World Precision

World Precision: Grp was a participant in the recent China Investments 2013 Conference held in Shanghai. Grp note that very encouraging recent data confirms this as HSBC's PMI rose to a two-yr high of 51.9 in Jan. The overall Chinese metal stamping machinery market is expected to grow at a CAGR of 22% from 2010 to 2015, World Precision CEO told investors and despite recent setbacks from China’s less sluggish domestic economic growth, grp believes it was well-positioned and diverse enough to endure downturns. Strategically located near the Yangtze River Delta manufacturing hub in Jiangsu Province, grp is one of the top three integrated manufacturers of precision metal stamping machines in the PRC. With its market leadership and vertically integrated operations, WPM is a major supplier to China’s auto, home appliance and electronics sectors. Adding to the recently-released better-than-expected growth figures for the fourth quarter, China's industrial production increased to 10.3% year-on-year versus expectations of 10.2% growth.

Dukang Distillers

Dukang Distillers: Grp recently spoke in China Investment Strategies 2013 conference in Shenzhen. Grp is currently very strong in Henan province, but looking to be a national name. Grp is the leading brand in Henan Province, home to over 103m people, which currently has a baijiu market size of Rmb35b, or around 10% of China’s entire baijiu mkt. China’s baijiu market is a fast-growing but highly fragmented sector with a CAGR of over 30% for the past five yrs and over 5,000 baijiu liquor enterprises operating across the country. Total baijiu sales across China from all players in 2011 amounted to Rmb374.7b and profits stood at Rmb57.2b, while in the first half of 2012, the baijiu sector maintained an impressive 17.2% growth. Grp is on track to increase annual grain alcohol production capacity for the Dukang brand by around 40%, or 3,000 tonnes, in 2013. Dukang is also increasing its distribution channels to attain national coverage, with the total number of distributors increasing from 170 to 222, covering 25 provinces in 2012. For FY12, Dukang’s rev rose 28.1% yoy toRmb1.83b on faster sales of products sold under the Dukang brand. The sales mix from Luoyang Dukang’s premium series and regular series increased to 26.6% and 34.8%, respectively, from 22.1% and 32.0% for FY2011. More recently, Dukang saw its bottom line surge nearly 75% yoy during the July-Sept 2012 quarter (1Q2013) to just under Rmb 64m, boosted mainly by the contribution from the Luoyang Dukang brand series. Note also that the firm recently inked an agreement with Taiwan's Tobacco and Liquor Corp (TTL) for the latter to produce Japanese sake products that will be sold in PRC under the Dukang brand name.

Geo Energy

Coal / Geo Energy: Coal prices may have touched bottom and be poised to rise as disruptions from Colombia to Indonesia threaten supplies, Barclays said in a report. Benchmark contracts are on the verge of breaking out of a range as workers at Cerrejon, a Colombian coal mine owned by BHP Billiton Plc, Xstrata Plc and Anglo America Plc, prepare to strike as early as next week. Further price downside could be limited, given the low prevailing levels and the potentially bullish drivers outlined. Thermal coal for 2014 delivery to Amsterdam, Rotterdam or Antwerp, the European benchmark, rose 1% to $100/mt, according to Bloomberg. A strike may remove 600,000/mt a wk from the market.

Yamada

Yamada / Agri: Grp announced that profit is expected to be significantly lower for 2Q13 vs the corresponding qtr yoy. Lower profit was mainly attributable to lower yield and lower than expected prices of fresh shiitake mushroom coupled with the increase in raw materials cost of synthetic logs for 2Q13 vs 2Q12. Profit guidance is based on a preliminary review of the unaudited financial results of the Grp. Further details of the Grp’s performance will be disclosed when the Group finalises and discloses its unaudited consolidated financial results for 2Q2013. Details of the Grp’s results in 2Q2013 are expected to be released on or before 8 Feb13. We caution that while China Minzhong and Sino-Grandness are more diversified as opposed to Yamada, the grp’s weak ASPs for mushrooms this qtr, could spark some concerns on ASPs for its 2 peers in their upcoming qtrly results.

Hiap Hoe/Super Bowl

Hiap Hoe/Super Bowl: Their first-ever hotel - Days Hotel - opened a few weeks ago on Balestier Road and their second one - Ramada Hotel, just a stone's throw away - is due to open in a few weeks. The two hotels were developed by a JV of the two co’s at a bargain price during the depths of the 2008 global financial crisis. The impending opening of these hotels has given some buzz to the stocks of the two listed property developers in the past year (see charts), aided by SG's strong tourism numbers. The stocks continue to hold their own because they are currently still trading at more than 50% discount to their RNAVs, going by estimates.

Dyna-Mac

Dyna-Mac: JP Morgan note that Petrofac-Daewoo wins UAE’s US$3.9b Upper Zakum project and Dyna-Mac is likely to win on-shore modules order worth $200m but earnings impact likely to be more pronounced in 2014. JP Morgan remains O/w, TP $0.64, and expect this order to potentially come through April /May 2013 and believe grp is likely to be involved in more jobs out of the UAE in the medium term.

OUE

OUE: Deutsche upgrades to Buy, lifts TP to $3.32 from $2.84. Says the removal of M&A uncertainty should help narrow OUE’s NAV discount which has hovered at a deep 36% since Oct. Likes OUE’s attractive exposure to Singapore commercial properties. With ~46% of NAV contributed by office, OUE is a concentrated play on the office recovery cycle with limited residential mkt risk. Believes OUE’s successful execution of planned initiatives should help drive healthy 3yr core EPS CAGR of 14%. Eg. at DBS Building, following the relocation of its anchor tenant, vacancy risk should be mitigated by the rental upside as in-place rents (<$5 psf) are significantly below mkt.