SGX: may pull back after reporting disappointing 1QFYJun11 net profit of $74.2m, -21% yoy, -6.8% qoq. This compares with consensus expectations of $82.3m. Earnings dropped due to combination of lower securities daily avg trading value and higher operating expenses arising from technology upgrades…
But downside may be limited as mgt gives optimistic outlook. Says if current mkt conditions prevail, SGX should benefit from increase in capital mkt activities (both higher trading activity, more cos seeking to raise capital). Upcoming initiatives such as ADRs listing on Oct 22, retail investors' corporate bond trading, introduction of Chi-Next the first pan-Asia dark pool venture, all point to higher revenue for SGX going forward. Quarterly div of 4cts/sh further reflects mgt’s confidence...
The majority of Street has Buy rating on stock, with latest targets ranging btwn $10-11.20. Pullbacks may present opportunities to accumulate.
Monday, October 18, 2010
Global Logistics Properties
Global Logistics Properties: Could rise on debut today with offering 12x oversubscribed, shows investors keen to get behind government-backed entity with exposure to high-growth China market. Valuation also undemanding, with IPO priced at $1.96, representing 1.09x P/B, vs Asian developers with exposure to commercial property development in China, Japan trading at 1.31x-3.0x P/B. Based on low end of this range, minimum upside could be 20%-30%....
Market talk, although we cannot confirm, is that the Grey market for the IPO is within the range of $2.04-$2.15, representing a (4.5-9.6%) upside.
Market talk, although we cannot confirm, is that the Grey market for the IPO is within the range of $2.04-$2.15, representing a (4.5-9.6%) upside.
SG Market
SG Market: STI may open tad lower, reflecting slight loss for DJIA on Fri, mostly weaker regional markets. Caution also likely to creep in after index's strong run to highest levels since May 08. Resistance tipped at May 2008 peak of 3,268, support at 3,136.
*All eyes will be on the mega listing of Global Logistics Properties this morning as subscription levels show hot demand given its undemanding valuations & exposure to high growth China market. Broad grey market range of betw $2.05-2.15 touted.
*SGX may underperform after releasing disappointing 1QFY11 results, which is ~10% below expectations but downside may be limited & even viewed as a buying opportunity as outlook remains upbeat with improving turnover & upcoming initiatives such as ADRs, dark pools, retail bond trading & clearing of OTC financial derivatives expected to drive higher revenues going forward. Support is at previous $9.60 resistance.
*Conglomerates KepCorp & SCI will continue to enjoy insti interest as sector seen as a market laggard with several foreign houses looking to upgrade the sector.
*Following the sharp rise in City Dev last week, rotational interest may switch to other property counters, which may play catch-up, such as OUE, Wing Tai, Ho Bee.
On the stock ratings front:
*KepCorp, KepLand, SCI & SembMarine all rated Buys at UBS with new target prices of $11.10, $5.05, $5.37 & $5.00 respectively.
*KepCorp rated Overweight, target price raised to $11.00 from $10.20 at Morgan Stanley
*SCI rated Equalweight, target price raised to $4.15 from $3.80 at Morgan Stanley
*SembMarine rated Overweight, target price raised to $5.15 from $4.80 at Morgan Stanley
*All eyes will be on the mega listing of Global Logistics Properties this morning as subscription levels show hot demand given its undemanding valuations & exposure to high growth China market. Broad grey market range of betw $2.05-2.15 touted.
*SGX may underperform after releasing disappointing 1QFY11 results, which is ~10% below expectations but downside may be limited & even viewed as a buying opportunity as outlook remains upbeat with improving turnover & upcoming initiatives such as ADRs, dark pools, retail bond trading & clearing of OTC financial derivatives expected to drive higher revenues going forward. Support is at previous $9.60 resistance.
*Conglomerates KepCorp & SCI will continue to enjoy insti interest as sector seen as a market laggard with several foreign houses looking to upgrade the sector.
*Following the sharp rise in City Dev last week, rotational interest may switch to other property counters, which may play catch-up, such as OUE, Wing Tai, Ho Bee.
On the stock ratings front:
*KepCorp, KepLand, SCI & SembMarine all rated Buys at UBS with new target prices of $11.10, $5.05, $5.37 & $5.00 respectively.
