Tuan Sing Holdings: Reported 9M11 rev of $168.1m (-43% yoy), which was below expectations, and accounted for 63% of Kim Eng full year forecast. The industrial services division was the main revenue contributor.
Looking forward, there is more to expect in terms of property development revenue as new launches have been planned for 1Q12 and 3Q12. However, house cut FY12F rev forecast by 13% to reflect our expectations of slower take-up at new property launches.
Valutions are undemanding, with grp trading at 40% below its NAV, and value remains hidden in its prime properties and their redevelopment potential. Kim Eng maintains Buy with TP at $0.48.
Tuesday, November 1, 2011
Raffles Medical Group
Raffles Medical Group: Announced good set of 3Q11 results which was in-line. Rev at $69.1m, +13.5% yoy and +3.4% qoq, while Net Income at $11.8m, +10.3% yoy and +1.7% qoq.
All divisions contributed positively with Hospital Services and Healthcare Services divisions registering growth of 14.1% and 8.4% respectively. The improved performance was the result of continued improved operating efficiencies, coupled with new specialists, higher patient load and increased patient acuity.
Going forward, grp remains positive on outlook, nothing that planning and preparatory work for 2 projects announced previously - the expansion of Raffles Hospital by 102,408 sqft, and the Specialist Medical Centre at Bideford Road – is underway, while grp’s new clinic at Asia Square will give it a stronger foothold in the emerging downtown financial district. Also expect to benefit from recent govt initiatives such as the expanded Primary Care Partnership Scheme (PCPS), which envisages more subsidised patients being treated by private general practitioners.
We note that at current price, balance sheet remains strong, with grp in a net cash position of $8.8m, while at current price, grp trades at an annualized 26.3x FY11E P/E, which is still reasonable, given its scarcity premium in SG healthcare sector. Ratings as follow:
Kim Eng maintains Buy with $2.73 TP.
DBSV maintains Hold with $2.48 TP.
All divisions contributed positively with Hospital Services and Healthcare Services divisions registering growth of 14.1% and 8.4% respectively. The improved performance was the result of continued improved operating efficiencies, coupled with new specialists, higher patient load and increased patient acuity.
Going forward, grp remains positive on outlook, nothing that planning and preparatory work for 2 projects announced previously - the expansion of Raffles Hospital by 102,408 sqft, and the Specialist Medical Centre at Bideford Road – is underway, while grp’s new clinic at Asia Square will give it a stronger foothold in the emerging downtown financial district. Also expect to benefit from recent govt initiatives such as the expanded Primary Care Partnership Scheme (PCPS), which envisages more subsidised patients being treated by private general practitioners.
We note that at current price, balance sheet remains strong, with grp in a net cash position of $8.8m, while at current price, grp trades at an annualized 26.3x FY11E P/E, which is still reasonable, given its scarcity premium in SG healthcare sector. Ratings as follow:
Kim Eng maintains Buy with $2.73 TP.
DBSV maintains Hold with $2.48 TP.
CapitaMall Trust
CapitaMall Trust: Announced that it is looking to raise $250m through a private placement, at a price of $1.79/unit, for asset enhancement works and to meet its capital expenditure needs. The issue price of $1.79 represents a discount of 4.8% to the weighted average price of $1.88 for trades done on 28th Oct11.
The New Units will be issued to over 30 existing and new institutional investors from Asia, the US and EU. A large chunk, some 90 to 95% of the net proceeds from the placement exercise will be used to finance capital expenditure and asset enhancement initiatives, including those at on-going projects such as JCube, The Atrium@Orchard and Iluma. The remaining 5 to 10% will be used for general corporate and working capital purposes. The new units are expected to be issued on Nov 10.
The New Units will be issued to over 30 existing and new institutional investors from Asia, the US and EU. A large chunk, some 90 to 95% of the net proceeds from the placement exercise will be used to finance capital expenditure and asset enhancement initiatives, including those at on-going projects such as JCube, The Atrium@Orchard and Iluma. The remaining 5 to 10% will be used for general corporate and working capital purposes. The new units are expected to be issued on Nov 10.
Sakari Resources
Sakari Resources: Announced good set of results which was in-line. Rev at $222.7m, +21% yoy and -1.4% qoq, while Net Profit at $33.8m, +46% yoy and -8.4% qoq. While EBITDA Margins improved at 28.5% vs 24.9% yoy.
Strong performance was attributed to a hike in ASP, and a good performance by grp’s 2 mines, which saw Sebuku begin mining coal from its Northern Leases, while weather conditions were good, and rainfall had no unexpected impact on operations. Overall, coal production at 2,779 mt was +2% yoy and +5.5% qoq, while ASP at $94.36/ton, +32% yoy and flat qoq, as grp increases the percentage of Coal on an index-linked basis, providing higher exposure to mkt prices.
Looking ahead, grp remains confident of prospects, and Notwithstanding the backdrop of short-term volatility, the underlying fundamentals of the thermal coal market in Asia remain unchanged with all evidence pointing to a lengthy period of very strong and rising energy demand, and tip further ramping up of its Northern leases to add positively to production going forward.
We note that grp balance sheet remains strong, with a Net Gearing of 38.2%, while at current price, valuations are compelling, with grp trading at an annualized 13.8x FY11E P/E vs 23x historical P/E. Ratings as follow:
DBSV maintains Hold but increases TP to $2.30 from $1.89.
Goldman maintains Sell with $1.70 TP.
