Monday, September 19, 2011
HPH Trust
HPH Trust: DBS maintains Buy with TP cut from US$1.05 to US$0.95 with lower FY11/12 DPU estimates of 4.5% and 6.5% respectively. Yantian throughput figures fell 6.9% yoy in Aug 2011 and is down 0.5% yoy YTD. In view of weaker peak season volume growth assumptions in Yantian have been cut. However, though GDP/trade growth is to be sub-par it is not expected to be negative which current valuations seem to imply. Forecasted US figures are at 2.3-2.4% (qoq seasonally adjusted) in 3Q11 and 4Q11, a far cry from recession. Even at lower DPU estimates, trust has attractive yield of 8.5%-9.0%. House notes that in a bear case scenario which is a deeper slowdown, TP is still at US$0.85 offering value at current prices.
Corporate News
#Sheng Siong: To recover $453.2k as an award to a litigation case on a tenancy agreement.
#China Energy: Co expects to report a net loss for FY2011 due to high cost of anthracite coal in relation to methanol.
#Sarin: Launches D-Light light performance system at HK Jewellery Show tmr for evaluation of diamonds.
#LippoMapleTree: Counter changes name to LippoMalls from 20 Sept 2011 onwards.
#China Energy: Co expects to report a net loss for FY2011 due to high cost of anthracite coal in relation to methanol.
#Sarin: Launches D-Light light performance system at HK Jewellery Show tmr for evaluation of diamonds.
#LippoMapleTree: Counter changes name to LippoMalls from 20 Sept 2011 onwards.
ChipEngSeng
ChipEngSeng: To purchase a commercial building at 150 Queen Street, Melbourne for A$25.5m. The building which is comprises 11 levels of office approx 7,192 sqm, 2 levels of retail approx 961 sqm with 2 levels of basement parking providing 26 parking lots is in the CBD area with a total NLA of 8,153 sqm. This could be increased by 275 sqm to 8,428 sqm if let on a full floor basis. The building has a site area of 913 sqm and provides opportunity for significant upgrading, or for potential redevelopment as a residential project.
The consideration will be funded through internal funds. Chip Eng Seng has a current P/E of 2.2x. Lum Chang is at approx 6.2x and KSH at 3.3x
The consideration will be funded through internal funds. Chip Eng Seng has a current P/E of 2.2x. Lum Chang is at approx 6.2x and KSH at 3.3x
Golden Agri
Golden Agri: Subsi PT SMART has obtained Roundtable on Sustainable Palm Oil (RSPO) certification for 15k hectares and 1 mill. These are the first operations from co to receive the RPSO certification. Another 104k hectares and 11 mills are to be certified.
This opens the door for major customers such as Unilever and Burger King to resume purchases which was stopped after allegations of environmentally unsustainable practices. Nestle has already resumed purchases since a couple of days ago.
Co now trades at fwd P/E of 10.2x compared to peers Indofood Agri at 8.4x and First Resources at 10.4x
This opens the door for major customers such as Unilever and Burger King to resume purchases which was stopped after allegations of environmentally unsustainable practices. Nestle has already resumed purchases since a couple of days ago.
Co now trades at fwd P/E of 10.2x compared to peers Indofood Agri at 8.4x and First Resources at 10.4x
CWT
CWT: To acquire a 50% stake in Unimar Logistics (Unimar) from existing shareholders for a total consideration of US$8.8m.
Unimar is the leading service provider of container cargo in Turkey, providing both air and sea freight. Invt in Turkey in part of on-going expansion for co to create network of freight consolidators and Unimar has been part of the network for 13 yrs prior to this. Payment will be in 4 tranches with initial of US$6.5m and remaining amt of US$2.3m in 3 equal instalments. In addition, there will be up to $1m which co will inject into the JV for expansion purposes upon completion. It is likely that co will expand further through acquisitions to achieve its strategic goals.
Co has current P/E of 19.2x.
Co now trades at fwd P/E of 10.2x compared to peers Indofood Agri at 8.4x and First Resources at 10.4x
Unimar is the leading service provider of container cargo in Turkey, providing both air and sea freight. Invt in Turkey in part of on-going expansion for co to create network of freight consolidators and Unimar has been part of the network for 13 yrs prior to this. Payment will be in 4 tranches with initial of US$6.5m and remaining amt of US$2.3m in 3 equal instalments. In addition, there will be up to $1m which co will inject into the JV for expansion purposes upon completion. It is likely that co will expand further through acquisitions to achieve its strategic goals.
Co has current P/E of 19.2x.
Co now trades at fwd P/E of 10.2x compared to peers Indofood Agri at 8.4x and First Resources at 10.4x
NOL
NOL: mgt notes 3Q peak season has not been good. Says, peak season surcharges were delayed and the quantum has been lower than earlier expectations; it appears as if customer demand in US and Europe has been weak and subdued. Cautions that the peak season may be shorter than usual this year. Adds, the visibility of fwd bookings has been poor, with no visibility beyond a month, vs visibility of 2-3mths in prior yrs.
Deutsche notes NOL’s comments are consistent with other industry players. Says its views of 4Q are more bearish than NOL’s and expects pretty severe rate pressures again for that quarter. Believes rates dropping below cash break-even is a real possibility. Forecasts US$133m net loss for FY11 (1H11 recorded US$67m net loss), worse than consensus’ US$85m net loss forecast. Notes, despite the stock trading at 0.8x FY11E P/B, it is not time to buy yet. The stock traded to a trough of 0.7x P/B in the 2008 global financial crisis. Keeps at Hold with TP $1.04.
Deutsche notes NOL’s comments are consistent with other industry players. Says its views of 4Q are more bearish than NOL’s and expects pretty severe rate pressures again for that quarter. Believes rates dropping below cash break-even is a real possibility. Forecasts US$133m net loss for FY11 (1H11 recorded US$67m net loss), worse than consensus’ US$85m net loss forecast. Notes, despite the stock trading at 0.8x FY11E P/B, it is not time to buy yet. The stock traded to a trough of 0.7x P/B in the 2008 global financial crisis. Keeps at Hold with TP $1.04.
Cosco
Cosco: Cosco (Guangdong) Shipyard, a subsidiary of 51% owned Cosco Shipyard Group, has secured an order to build 1 unit of Special Purpose Carrier. , through the exercise of an option by an European shipowner. In Feb ’11, the customer contracted for 3 firm plus 1 optional contract valued at over US$113m for Special Purpose Carriers.
The latest vessel is scheduled for delivery in 4Q13.
While the contract win is welcome, we note that Cosco’s order momentum has slowed substantially. Until order flows pick up, it might be too early to turn positive on the stock.
Recall last week, BNP reiterated its Reduce rating and lowered TP to $0.80 from $1.30, on supply glut (worsened by weak economy outlook), increasing competition and potential order cancellation.
The latest vessel is scheduled for delivery in 4Q13.
While the contract win is welcome, we note that Cosco’s order momentum has slowed substantially. Until order flows pick up, it might be too early to turn positive on the stock.
Recall last week, BNP reiterated its Reduce rating and lowered TP to $0.80 from $1.30, on supply glut (worsened by weak economy outlook), increasing competition and potential order cancellation.
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