*KepCorp rated Overweight, target price raised to $11.00 from $10.20 at Morgan Stanley
*SCI rated Equalweight, target price raised to $4.15 from $3.80 at Morgan Stanley
*SembMarine rated Overweight, target price raised to $5.15 from $4.80 at Morgan Stanley
Friday, October 15, 2010
‘The Edge’ for this coming week
Key Company features on ‘The Edge’ for this coming week:
•Pacific Shipping Trust diversifies fleet, bets on shipping recovery
•New shareholder to take Biosensors on next leg of growth
•Hu An Cable prepares for TDR issue, aims to increase market share
•Pan-United sees rise in building-material demand in 2H, upswing in earnings
•Pilot crunch: As airlines buy more planes and fly new routes, can they match crew with capacity? Will a looming pilot shortage hurt budget carriers?
•Cap 1: Breaking out: Liquidity inflows to narrow valuation gap between STI and regional peers
•Soft commodities sector: Nomura’s Shori likes integrated supply chain managers, India’s edible oils players
•Anchun International expands capacity, strengthens R&D with IPO cash
Insider moves:
•Indonesian billionaire Low raises stake in Manhattan Resources
•Pacific Shipping Trust diversifies fleet, bets on shipping recovery
•New shareholder to take Biosensors on next leg of growth
•Hu An Cable prepares for TDR issue, aims to increase market share
•Pan-United sees rise in building-material demand in 2H, upswing in earnings
•Pilot crunch: As airlines buy more planes and fly new routes, can they match crew with capacity? Will a looming pilot shortage hurt budget carriers?
•Cap 1: Breaking out: Liquidity inflows to narrow valuation gap between STI and regional peers
•Soft commodities sector: Nomura’s Shori likes integrated supply chain managers, India’s edible oils players
•Anchun International expands capacity, strengthens R&D with IPO cash
Insider moves:
•Indonesian billionaire Low raises stake in Manhattan Resources
* Mapletree Industrial Trust *
Mapletree Industrial Trust: retail IPO application closes at 8am, Monday, Oct 18.
The Spore-based Reit owns 70 properties, comprising mainly flatted factories and industrial buildings, with total GFA of 1.5m sqm valued at $2.1bn…
Valuation and yields are attractive for the quality and size of its portfolio. At the IPO price, MIT is valued at 1.1x P/B and 7.6% yield, vs closest peer Ascendas Reit at 1.4x P/B and 6.5% yield. Pegging MIT to Ascendas’ valuation, we arrive at a fair value of $1.09.
More details can be found in our note on MIT.
http://kimengresearch.com/Companies/MIT.pdf
The Spore-based Reit owns 70 properties, comprising mainly flatted factories and industrial buildings, with total GFA of 1.5m sqm valued at $2.1bn…
Valuation and yields are attractive for the quality and size of its portfolio. At the IPO price, MIT is valued at 1.1x P/B and 7.6% yield, vs closest peer Ascendas Reit at 1.4x P/B and 6.5% yield. Pegging MIT to Ascendas’ valuation, we arrive at a fair value of $1.09.
More details can be found in our note on MIT.
http://kimengresearch.com/Companies/MIT.pdf
Keppel Corp
Keppel Corp: to report 3Q10 results on Oct 21, after mkt close. Daiwa forecasts 3Q net profit to come in at $294m (-15.4% qoq) on revenue of $2.5bn, in view of lower offshore operating margins.
Still broker maintains Outperform rating with 6-mth target of $10.38, based on sum-of-the-parts analysis. Tips new orders as next share price catalyst; in particular if Keppel secures the contract for 6 rigs from Petrobras, target price could be boosted by a further $0.91.
Still broker maintains Outperform rating with 6-mth target of $10.38, based on sum-of-the-parts analysis. Tips new orders as next share price catalyst; in particular if Keppel secures the contract for 6 rigs from Petrobras, target price could be boosted by a further $0.91.
Ezion
Ezion: +2.5% at $0.745 with heavy volume, still benefiting from yesterday’s JV news with Germany's BBC Chartering for ownership of multi-purpose vessel. Following Kim Eng’s Buy Call with TP of $0.99, OCBC maintains Buy rating with TP of $0.82, remains positive on grp’s development as it paves the way for larger contracts going forward, if execution is smooth…..
Raises fair value to $0.82 from $0.79 after tweaking FY11 earnings to account for deal; tips FY11 net profit of $56.7m on rev of $151.1m. Orderbook quotes suggest strong resistance at $0.75 for now.
Raises fair value to $0.82 from $0.79 after tweaking FY11 earnings to account for deal; tips FY11 net profit of $56.7m on rev of $151.1m. Orderbook quotes suggest strong resistance at $0.75 for now.
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