Friday, August 6, 2010

Courage Marine -dmg

Courage Marine: Announcement of disposal of MV Jeannie III (SGXnet)
The news: Courage Marine’s (CM) wholly-owned subsidiary Jeannie Marine Co Ltd (Panama) has entered into a memorandum of agreement dated 2 Aug 2010 with Maritime Delivery Inc as supplemented by an addendum date 4 Aug 2010 to dispose of MV Jeannie III for demolition for a consideration of ~US$2.6m. CM’s management is of the view that the proposed disposal price is favourable compared to current market prices of ships of equivalent age and size and would be ploughing the proceeds into working capital and/or other acquisitions. Net gain of ~US$500k will be realised from this disposal.

Our thoughts: The main strategy employed by CM is to acquire ageing vessels that are in their twilight years of >20 years old. Once these old-age vessels proved to be unable to operate any further without risks, CM would dispose of the vessels. Hence, the acquisition and disposal of vessels is very much a feature of CM’s business. MV Jeannie III is a bulker that was completed in 1977. We do not have a rating on this counter.

MIIF: Active management efforts to close valuation gap

Active management efforts to close valuation gap

_ Successful sale of non-Asian assets raised cash of 36Scts/share.

Macquarie International Infrastructure Fund (MIIF) successfully completed the sale of its non-Asian assets in May 2010. The cash proceeds from asset divestment have raised the cash balance to about S$465.0m or 36 Scts per share as at 31 May 2010.

_ Expected to distribute interim dividend of 1.5Scts/share in 1HFY2010. Distributions from the existing four businesses and cash holdings will not be able to sustain a long-term annual distribution of 3 Scts per share to MIIF shareholders. However, management remains committed to distribute an interim dividend of 1.5Scts per share in 1HFY2010.

_ Management deciding course of action to create value for shareholders. Management is currently looking into the possible use of the cash horde, which includes reinvesting into direct Asian infrastructure businesses which meet the investment criterion of a total return in the region of 15% to 20%. Currently, there are a handful of deals on the table which meets the fund investment criterion. In the event reinvestment opportunities are not available by the end of 2010, cash will be returned to shareholders either via a special dividend and/or a share buyback.

_ Orderly asset divestment will close valuation gap on remaining assets. Currently, MIIF still trades at a steep 32% discount to our NAV per share forecast of S$0.76 and excluding cash, at an even steeper discount of 61%. Returning cash to shareholders will reduce the fund size by about 50% but is not likely to close the discount to valuation gap on the remaining assets. To close the valuation gap, management will have to dispose the Asian assets in an orderly manner. This, in turn, will trigger the issue on the listing status of MIIF.

_ Valuation and Recommendations. Using DCF, we value MIIF at $0.60, base on a 25% discount to asset valuations, to reflect the minority holdings, as well as 100% valuation on the cash holding. At our target price of $0.60, MIIF still offers a return of about 17% and is supported by our NAV of S$0.76. We recommend a BUY. Key catalyst for share re-rating is the divestment of residual assets.

Financial Highlights

Strong capital position at corporate level. Following the divestment of the remaining non-Asian investments, including its 55% stake in CAC and its 8.7% stake in Arqiva, MIIF has a cash balance of about S$465.0m or 36 Scts per share as at 31 May 2010. At the corporate level, MIIF has no borrowings.

No business debts due until 2012. At the business level, there are no debts maturing until 2012, when NT$500mil bullet debt associated with MW is due. However, there are plans to dispose of MW.

Capital management on TBC to ensure distributions is less affected. However, there are two debt facilities, comprising NT$14.2bil onshore debt and US$252.0mil offshore debt, attached to TBC which commenced amortization in 4QFY09 and with the amortisation of the debt scheduled for FY2010, distributions to shareholders will be affected. Management is in the midst of refinancing these debt facilities to ensure distribution to shareholders are not significantly compromised.

Business debts are non-recourse to MIIF. The debt facilities are generally in compliance with covenants and the aggregate gearing of MIIF investment (excluding cash at corporate level) is about 58% as at 31 March 2010, which is close to the optimal gearing level for the fund. Further, all borrowings at business level are on non-recourse basis to MIIF.

Forward Strategy and Plans

To align with the fund’s new mandate to focus on Asia and to realise value for its shareholder, MIIF disposed the remaining non-Asian investments in 1HFY2010 through an orderly sale of assets.

