Tiger Air: Phillip starts at Sell with $1.65 target. Says at 17X fwd P/E and 6X P/B, Tiger is one of the most expensive airlines stock. Warns of intense competition in the low-cost carrier market; notes Tiger's cost advantage in Spore over other LCCs no longer as strong after the recent price hike announced by the Changi Airport Group...
Tips jet fuel costs as the wild card as they make up most of Tiger's operating expenses; notes the key to Tiger’s profitability would be its ability to pass on the fuel costs to end-customers.
Thursday, December 9, 2010
CAO
CAO: News from industry sources that co has signed term contracts with South Korea's S-Oil Corp and Japan's Cosmo Oil Co to buy jet fuel in 2011 at higher prices than this year. CAO also is in talks with SK Energy, PetroChina Co. (PTR) and China International United Petroleum & Chemical Corp (Unipec), to renew term contracts to buy jet fuel next year...
Discounts of $0.35 per barrel were narrower than last yr’s $0.70-0.85 per barrel implying both tighter supplies this yr and perceived demand for jet fuel nxt yr. In line with CPO forecasts. May weigh on airline stocks SIA and Tiger.
Discounts of $0.35 per barrel were narrower than last yr’s $0.70-0.85 per barrel implying both tighter supplies this yr and perceived demand for jet fuel nxt yr. In line with CPO forecasts. May weigh on airline stocks SIA and Tiger.
Think Environmental
Think Environmental: Update on proposed invt into Mornington Offshore for Mali gold mines, Mornington is in midst of determining measured and indicated reserves, and co is also in process of assembling own team. As such co is "cautiously optimistic" of setting production facility within nxt 12 mths...
Cost will range from US$250-400 per ounce and gold price is approx US$1400 currently. Co's subsi is working on environmentally friendly plan for operations. Recall stock is a concept play; has shot up 31.3% since 3Q results which were loss making. Caution advised as investment is still preliminary without firm figures, furthermore, co is not known for having expertise in mining or any form of JVs cited.
Cost will range from US$250-400 per ounce and gold price is approx US$1400 currently. Co's subsi is working on environmentally friendly plan for operations. Recall stock is a concept play; has shot up 31.3% since 3Q results which were loss making. Caution advised as investment is still preliminary without firm figures, furthermore, co is not known for having expertise in mining or any form of JVs cited.
Strategy
Strategy: CS initiates strategy report for 2011. Expect yr to turn out to be like 2005, with a recovery of IPO momentum & return of confidence would mean investors start to believe in an earnings recovery. Remains overweight on equities on 2011, forecasting 13% rise in global markets in 2011…
Expct 4.4% global GDP growth & equitites look cheap relative to other asset classes & provide hedge against inflation. Broker is underweight bonds. In SG, top picks are YangziJiang, Cosco and SembMarine…
Also remains bullish on SG office, expct 2011 to see continued sector cycical recovery in liquidity inflows & cap rate compressions should continue to play out. Expect double digit growth in off rents & hotel REVPAR. Amg sector top picks are OUE, CCT, KREIT & CDL….
For Transportation Sector, note that spot rates still falling, but tips carriers to hike rates and still likes NOL, OOIL, China Shipping, Evergreen & Wan Hai Lines.
Expct 4.4% global GDP growth & equitites look cheap relative to other asset classes & provide hedge against inflation. Broker is underweight bonds. In SG, top picks are YangziJiang, Cosco and SembMarine…
Also remains bullish on SG office, expct 2011 to see continued sector cycical recovery in liquidity inflows & cap rate compressions should continue to play out. Expect double digit growth in off rents & hotel REVPAR. Amg sector top picks are OUE, CCT, KREIT & CDL….
For Transportation Sector, note that spot rates still falling, but tips carriers to hike rates and still likes NOL, OOIL, China Shipping, Evergreen & Wan Hai Lines.
GLP
GLP: Annouced that the non-complete clause agreement with ProLogis was not material information. GLP has an existing non-compete agreement with ProLogis, which cannot buy
or build logistic distribution facilities in China until Feb 2011. The clause also prevents GLP from building and buying such facilities in Japan until its expiration….
Information, which was 'not specifically disclosed' in grp’s prospectus, means that it could see stiffer competition in China nx yr when the restriction is lifted…
Citi reiterates Buy, with $2.80 TP. Note that price weakness due to the misunderstanding of the non-compete agreement may present an enhanced entry opportunity. Cite grp’s unique and policy-friendly business model as well as its China-Japan dual exposure will lead it to maintain its leadership in Asia’s modern logistics facility industry….
