LionGold

LionGold: Details on placement. Proposed private placement of 42m new shares at $1.057 each a disc of approx 9.94% to VWAP at $1.1737 on 28 Sept 2012. Each share will allow subscription for one detachable warrant at price of $0.065. 22m shares will be handled by DMG and 20m will be handled by Global Resource Funding LLC. The placement will raise approx S$46.87m net of fees and expenses

Breadtalk

Breadtalk: Grp CEO note that co. is now in 46 Chinese cities, with plans to go into 3 to 5 more cities every yr, tapping into the opportunities opened up by the urbanization of second-tier cites. Retail sales of baked goods in China are expected to reach US$1.8b by 2015, drawing many Chinese and foreign co’s for a slice of the growing pie. Retail sales of bread, cakes, pastries and other baked products in China were US$1.2b in 2010, double the amount in 2000. This upward trend appears to be set to continue, given the increasing number of middle-class consumers and changing lifestyle habits influenced by Western culture. Grp add that in China, it has ard 300 retail stores (and) in Shanghai, it is close to 40 outlets. From the first outlet grp opened until now, all the shops continue to register five to eight% growth in sales. Sales are not diluted because of the increase in outlet numbers. Eventually grp plans to open 200 outlets in Shanghai.

Rubber / GMG

Rubber / GMG: Thailand, Indonesia and Malaysia, accounting for 70% of global output, agreed to cut shipments by 300k mt, starting yday. That’s as much as China, the biggest user, imports in ~5 wks and exceeds the 2013 supply surplus forecast by the International Rubber Study Group (IRSG). Producers are cutting output to boost prices that tumbled 51% since reaching a record in Feb ‘11 because of a supply glut and weaker economic growth. When they reduced cargoes in 2009, futures more than doubled that year. Bloomberg consensus estimates Tokyo-traded futures, a global benchmark, will advance 15% to ¥300/kg (US$3,845/ ton) by yr end. Commodity derivatives sales desk at Newedge Japan notes, “The bear market is over”. Tokyo based fund mgr, Astmax echoes, “rubber has bottomed out; the uptrend is set to continue.” Watch for a move in rubber prices which could translate to positive moves in GMG’s share price. GMG is amongst the few listed rubber producers globally.

Biosensors

Biosensors: Co and Terumo will extend their existing licensing arrangements. Terumo will be able to continue to incorporate co's BioMatrix tech in Terumo's drug-eluting stent. Biosensors and Terumo have agreed to extend the original licensing agreement for territories outside of Japan until Dec 2014. Terumo uses both the drug and stent developed by Biosensors under its Nobori DES system which is sold in over 20 countries across the world. CIMB maintains Outperform with TP$1.82. Co’s royalty income from Terumo is btwn US$4m to 5m a quarter and with co operating more successfully in key mkts worldwide, it is in Terumo’s interest to clinch a more lucrative deal for Biosensors. While revenue contribution may not be substantial, royalties will add to gross margins due to zero additional costs. House highlights that Biosensors has been taking mkt share from peers and seems inconceivable that no players will offer to collaborate or even acquire it with or tgt with major sh/h Shandong Weigao. ASP declines in Gansu and Zhejiang have been observed but should be mitigated by ASP decline.

Tiger Air

Tiger Air: signs MOU with long haul low cost carrier Scoot, to cross sell “join itineraries” – a single ticket for travel between Australia (Sydney, Gold Coast) and Asia (Phuket, Ho Chi Minh City, Kuala Lumpur), via Singapore. Although a single ticket will be issued for all flights, at this point, passengers will still have to pass through customs and immigration and check in again for the second leg of the journey. Credit Suisse believes this is a positive long-term development for Tiger, but views the initial impact to be muted given the limited number of destinations initially. Believes fees from a future ‘transfer’ service between flights (no need to check in twice) could significantly enhance revenues from this partnership. Nevertheless the house expects this to have a meaningful impact only in FY14 and beyond. Adds, the share price more than reflects Tiger's recovery prospects, which have been clouded by intensifying price competition in Australia. Maintains Underperform with TP $0.70. DMG also believes any earnings impact will be minimal at this point in time as the rise in load factor will be offset by lower yield assumptions on short term competitive pressures. Raises TP marginally from $0.75 to $0.76, but downgrades the stock to Neutral on valuation grounds. CIMB maintains Neutral with TP $0.81.

SG Market (02 Oct 12)

SG Market: S’pore shares may rebound on the Wall Street bounce on the surprise pick-up in US factory activity even as the world's major economies continue to contract. The benchmark STI will face topside resistance at around 3080 while the convergence of the 20 and 50-day moving averages at 3040 level will provide underlying support. Among stocks in focus, Tiger Airways may see interest after announcing a partnership with Scoot, the budget long-haul carrier of SIA to jointly sell itineraries. Biosensors may also be in the limelight after extending its BioMatrix licencing agreement with Terumo till Dec 14. Myanmar plays may continue to rally ahead of an investment summit in Yangon on Oct 17.

Heeton / KSH / Tee

Heeton / KSH / Tee : Sky Green condo will be holding its VVIP preview estimated 18 Oct, Thurs. The premarketing is going on till launch date. Understand ~60 cheques have been collected to date, vs total of 176 units at the devt. Ownership of the project is split as follows, Heeton 40%, KSH 25%, Tee 20% and Zap Piling 15%. Sky Green sits on a 66,932 sf freehold land parcel located on MacPherson Road. It has a 2.1 plot ratio, which allows the new devt to be built up to 24 storeys. Max gfa of the site is 140,557 sf. Avg purchase price of the site works out to ~$750 psf ppr, incl devt charge. Indicative pricing for units is ~$1600 psf, which compares with the $1800 psf pricing for the freehold Katong Regency just 2 Circle MRT line stops away. Based on an est construction & mktg cost of $350 psf ppr, a back of envelop calculation suggests project net profit could be as high as $70m, with project net margins as high as 36%. Heeton’s net profit contribution would be an est $28m, vs FY11 net profit of $25.5m KSH’s net profit contribution would be an est $17.5m, vs FYMar12 net profit of $20.4m. Tee Int’l net profit contribution would be an est $14m, vs FYMay12 net profit of $19.1m. This is not the only partnership btwn the 3 property developers. Recent projects as follows -- The consortium comprising Heeton, KSH, Tee, Futuris and Zap will redevelop the Sam Leong Mansion site acq for $40.3m. The consortium btwn Heeton, KSH and Zap will redevt the Whitley Road site acq for $31m. The consortium comprising Heeton, KSH, Zap and Oxley will redevelop the freehold commercial building at 11 King Albert Park acq for $150m. Share prices of Heeton, KSH, Tee Int’l have recently hit 52 wk highs, an indication positive price momentum. Recall we have been highlighting that the smaller property developers have been forming consortiums to reduce individual project risk, allowing them to participate more aggressively in the property upcycle.