Cash of 36 Scts per share as at 31 May 2010. In March 2010, MIIF successfully completed the exit of its investment in a 55% stake in Canadian Age Care (CAC) through an initial public offering of common shares of Leisureworld on the Toronto Stock Exchange. In May 2010, MIIF also completed the divestment of its 8.7% stake in Arqiva for S$243.3m, at a 2% premium to valuation of S$238.5m as at 31 March 2010. The disposals will lift MIIF’s cash balance by about S$320.5m (post transaction costs) or 25 Scts per share resulting in a cash balance of about S$465.0m or 36 Scts per share as at 31 May 2010.

Committed to distribute interim dividend per share of 1.5Scts in FY2010. In light of low return from cash balances, MIIF will not be able to sustain a distribution per share of 3Scts per share in the long-run. However, management remains committed to distribute an interim dividend of 1.5Scts per share in 1HFY2010.

For the remaining cash estimated at about S$445.5m (post payment of interim dividend), there are several courses of action management could embark on whilst keeping to the fund’s new mandate to focus in Asia and to be consistent with its objective to realize and create value for shareholders. These include

1) Asset acquisition. Invest in direct Asian infrastructure businesses which offer a total return in the region of 15% to 20% (through a combination of lower sustainable and predictable cashflow with higher potential long-term capital growth). Management has been actively seeking investment opportunities and to-date there are a handful of deals that have met the investment criterion but management has yet to finalise on any deal.

2) Return cash to shareholders via special dividend or share buyback. In the event management is unable to acquire an asset which meets the investment criterion by end of 2010, the cash balances will be returned to shareholders through a special dividend and/or share buyback program.

Challenge of closing steep valuation gap. Further, MIIF is trading at a steep 32% discount to our NAV estimate of 76 Scts per share (please refer to Table 2) and excluding cash, at an even steeper discount of 61%. The issue facing management is that by returning cash to shareholder, the portfolio size will reduce by close to 50% but it does not close the discount valuation gap.

To ensure valuation gap is closed, management will have to divest its Asian assets in an orderly manner. This, in turn, triggers management decision on the listing status of MIIF.

Using DCF, we value MIIF at $0.60, based on a 25% discount to asset valuation, to reflect the minority interest, as well as 100% valuation on the cash holding. Based on our target price of $0.

source: netsearch

MIIF’s Assets

MIIF’s Assets
To align with the new mandate to focus on Asia and to realise value for its shareholder, MIIF disposed the residual non-Asian investments in 2010 through an orderly sale of assets.

Currently, MIIF is invested in four substantial infrastructure businesses namely
Changshu Xinghua Port, Hua Nan Expressway, Miaoli Wind and Taiwan Broadband Communications.

Changshu Xinghua Port (CXP)
CXP is a multi-purpose cargo port centrally located within the Yangtze River Delta industrial zone, a high growth area which includes the cities of Suzhou, Wuxi and Changshu. The port handles mainly steel, forestry products and containers, supporting manufacturers of paper, steel and furniture, the key industries in Changshu. CXP’s hinterland is one of China’s fastest growing industrial regions.

Structure, growth prospects and strategy
MIIF acquired a 38% stake in CXP from Pan United Corporation (PUC) in December 2005 for S$112.3 mil. PUC remains the majority shareholder with a 54% stake while the remaining 6% stake is owned by Petroships Investments. There is no significant near-term capital expenditure needed on CXP as port utilisation is only about 35% to 40%, offering tremendous growth potential.

Expect weaker steel handling volume in near term. The majority of the port’s revenue comes from steel-related operations. CXP benefits from captive steel mills and processing plants located in close proximity and handles finished steel products between steel traders. In the near term, however, CXP’s steel handling volumes are likely to be affected by a drop in imported steel as the price differential between domestic steel and international steel has closed significantly.

Secure new businesses to reduce reliance on steel sector. There are ongoing efforts to secure new businesses through new cargo (through handling of new products such as sodium sulphate) and land lease to reduce CXP’s reliance on the steel sector. By leasing out a portion of its yard to prospective equipment manufacturers, CXP will receive a steady revenue stream while enjoying variable revenue from handling the equipments.

Continued steady growth from forestry product volumes due to strong demand in China for paper products. In the forestry products segment, the port has a 25% interest in the Changshu Westerlund joint venture, which was formed with leading Belgian forestry product terminal operator, Westerlund, in order to operate a dedicated forestry product terminal at CXP. Currently, CXP handles about one-third of pulp products coming into China. Continued steady growth of about 3% per annum is expected in forestry products due to demand from the region’s paper making industry.