Strong performance was attributed to a hike in ASP, and a good performance by grp’s 2 mines, which saw Sebuku begin mining coal from its Northern Leases, while weather conditions were good, and rainfall had no unexpected impact on operations. Overall, coal production at 2,779 mt was +2% yoy and +5.5% qoq, while ASP at $94.36/ton, +32% yoy and flat qoq, as grp increases the percentage of Coal on an index-linked basis, providing higher exposure to mkt prices.
Looking ahead, grp remains confident of prospects, and Notwithstanding the backdrop of short-term volatility, the underlying fundamentals of the thermal coal market in Asia remain unchanged with all evidence pointing to a lengthy period of very strong and rising energy demand, and tip further ramping up of its Northern leases to add positively to production going forward.
We note that grp balance sheet remains strong, with a Net Gearing of 38.2%, while at current price, valuations are compelling, with grp trading at an annualized 13.8x FY11E P/E vs 23x historical P/E. Ratings as follow:
DBSV maintains Hold but increases TP to $2.30 from $1.89.
Goldman maintains Sell with $1.70 TP.
NOL
NOL: poor 3Q11 results.
Net loss of US$91m in 3Q11, widened from the US$57m in 2Q11. YTD net loss amounted to US$158m.
In 3Q, NOL's revenue/TEU (ie. freight rates) was 19% lower y/y and fuel prices were up 45% y/y. On a q/q basis, average revenue/TEU was down 0.1% q/q, meaning that almost no peak season surcharges were successfully pushed through. However volume was up 6.7% q/q.
The poor results were not surprising given the slew of losses so far being reported by the Chinese and Taiwanese liners in 3Q.
Net gearing edged up from 30% last quarter to 56% at the end of 3Q. Still relatively healthy but not something the company should be complacent about.
Given that 4Q volume is usually weaker than 3Q, downward pressure on rates are likely to persist. Mgt commented that global economic conditions have not improved and expects to report a loss for full year 2011.
NOL is trades at 0.8x FY11E P/B, which is close to the 0.7x trough of the 2008 global financial crisis.
But Deutsche tips not buy the stock until there are clearer signs of a recovery. Keeps Hold rating with TP $1.04.
Credit Suisse keeps at Neutral, lowers TP to $1.20 from $1.23.
Net loss of US$91m in 3Q11, widened from the US$57m in 2Q11. YTD net loss amounted to US$158m.
In 3Q, NOL's revenue/TEU (ie. freight rates) was 19% lower y/y and fuel prices were up 45% y/y. On a q/q basis, average revenue/TEU was down 0.1% q/q, meaning that almost no peak season surcharges were successfully pushed through. However volume was up 6.7% q/q.
The poor results were not surprising given the slew of losses so far being reported by the Chinese and Taiwanese liners in 3Q.
Net gearing edged up from 30% last quarter to 56% at the end of 3Q. Still relatively healthy but not something the company should be complacent about.
Given that 4Q volume is usually weaker than 3Q, downward pressure on rates are likely to persist. Mgt commented that global economic conditions have not improved and expects to report a loss for full year 2011.
NOL is trades at 0.8x FY11E P/B, which is close to the 0.7x trough of the 2008 global financial crisis.
But Deutsche tips not buy the stock until there are clearer signs of a recovery. Keeps Hold rating with TP $1.04.
Credit Suisse keeps at Neutral, lowers TP to $1.20 from $1.23.
SG Market
SG Market: Spore shares are likely to fall, following an ugly session on Wall Street on fresh doubts over Europe's plan to stem the debt crisis. Following recent steep gains to overbought levels, the STI appears ripe for a correction, with support tipped at 2750. CapitaMall Trust is likely to be in focus after announcing a private placement at $1.79 to raise about $250m for asset enhancements and general working capital. NOL is likely to come under pressure after posting a 3rd consecutive quarter of losses, due to slowing trade and higher fuel costs.
Monday, October 31, 2011
SMB United
SMB United: requested for halt at 10.15am this morning.
Profit Sea, a wholly owned indirect subsidiary of Boer Power Holdings, proposes a voluntary conditional cash offer at $0.32/sh. This compares with last traded at $0.30 just prior to the halt, and NAV of $0.293/sh.
As an acceptance condition, the Offeror must end up controlling not less than 52.5% of the shares out.
The Offeror reserves the right to revise the Minimum Acceptance Level during the course of the Offer, provided that the revised offer remains open for another 14 days following the revision and sh/h who had accepted the initial Offer will be permitted to withdraw their acceptance within 8 days of this revision.
The Offeror intends to exercise any rights of compulsory acquisition that it may have in connection with the Offer. It is the intention of the Offeror to privatise SMB and to delist SMB, should the option be available to the Offeror.
Profit Sea, a wholly owned indirect subsidiary of Boer Power Holdings, proposes a voluntary conditional cash offer at $0.32/sh. This compares with last traded at $0.30 just prior to the halt, and NAV of $0.293/sh.
As an acceptance condition, the Offeror must end up controlling not less than 52.5% of the shares out.
The Offeror reserves the right to revise the Minimum Acceptance Level during the course of the Offer, provided that the revised offer remains open for another 14 days following the revision and sh/h who had accepted the initial Offer will be permitted to withdraw their acceptance within 8 days of this revision.
The Offeror intends to exercise any rights of compulsory acquisition that it may have in connection with the Offer. It is the intention of the Offeror to privatise SMB and to delist SMB, should the option be available to the Offeror.
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