Tuesday, June 16, 2015
OCBC (technical)
OCBC: Still trading within the downward trend channel, with resistances above the $10 levels, and near term support around $9.95. Stronger support at the bottom end of channel, at around $9.80
UOB (technical)
UOB: Long term uptrend no longer intact after the counter failed to hold above the support at the $23.00 level. Continued selling pressure may occur in the near term, reflected in the shooting star candlestick on 11 Jun, further confirmed by the gap down two days later. Support at the recent low of $22.60, followed by $21.50.
DBS (Technical)
DBS - Technicals appear to be on a downtrend, as indicated by both STochastics and RSI. Share price just broke past the 20 day MA at $20.59, and a close below it could indicate further downside. The 200 day Ma at $19.67 will be the critical support.
Fu Yu
Fu Yu: Management is keen to reward shareholders with a maiden dividend upon approval of capital reduction with a payout of 0.5 cent at the upcoming AGM in July. They are also bullish on the medical, environment and automobile products, especially from clients in the medical and environment space. The company is keen to expand contributions from the automobile sector and is already in talks with several parties at the moment.
Fu Yu may be a potential key beneficiary of 3D printing in the future as both HP and Venture Corp are its existing customers and Fu Yu is one of the key plastic manufacturers for HP.
With rich cash flow generation from operations of $20m-$30m a year, RHB believes Fu Yu is a cash cow ready for milking and that FY15 will likely be a key inflection point to reap gains for this treasure chest.
RHB maintains its BUY rating with TP: $0.30 (WACC: 12%, TG: 0%).
Fu Yu may be a potential key beneficiary of 3D printing in the future as both HP and Venture Corp are its existing customers and Fu Yu is one of the key plastic manufacturers for HP.
With rich cash flow generation from operations of $20m-$30m a year, RHB believes Fu Yu is a cash cow ready for milking and that FY15 will likely be a key inflection point to reap gains for this treasure chest.
RHB maintains its BUY rating with TP: $0.30 (WACC: 12%, TG: 0%).
Frasers Centrepoint
Frasers Centrepoint: CIMB recently visited some of Frasers Australand’s projects in Sydney and Melbourne and met with senior management. Management indicated that integration of Frasers Property Australia and Australand is largely completed and possibility of rebranding is still being evaluated. While recurrent income remains key to the FCL group, Frasers Australand is looking to ramp up the development portion of the business to 50% of asset value from the present 40% as accelerated residential and industrial development activities consume its landbank.
Based on current development pipeline, these 2 segments are projected to have a total end value of S$9.7bn vs current value of S$2.4bn. Residential demand is supported by low interest rates and undersupply in Sydney and Melbourne while renewal and relocation demand from retail and logistics players underpins appetite for industrial space.
CIMB maintains its ADD rating on Frasers Centrepoint (TP: $2.02) as the stock is trading at a steep discount of 38% to its RNAV of $2.88. The key catalyst would be an increase in the stock’s low free float.
Based on current development pipeline, these 2 segments are projected to have a total end value of S$9.7bn vs current value of S$2.4bn. Residential demand is supported by low interest rates and undersupply in Sydney and Melbourne while renewal and relocation demand from retail and logistics players underpins appetite for industrial space.
CIMB maintains its ADD rating on Frasers Centrepoint (TP: $2.02) as the stock is trading at a steep discount of 38% to its RNAV of $2.88. The key catalyst would be an increase in the stock’s low free float.
Midas
Midas: Its JV company, Nanjing SR Puzhen Rail Transport Co. Ltd (NPRT), has secured RMB2.1b worth of metro and tram contracts in China. Delivery of the metro trains and trams is scheduled across 2016 – 2017, and these contracts are expected to contribute positively to Midas’ financial performance for FY16 and FY17.
OCBC kept their forecasts unchanged and currently have a HOLD rating with a TP: $0.375.
OCBC kept their forecasts unchanged and currently have a HOLD rating with a TP: $0.375.
Mapletree Greater China Commercial Trust
Mapletree Greater China Commercial Trust (MGCCT): MGCCT proposed acquisition of business park, Sandhill Plaza, in Shanghai for S$412.2m (CNY188.1m), which translates into an initial NPI yield of 3.85%. Sandhill Plaza is a premium quality business park with a total GFA of 83,801.48 sqm and is situated within the mature northern zone of the Zhangjiang Hi-Tech Park, which is part of the Free Trade Zone in Shanghai. Management intends to fund this acquisition with existing banking facilities. Thereafter, MGCCT’s gearing ratio is expected to increase from 36.2% to 40.6%.
On a pro forma basis, DPU for the 12 months ended 31 Mar 2015 would remain relatively flat (from 6.543 cents to 6.55 cents) after this acquisition. Management clarified that the pro forma figures are not reflective of the potential of the asset, as operationally, the property had not yet stabilised during that period, with an average occupancy of just 73%. As at 31 Mar 2015, Sandhill Plaza’s occupancy rate had improved to 96.2%. Major tenants include Broadcom, Disney and Borouge. Sandhill Plaza is 10% below the average rental of its comparable basket (premier grade A, higher quality specs buildings). Management is targeting to grow the NPI yield of this asset to >5%.
OCBC upgrades its rating from HOLD to BUY with TP lifted from $1.07 to $1.11 as the house sees the company as value emerging, after MGCCT’s recent share price correction. The stock also offers a prospective FY16F distribution yield of 7.1%.
On a pro forma basis, DPU for the 12 months ended 31 Mar 2015 would remain relatively flat (from 6.543 cents to 6.55 cents) after this acquisition. Management clarified that the pro forma figures are not reflective of the potential of the asset, as operationally, the property had not yet stabilised during that period, with an average occupancy of just 73%. As at 31 Mar 2015, Sandhill Plaza’s occupancy rate had improved to 96.2%. Major tenants include Broadcom, Disney and Borouge. Sandhill Plaza is 10% below the average rental of its comparable basket (premier grade A, higher quality specs buildings). Management is targeting to grow the NPI yield of this asset to >5%.
OCBC upgrades its rating from HOLD to BUY with TP lifted from $1.07 to $1.11 as the house sees the company as value emerging, after MGCCT’s recent share price correction. The stock also offers a prospective FY16F distribution yield of 7.1%.
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