Within the forestry products segment, CXP also handles the shipment of untreated logs for furniture manufacturers located in Changshu. Although margins are generally low, this high volume business offers stable growth.

Container trade volume to grow as international trade improves with economic growth. In the container segment, renewed growth is projected as CXP develops as an inland hub for container shipping along the Yangtze River. CXP will also stand to benefit from a rebound in container trade, handling more international and domestic containerised cargo as river traffic increases in tandem with global economic recovery and growth in the Chinese economy.

Hua Nan Expressway (HNE)
Description of HNE
HNE Phases I and II is a 31-km dual-carriage urban toll road in the city of Guangzhou, the capital of Guangdong province, which is one of the richest provinces in the nation with the highest total GDP among all provinces in the PRC. Guangdong is a coastal province in southeastern China with three of the six special economic zones in China, namely Shenzhen, Shantou and Zhuhai, within its boundaries. HNE is the main artery for north-south traffic in Guangzhou, enabling access to South China and is intersected by eight expressways and urban arteries.

Structure, growth prospects and strategy
MIIF acquired an equity interest of 90% in South China Highway Development (HK) Ltd (South China), which owns a 90% interest in HNE, in November 2007 for S$295.7mil. MIIF has an effective 81% stake in HNE.

HNE has an established traffic history since 1999, with exclusive tolling rights expiring in April 2026. It was the first toll road in Guangdong to implement electronic payment technology. The settlement scheme for Phase I & II is based on the road’s total length, vehicle types and the existing approved toll rates which have not increased since the opening of Phase I in 1999 and are set initially on a per kilometer basis by the provincial government.

There is a routine maintenance program in place and the last maintenance cycle was completed in 2009. There is no significant near-term capital expenditure needed on HNE as only about 40% of HNE’s capacity is utilised, providing significant excess capacity to accommodate traffic growth.

Traffic volume growth from the opening of Phase III of HNE and improving economic conditions. HNE’s traffic volume is expected to continue to grow in 2010 and beyond, benefitting from positive contributions from Phase III section of HNE, a complementary road to HNE which acts as a feeder road to Phase I and II of HNE but is not owned and operated by MIIF. The completion and commencement of operation of Phase III in June 2009 resulted in an increase in toll revenue over Phase I & II by about 8.8%*. Improvement in economic conditions in the Guangdong province as well as continued strong growth in passenger vehicle sales in China will also drive traffic volume growth. (* Average toll revenue growth between 15 days after the opening of Phase III and 15 days prior to the opening of Phase III.)

Partially offsetting this tolled traffic growth is the negative impact from the opening of Xinguang Expressway (XGE) Phase II in 1QFY2010. Although XGE is a parallel competing expressway to HNE, XGE phase II is a short extension to XGE Phase I which was operational since January 2007. As a result, the negative impact from the opening of XGE is not likely to be significant. Further, possible traffic restrictions implemented for the Guangzhou Asian Games 2010 which is scheduled to take place from 12 to 27 November 2010 will also lower traffic growth but on a one-off basis.

Taiwan Broadband Communications (TBC)
Description of TBC
TBC is the third largest cable TV (CATV) infrastructure owner and operator in Taiwan, which is the fifth largest cable television market by revenue in Asia. It is the sole licensee and provider of CATV in its five franchise areas in Taichung, South Miaoli, North Miaoli, South Taoyuan and Hsinchu County, providing integrated entertainment and communications services to more than one million homes reached by its cable network.

Structure, growth prospects and strategy
MIIF acquired a 20% economic interest in TBC for S$161.8m in July 2007. Macquarie-managed funds’ economic interest in TBC is 80%. TBC’s core business is the provision of cable television services. Contracts are one to three months long, generally pre-paid and renewed automatically. Cable television is the dominant broadcast medium in Taiwan and basic cable subscriber numbers reached 727,789 as at 31 March 2010.

Digital TV to provide TBC’s next growth phase and enhanced margins.
Although TBC enjoys strong recurring cashflows from its basic cable television services, digital TV will provide the next phase of growth. Currently digital TV represents only 4% of total basic cable TV, implying significant growth potential exists from successful up-selling of digital TV products to basic cable TV subscribers through continued rollout of digital television and bundling broadband, premium content and additional value-added services on existing network infrastructure. This move will also enhance operational margins.

