that Nasdaq-listed FreeSeas, a Greek shipowner, has defaulted on payments for two newbuild bulk carriers being built by Yangzijiang, after its financier ABN Amro terminated the financing agreement for the newbuild vessels. DBSV says while the financial impact of the cancellation of the two vessels is small, accounting for only 1% of YZJ's order book of US$4.5b (96 vessels), the cancellation will still be negative on sentiment as this is YZJ's first contract cancellation on default (even during the 2008-09 crisis, none of YZJ's contracts was cancelled). Notes, among the SGX-listed yards, Cosco has the highest exposure to Greece and Europe at > 60% of orderbook while Yangijizang would be the least affected among Chinese yards. Adds, avoid Cosco shares, as they are likely to underperform the market on concerns about their European exposure.

UOL/MCT

UOL/MCT: UOL will be included in the FTSE EPRA/NAREIT Global Developed Index (and Pure Asia Index) from Monday, with an index weightage higher than CMA and Keppel Land. In the days following the announcement of its inclusion, the stock jumped 16.6%, and vol on Friday clocked in at their highest levels since March 2005. UBS expect that this index inclusion would bring increased institutional investor interest and recap the key investment thesis for UOL Group. To recap, house estimate 90% of UOL’s assets are in SG. 16% of its RNAV is in SG residential, but its asset-turn strategy has meant 75% of this has been pre-sold. Its directly-held investment properties are in fringe office (15% of RNAV) and fringe retail (12% of RNAV), which gives its assets a more defensive tenant profile. Gearing of 33% gives it sufficient financial strength to replenish its landbank. House maintains Buy and increases TP to $5.73 based on SOTP, with a 15% discount to RNAV and 10% discount to listed entities. Similarly, MCT will also be added to the index.

Telco

Telco: Credit Suisse sees positive indications for Next gen Nationwide Broadband Network (NBN) progress to accelerate. Says coverage is increasing, pricing is more competitive, while the “ecosystem” for fibre broadband services is also growing. Expects NBN penetration to reach 29% by end 2013e and 47% by end 2015e. The house views M1 as the key beneficiary, given an opportunity to penetrate the fixed line segment where it has limited exposure. Upgrades M1 to Outperform with TP $3, as it offers good medium term growth from mobile data and NBN, with attractive 6% div yield. Says Starhub may face higher pressure in residential, but this could be offset by opportunities in the corporate segment. Keeps at Neutral with TP $3.25, with solid yield to provide support. Expects SingTel to face pressure on both sides, as it needs to focus on developing new services / VAS to differentiate and maintain its revenue. Says SingTel’s significant regional diversification means the NBN impact to the group is not expected to be very material and its key growth driver remains its regional associates. Sees downside risks to consensus from foreign exchange headwinds; maintains Neutral with TP $3.19.

CWT

CWT: UOB Kay Hian maintains Buy and increases TP to $2.09 from $1.80 after meet up with mgt. Key pts as follow: 1) New growth driver from commodity trading: See this area as a potential new area for CWT’s future growth. This is a natural progression given its presence and experience in commodity logistics, which provide CWT with natural advantages such as trading information flow and strong existing relationships with upstream and downstream Co’s. 2) Managing the risk. Although investors are likely to be sceptical of CWT’s venture into commodity trading, believe mgt has taken adequate steps to safeguard its exposure. In addition, grp does physical hedging rather than pure hedging with a net exposure Leverage for its commodity trading arm is “ring-fenced” at the subsidiary as it uses non-recourse financing, with no ultimate liability to CWT. 3) Warehousing update. Grp recently undertook a sales and leaseback transaction on its Pandan Logistics Hub, which will result in a deferred gain of S$11.8m. This is expected to be recognised over the next 3-4 years. In terms of capacity, the group has recently started construction of Cold Hub 2, which is targeted for wine storage. 4) Consolidation phase. After its M&A phase over the past two years, understand that mgt’s current focus would be to integrate its new investments and focus on organic growth for its existing businesses in freight and logistics. Overall, conclude that CWT remains attractive for its global exposure to trade, dominance in logistics niches and strong financials. Although investors could be concerned about its venture into commodity trading, believe this is reflected in its undemanding valuations.