Yoma Strategic

Yoma Strategic: OCBC note that Yoma reported a negative 2QFY13 PATMI of $4.2m, mostly due to a $5.4m one-time non-cash share based payment to the CEO, partially offset by increased sales of residences and land development rights. Accounting for non-operating expenses, net operating profit attributable to equity holders would have been S$1.7m – up 22% YoY – which house judge to be mostly in line with expectations. 2QFY13 gross margins were somewhat higher than forecasted as mgt took a one-time reversal of construction costs of $1m during the quarter, though this was offset by higher admin costs than expected. 1HFY13 net profit, ex-non-operating expenses, now constitutes 61% of house annual FY13 forecast, which house keep intact. Continue to be positive on the long term outlook of Yoma as the Myanmar economy continues to open up, but view Yoma’s shares to be fairly priced at current levels based on its fundamental valuation. Maintain HOLD with an unchanged fair value estimate of $0.51.

Olam, Noble, Wilmar

Commodities Traders results preview by Goldman Sachs: Olam (Buy, TP $2.50): Seasonally weak qtr, lowering earnings 1Q13 is seasonally weak (net profit typically 7-12% of the full year), and market expectations are low, but earnings could surprise if cotton procurement picks up in Australia. Still, we may not see bumper cotton margins in FY2013E as expected previously. Even if deferred FY12 farmer sales are booked in FY2013E, forward sales may not revert to prior levels due to weak demand. House lower Olam’s FY13E EPS by 14.3% on more normalized cotton margins, but 2013E- 2014E forecasts are still 11.3%-12.4% ahead of Bloomberg consensus. Noble (Buy, TP $1.65): Agriculture rebound expected, Energy may disappoint. 3Q12 Agriculture earnings may surge as Brazil’s sugar harvest goes into full swing (harvest typically in 2Q12 but delayed on adverse weather). Industry soybean crush margins in Argentina and China have improved, but seaborne Coal prices have declined 5% QoQ, to the point of production cuts from high cost producers. Noble’s Coal business is relatively resilient, supported by long term contracts, but margins could still be under pressure. House remain positive on Noble and would Buy on any weakness. Wilmar (Neutral, TP $3.25): Market expectations are low, Palm & Laurics trading conditions have improved & Oilseed margins remain challenged, but believe that the worst is over and in fact China industry crush margins have shown QoQ improvement in 3Q12. Also believe that trading conditions in Palm & Laurics have improved considerably with the recent CPO (crude palm oil) price selldown due to: a) Contango in the CPO futures curve, b) Wide CPO discount to soybean oil (good for demand), c) High biodiesel margins. 2H12 earnings could also be boosted by seasonally high Sugar earnings. Overall believe that consensus expectations are too low and Wilmar could potentially surprise on the upside.

Sakari

Sakari: the stock has been suspended as the public float has fallen below 10%. From the latest announcement , it appears that the Offeror, PTT Mining, has control over 90.36% of shares out.

Asia Medic

Asia Medic: Announced that it is looking into collaborating on health care opportunities in Myanmar with Asia Merit, an unrelated third party. The two co’s have inked a non-binding MOU to define the framework of cooperation. Under the MOU, AsiaMedic and Asia Merit will assess the feasibility and develop a business plan for both parties to jointly provide mgt services in the areas of planning, setting up, branding and mgt of health care related facilities in Myanmar.

First Resources

First Resources: UOB Kay Hian maintains Buy with $2.30 TP. Note that FR has acquired two land parcels with a total of 23,800ha in Riau and West Kalimantan. These acquisitions come with planted areas and a mill, which could make marginal contributions to FR’s 2013 earnings. FR is paying about US$3,436/ha and US$8,914/ha for the Lynhurst and GSI acquisitions respectively. These prices are higher than the recent US$2,091/ha acquisition by Bumitama Agri in West Kalimantan. However, both Lynhurst’s and GSI’s land are located near to FR’s existing area and comprise mature palm oil areas which would contribute to FR’s bottom line immediately. Also, Lynhurst owns a CPO mill. House expecting marginal earnings enhancement of 0.4-2.0% in 2012-14, coming only from GSI as the bulk of the planted area is still young where earnings contribution will be negative as operating cost for trees aged 4-5 years is higher than revenue. Also, the area is not well managed by the previous owner and it takes about 2-3 years to see higher productivity from a rehabilitated estate. Expect another good set of results in 3Q12, supported by strong production growth, drawdown of inventory and prices slightly cushioned by higher ASP locked in earlier. Maintain BUY. Target price: S$2.30.

Tat Hong

Tat Hong: CLSA maintains Buy with $1.43 TP. House note that Tat Hong’s last reported quarter delivered an impressive 36% increase in rev and 204% growth in NPAT YoY; delivering strong growth across all segments. House base case (which conservatively factors in little-to-no sequential growth based on CapU levels) anticipates 2Q13 net profit of $16.8m (+32% YoY) and believe this rebound is both cyclical and secular as SG-listed peers Sin Heng and Tiong Woon also posted strong revenue growth of 14/54% last quarter. Add that a broad basket of Tat Hong’s peers trade at 0x. Alongside ROE returning to +10% levels, house value Tat Hong at 11x13/14CL p/e (vs historical tradingavg of 12.8x) to reiterate a target of $1.43 which currently offers 10% TSR and maintain BUY call.

Myanmar

Myanmar: Myanmar's long-awaited foreign investment bill could be finalised within days, President Thein Sein said as the regime woos overseas businesses to boost its struggling economy. A draft of the much-delayed law was passed by parliament last mth but Thein Sein - who must approve the bill - sent it back for amendments following signs of discord over how far the country should be opened up to outside investors. The previous draft, which would have allowed foreign firms to own a stake of up to 50% stake in JV with local partners, was seen by some as too protectionist. Details of the new draft have not yet been divulged. Myanmar is seen by many investors as the next regional frontier market as businesses eye its huge natural resources, large population and strategic location between China and India. As the West rolls back sanctions to reward the regime for a series of political reforms, corporate giants from Coca-Cola to GE are vying for a share of an expected economic boom.