High barriers to entry will protect margins. Regulatory ownership restrictions, operator licensing requirements, the ability to source content as well as the prohibitive cost and practicality of building a new cable network and establishing a customer base create significant barriers to entry for potential new entrant operators in TBC’s operating regions.

Capital management on debt facilities to ensure distributions to shareholders not significantly compromised. There are two debt facilities, comprising NT$14.2bil onshore debt and US$252.0mil offshore debt, attached to TBC which commenced amortization in 4QFY09. With amortization of the debt scheduled for FY2010, distributions to shareholders will be affected. However, management is in the midst of refinancing these debt facilities to ensure distribution to shareholders are not significantly compromised.

Miaoli Winds (MW)
Description of MW
Miaoli Wind (MW) owns and operates 25 wind turbines with a cumulative installed capacity of 49.8MW, at two sites in Miaoli County, Taiwan. All power generated is sold to Taiwan Power Company, the state-owned power utility in Taiwan, under a long-term Power Purchase Agreement (PPA).

MW uses turbines manufactured by Enercon, one of the world’s leading manufacturers of turbines. The operations and maintenance of turbines is contracted to Solvent, a wholly-owned subsidiary of Enercon. The long-term fixed contract with Enercon provides certainty surrounding costs and removes the need for separate maintenance capital expenditure to be incurred.

Structure, growth prospects and strategy
MIIF acquired a 100% direct interest in MW in March 2008 for a total consideration of S$30.8m, which includes transaction costs and an equity injection of S$1.7 mil in March 2010 to avoid a breach of the 31 Dec 2009 debt service cover ratio as a result of poor wind conditions over FY2009.

Poor wind performance puts ability to refinance debt due in 2012 to current debt levels at risks. Since acquisition, wind speed performance has been lower than expected. The original valuation at acquisition was based on 36 years of wind history from a nearby location, which provided management with high confidence over a long term achievable average. However, the operational performance has been disappointing and management has now revised its forecast to the average actual experience which puts MW’s ability to refinance a debt due in 2012 to current debt levels in question.

No distributions in FY2009. The poor wind performance during 2009 has resulted in no dividend distributions to MIIF in FY2009.

Reflected in zero valuation to business. The poor wind performance has been reflected in the valuation of the business. As at 31 Dec 2009, no value has been attributed to MW, a further write-down from S$16.1 mil as at 30 June 2009 (S$23.9mil as at 31 Dec 2008).

Dispose non-performing Asian asset. In view of disappointing operational performance and the relatively small size of the asset (about 3% of total portfolio), management is open to disposing MW. MW is in the process of lodging an application for Voluntary Gold Standard carbon credit and if successful, will enhance the value of MW as well as generate incremental revenue through the sale of these credits. However, as the registration for the carbon credit is not guaranteed, the additional revenue stream and potential increase in the valuation will not been reflected at this point in time.

Background details on MIIF

MIIF is a leading Asia-listed owner and operator of private infrastructure businesses, with investments in toll roads, ports, communications and broadcast infrastructure, renewable energy and transport infrastructure.

MIIF, the first infrastructure fund to list on the main board of Singapore Exchange Securities Trading Limited (SGX-ST), was listed on 27 May 2005.

The fund is managed by Macquarie Infrastructure Management (Asia) Pty Limited, a subsidiary of Macquarie Group Limited.

MIIF’s investment strategy is to acquire majority or substantial equity or equity like interests in infrastructure businesses, to allow it to exert significant influence or control over the business. Through an active management approach, MIIF pursues revenue growth and margin improvements as well as optimises business capital structures over time.

MIIF has also targeted investments through which it has acquired minority positions where its partners have similar objectives to its own.

MIIF started off investing in mature markets where mature businesses offer a relatively high and steady cashflow stream with lower potential long-term capital growth. Hence the fund was able to offer steady distributions growth and yield of about 8.0% to investors.

During the financial crisis, cost of capital surged. The gap between MIIF’s share price and asset value widened to reflect the higher risks of geared investments. In the attempt to narrow the discount gap, management re-focused on asset management and took the opportunity to divest its highly-geared non-Asian businesses.

New mandate focuses on investment in direct Asian businesses. To-date, MIIF has 100% of its portfolio (excluding cash holdings) located in Asia compared to 46% of its portfolio (excluding cash holdings) as at 31 Dec 2008, as all of its non-Asian businesses have been disposed. The new mandate is Asia-focused and to make direct value-accretive acquisitions which offer a total return in the region of 15% to 20% (through a combination of lower sustainable cashflow with higher potential longterm capital growth) as market conditions permit.

