BreadTalk: JPMorgan initiates OW with $0.70 target price based on 15X FY11 P/E. Highlights company has transformed from bakery chain into regional food & beverage player with strong presence in Spore & China. Notes company more than doubled number of bakeries, restaurants, food courts over FY05-FY09, delivering revenue and net profit CAGR of 27% & 81% respectively. Adds wide range of F&B offerings positions it to take advantage of higher disposable income of China's urban households.
With rising trend of dining out among mass affluent consumers; there is strong potential in BreadTalk's restaurant business, which generates the highest operating margin among its three segments. Stock gapped up 2.5¢ to $0.58 today; support at $0.565.
Tuesday, September 14, 2010
SembCorp Marine
SembCorp Marine: +0.5% in morning trade. Secures the following upgrading and repair contracts worth $110m - i) $32m Ro-Pax Ferry upgrading project for a Kiwi company due to start Mar ‘11, ii) upgrading of a cruise ship for Carnival Australia due to start Nov ’10, iii) repair contracts for 8 LNG carriers…
Still, orders are small for company, and unlikely to quell concerns about SMM’s depleting order book, which stood at $4.3bn at June vs $5bn in March. All eyes still on outcome of bid for Brazilian oil giant Petrobras' 28-rig tender, result of which now expected only in Nov instead of Aug initially thought.
Still, orders are small for company, and unlikely to quell concerns about SMM’s depleting order book, which stood at $4.3bn at June vs $5bn in March. All eyes still on outcome of bid for Brazilian oil giant Petrobras' 28-rig tender, result of which now expected only in Nov instead of Aug initially thought.
Olam
Olam: mkt watchers attribute yesterday’s surge on strong volume to interest from funds. This week marks the start of the CLSA conference which Olam is participating, and Olam is also scheduled for a roadshow in New York with Morgan Stanley the week after.
Despite potential dilution from Temasek's convertible bonds (exercise $3.10), KE reckons stock is worth a Buy even at $3 levels. Remains confident about the longer prospects following Olam’s impressive FYJun10 results, which suggests that the company’s M&A strategy execution is better than expected.
HSBC initiated Buy on Olam with $3.41 target last week.
Despite potential dilution from Temasek's convertible bonds (exercise $3.10), KE reckons stock is worth a Buy even at $3 levels. Remains confident about the longer prospects following Olam’s impressive FYJun10 results, which suggests that the company’s M&A strategy execution is better than expected.
HSBC initiated Buy on Olam with $3.41 target last week.
OUE
OUE: Morgan Stanley initiates OW with $3.34 target price. Notes about half of property group's gross asset value derived from Spore office sector, which will benefit from the office space recovery. Cites mgmt actively extracting value by undertaking asset enhancement initiatives for existing properties, while at same time acquiring assets to expand portfolio. Highlights OUE's current asset portfolio of ~$5bn offers various opportunities for enhancement & redevt, which could unlock value & further expand its asset & earnings base. Large balance sheet & relatively low gearing of 39% puts OUE in good position to take on more acqns. OUE has been attracting interest from a few broking houses of late with reports by Cimb (TP: $3.37) & Credit Suisse (TP: $3.61). We wonder if this could be related to a possible placement by major s/holder Lippo, which still holds a 79.4% stake despite placing out pre-split 18m shares at $11.50 ($2.30 equiv) in Jun this year.
NOL
NOL: could get lift from strong August operating data. Rates nearing 3-yr highs, with average revenue per FEU at US$3181, +45% yoy, +3.4% mom, due to improved core freight rates in the major trade lanes and peak season surcharges on higher volumes...
Container shipping volumes was up 13% yoy, mainly due to higher volumes carried from most major trade lanes, particularly the Transpacific and Asia Europe trade lanes, although volumes slid 1.5% mom, probably due to the seasonal slowdown beginning to play out.
Two houses maintained Buy calls over the past week; both have targets of ~$2.40.
Container shipping volumes was up 13% yoy, mainly due to higher volumes carried from most major trade lanes, particularly the Transpacific and Asia Europe trade lanes, although volumes slid 1.5% mom, probably due to the seasonal slowdown beginning to play out.
Two houses maintained Buy calls over the past week; both have targets of ~$2.40.
SG Market
SG Market: Spore stocks may extend gains buoyed by firmer Wall Street overnight; improved risk appetite following breach of key 3043 resistance yesterday but technical signals are approaching overbought levels. STI may attempt to close out the 2057-2146 breakdown gap established in Jun 08. Both Genting Spore & Genting HK likely to continue to draw interest on momentum play but stocks are grossly overbought & valuations getting stretched.
Several stock rating changes to watch out for today - Morgan Stanley initiated Overweight call on OUE with $3.34 price tgt but downgraded City Dev to Equalweight (TP: cut to $11.87 from $13.83), Wheelock to Equalweight (TP: $1.92 from $2.46), Wing Tai to Equalweight (TP: $1.84 from $2.42). Raised Keppel Land TP to $4.73 from $4.14.
Several stock rating changes to watch out for today - Morgan Stanley initiated Overweight call on OUE with $3.34 price tgt but downgraded City Dev to Equalweight (TP: cut to $11.87 from $13.83), Wheelock to Equalweight (TP: $1.92 from $2.46), Wing Tai to Equalweight (TP: $1.84 from $2.42). Raised Keppel Land TP to $4.73 from $4.14.
Monday, September 13, 2010
Uni-Asia
Uni-Asia: technicals. Still in a long term downtrend. Nevertheless, candlesticks are getting pretty close to the ceiling of the descending triangle, so keep watch for a break above $0.375 which could be a positive indication of further momentum. Support at $0.30.
#Uni-Asia: recent 2Q10 net profit improved qoq, and turned around from last year’s net loss, suggesting that the worst could be over. Main catalyst for rerating would be further improvement in profits at subsequent results. Stock needs to show good profit growth, to justify the current 20.1x annualized 2Q10 PE that it is trading at…
Going forward, mgt will focus on expanding its ship investment and chartering business, and is also making headway in property investment and development. We note that Uni-Asia recently established a new 51/49 JV named UNI SALA to invest in properties in HK. Its maiden project will be to develop an industrial and office building.
#Uni-Asia: recent 2Q10 net profit improved qoq, and turned around from last year’s net loss, suggesting that the worst could be over. Main catalyst for rerating would be further improvement in profits at subsequent results. Stock needs to show good profit growth, to justify the current 20.1x annualized 2Q10 PE that it is trading at…
Going forward, mgt will focus on expanding its ship investment and chartering business, and is also making headway in property investment and development. We note that Uni-Asia recently established a new 51/49 JV named UNI SALA to invest in properties in HK. Its maiden project will be to develop an industrial and office building.
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