UBS maintain Buy, with $2.65, expecting no immediate impact, while Merrill Lynch has Sell Call with $2.10 TP, citing that valuations are overstating the group's growth potential over the next 12 months.
or build logistic distribution facilities in China until Feb 2011. The clause also prevents GLP from building and buying such facilities in Japan until its expiration….
Information, which was 'not specifically disclosed' in grp’s prospectus, means that it could see stiffer competition in China nx yr when the restriction is lifted…
Citi reiterates Buy, with $2.80 TP. Note that price weakness due to the misunderstanding of the non-compete agreement may present an enhanced entry opportunity. Cite grp’s unique and policy-friendly business model as well as its China-Japan dual exposure will lead it to maintain its leadership in Asia’s modern logistics facility industry….
UBS maintain Buy, with $2.65, expecting no immediate impact, while Merrill Lynch has Sell Call with $2.10 TP, citing that valuations are overstating the group's growth potential over the next 12 months.
Straits Asia
Straits Asia: Indonesian govt forecasts coal output will increase by +19%YoY next yr as drier weather enables miners to ramp up production amid growing regional demand. Expect production of 327m tons next yr vs 275m tons YoY….
Indonesian miners forecast Indonesia coal production growth in 2009-2015 to be around 11%/yr and mostly from the major producers as well as newcomers. Tip supply to be sufficient to meet both the domestic and overseas mkts. Highlights investment by major buyers India and China in Indonesia's coal sector is expected to grow next yr as they are struggling to secure supply.
Indonesian miners forecast Indonesia coal production growth in 2009-2015 to be around 11%/yr and mostly from the major producers as well as newcomers. Tip supply to be sufficient to meet both the domestic and overseas mkts. Highlights investment by major buyers India and China in Indonesia's coal sector is expected to grow next yr as they are struggling to secure supply.
Pacific Andes Resources
Pacific Andes Resources Dev (PARD): to buy a 19.8% stake in Tassal, a leading Australia-listed salmon producer, for A$51.7m (S$67m). The deal was done at A$1.79/sh, 3.2% above Tassal’s closing px yday at A$1.735. This values Tassal at 9.3x P/E, vs PARD’s 7.3x P/E. The deal is expected to be completed by Jan ’11, with funding to be entirely from internal sources…
Tassal earned A$28.1m net profit on A$413m revenue for FYJun10, vs PARD’s HK$773m net profit, HK$7.4b revenue for FYSep10 (1AUD = 7.61 HKD). Tassel employs ~650 staff and this year harvested over 12k tons of salmon (70% of Australia's total salmon pdtn). PARD on the other hand, supplies frozen seafood worldwide and is one of the biggest suppliers of frozen fish to China…
While not earnings accretive at the moment, PARD notes this invmt would give it deeper insight into a new seafood biz that offers high growth potential and is well-protected with high barriers to entry. The venture into vertically integrated aquaculture also brings PARD one step closer towards a sustainable, farming biz model, similar to that of plantations…
News likely to be viewed positively. Recall StanChart at end Nov initiated on all 3 co’s within the Pac Andes group of companies at Outperform.
PARD ($0.47 TP), China Fish ($2.61 TP), Pac Andes International (1174 HK, HK$2.10 TP)
Tassal earned A$28.1m net profit on A$413m revenue for FYJun10, vs PARD’s HK$773m net profit, HK$7.4b revenue for FYSep10 (1AUD = 7.61 HKD). Tassel employs ~650 staff and this year harvested over 12k tons of salmon (70% of Australia's total salmon pdtn). PARD on the other hand, supplies frozen seafood worldwide and is one of the biggest suppliers of frozen fish to China…
While not earnings accretive at the moment, PARD notes this invmt would give it deeper insight into a new seafood biz that offers high growth potential and is well-protected with high barriers to entry. The venture into vertically integrated aquaculture also brings PARD one step closer towards a sustainable, farming biz model, similar to that of plantations…
News likely to be viewed positively. Recall StanChart at end Nov initiated on all 3 co’s within the Pac Andes group of companies at Outperform.
PARD ($0.47 TP), China Fish ($2.61 TP), Pac Andes International (1174 HK, HK$2.10 TP)
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