Investment Criteria
MIIF targets investments in a broad range of infrastructure sectors with a preference for relatively low-risk businesses that have -

· A dominant market position
· Sustainable and predictable cash flows over the long term; and
· Potential for long-term capital growth.

Dividend Policy
MIIF pays out the majority of normal distributions that it receives or expects to receive from its investment and does not retain significant cash balances in excess of prudent reserves. Should MIIF receive additional cash from its businesses that are nonrecurring and/or a result of capital management initiatives such as asset sales, and these proceeds are not reinvested, MIIF may distribute the proceeds to shareholders either through a special dividend or share buy-back plan. Dividends are paid to shareholders on a semi-annual basis.

Source: netresearch

Wednesday, August 4, 2010

China Taisan Technology Grp Hldgs Ltd -cimb

China Taisan Technology Grp Hldgs Ltd
Getting better and better

IPO Price : S$0.24
Price @3/8/10 : S$0.21
52-week range (SGD): 0.105 – 0.235

Earnings looks set to improve

• NOT RATED, but improving earnings outlook, TDR listing and a nice technical chart could lift share price higher. Technical BUY with breakout above S$0.22 potentially carrying the share price higher towards S$0.245.

• Discussion with China Taisan recently points to a recovery in earnings for FY10 with 2Q10 results expected to be better than 1Q10. An indication is its order book which stood at RMB 247m at end 1Q10 versus RMB 185m at end 4Q09. We believe demand remains strong and 2H10 should be better than 1H10 in line with the traditional seasonality of the business.

• TDR listing could provide short term catalyst to its share price. China Taisan has announced on 23rd July its intention to list TDRs. Before this, management has also been hard at work to broaden the shareholding base:

1) with UK-based Value fund Atlantis Investment taking a stake via the subscription of 30m new shares at S$0.195 in may this year;

2) Vendor placement to various parties including Barron Partners in September last year;

3) ADR facility (which has been suspended to focus on the TDR).

• The Company is a good proxy play on the growing consumption trend in the PRC as China Taisan supplies leading PRC sports and casual apparel brands as well as renowned foreign brands in the PRC.

Upside if Taiwan investors are more receptive

• Comparison to SGX-listed textile related companies are not exactly appropriate given that the products are different.

• Of the list of stocks mentioned by China Taisan as its closer peers in Taiwan, Bloomberg has forward consensus forecasts only for Far Eastern New Century Corp which trades at 16.8x CY10 P/E. Even a hefty 50% discount could mean a re-rating to 8.4x which would make the trip to a TDR listing worthwhile. Bear in mind though that the current Taiwan regulations do not allow for the Singapore shares to be transferred and sold in the Taiwan market still.

• The alternative approach is to value China Taisan at a discount to its customers, the HK-listed Sports apparel peers which are trading at a CY10 P/E of 17.6x China Taisan counts Anta, Li-Ning and Xtep as its customers (though in an indirect manner).

Key risks

• Shareholding changes – Latest shareholding statistics shows that Choi Cheung Kong, the Non-Executive Chairman holds a 51.2% stake in China Taisan while CEO, Lin Wen Chang holds a 10.7% stake in the Company. Although preliminary, we guesstimate that the Company could potentially issue another 128.9 million new shares without an EGM mandate, capping at 20% of the shares base as at end 2009. To prevent excessive dilution to existing shareholders, vendor shares (from Mr Choi) may be sold to meet demand from Taiwanese investors if demand is strong. The concern though is this paring of management’s stake if not well handled, could affect investor confidence in China Taisan. A good signal to the market maybe the divestment of Mr Choi’s stake in such a way that CEO, Mr Lin’s stake is raised further and new strategic investors come aboard.

• Execution risk – We believe that management may use the TDR proceeds (this is our conjecture at this junction) to build a new facility given its belief that demand is on the rise as well as for better operating efficiency. This could pose risk in the form of start-up losses which would depend on how aggressive management’s plans are.

• Order books – no long term order book in this business. Orders from customers can be delayed and usually such orders will be consumed by two to three months.

Success of new products dictates gross margins

• For gross margin to return to the previous >30% level, China Taisan would have to launch a certain number of new products every year. As such, we do not think gross margin for FY10 will exceed 30%.

• Given the growth of its sales revenue, the key component of cost of goods sold is raw materials which China Taisan manages by buying raw materials upon confirmation of orders from customers. Wages are not a large component of cost of goods sold but in any case, the Company is already at the minimum wage level.

What it does

• Manufacturer (in the PRC) of knitted fabrics used for sports and casual apparels. Performance fabrics sold under own “Lianjie” (连捷) brand.

• Approved supplier of fabrics for reputable international and local sports and leisure apparel brands such as Metersbonwe (美特斯邦威)), Li- Ning (李宁), 361º, Xtep (特步) Umbro, Nike, Puma, Anta (安踏), Kappa, Lotto.

• Also supply fabrics used in the manufacturing of apparel for brands such as Adidas, Reebok, FILA, Mizuno, Diadora, Bossini, Giordano, Septwolves (七匹狼).

Technical analysis on FSSTI -cimb

Technical analysis on FSSTI – for those in for a quick trade

• The overall uptrend from May lows is still intact with prices reaching a new 52-week high at 3,043.28 yesterday. STI opened high but closed near its intra-day low, which could be viewed as short term negative. • We also see a slowdown in upward momentum via a triple bearish divergence on its MACD and RSI. The overbought RSI also suggests that the risks of a pullback is increasing. A break below 2,990 would likely send prices falling towards 2,926 and 2,900, where the latter is the uptrend channel support. Falling further below the latter support would signal that the uptrend has indeed ended.

• Absent a breakdown of its minor wedge pattern, currently at 2,990, the near-term bias is still up. Resistance is seen around the 3,050 and 3,130 levels.

AIMS AMP Cap Industrial REIT -phillip

AIMS AMP Cap Industrial REIT–1QFY11 Results
Last Price 0.225
Target Price S$0.23 (+2.2%)
52w k High (10/20/2009) 0.29
52w k Low (12/8/2009) 0.20

• 1Q11 revenue of $16.0 million, net property income of $11.7 million, distributable income available to unitholders of $8.1 million.
• 1Q11 DPU 0.5376 cents
• Maintain Hold recommendation with fair value of $0.23

Stable results
AIMS AMP Capital Industrial REIT (AAC) recorded 1Q11 revenue of $16.0 million (+46.4% yy, +2.9% q-q), net property income of $11.7 million (+26.1% y-y, -1.2% q-q) and distributable income available to unitholders of $8.1 million (+100.1% y-y, +2.5% q-q). AAC paid out 97.5% of the distributable income. DPU for the quarter was 0.5376 cents (-64.4% y-y, 0.0 q-q). The improved y-y performance is due to the result of the recapitalization exercise whereby four buildings were acquired by the REIT which contributed positively. However DPU comparison was impacted as new units were issued during the exercise. On a q-q basis, results were little changed. Occupancy rate improved slightly over the previous quarter from 96% to 97.2%.

Separately, AAC announced that it has commenced litigation against a former tenant for breach of lease agreement. The REIT had taken possession of the property and found new tenants for the space. Management does not expect material impact on the earnings. Capital value of the portfolio maintain constant with slight revaluation upwards on the sole Japan property. Total portfolio value is $636.1 million. Total debt of the REIT is $190.4 million and gearing is at 28.8%.

There was not much development in 1Q10 and results were within expectations.

Management mentioned earlier in the year that near-term strategy is to carry out asset repositioning by divesting properties and recycling capital into higher value uses such as reducing debt or acquiring quality assets. Management is also looking to refinance the existing debt with new facilities that charge lower cost. We are thus expecting management to carry out these activities in the course of the year.

In our modeling, we had assumed a 3% vacancy rate for the portfolio which was in-line with 1Q11 occupancy rate of 97.2%. We keep our estimates and maintain our Hold
recommendation with fair value of $0.23. We have a FY11E DPU of 1.99 cents which translate to a dividend yield of 8.9%.

Tuesday, August 3, 2010

Lippo Mapletree Indonesia -cimb

Lippo Mapletree Indonesia REIT (LMRT SP; S$0.48) – SELL
FY10 P/E: 12x, P/BV: 0.6x

• After breaking above the key resistance briefly before falling beneath it again. This failed breakout is often known as a fake-out. Prices are also now trading below 30-day and 200-day SMA but above its 50-day SMA.

• In the immediate term, we expect lower prices ahead, given that its MACD has reconfirmed its dead crossover and its RSI has hooked downwards.

• Investors would likely be better off taking money off the table as its downtrend is still intact. Prices could fall back below its 50-day SMA towards S$0.41, the lower end of its downtrend channel. Only a breakout above the S$0.515 and S$0.53 resistances would make us reassess our negative call on the stock.

First REIT -cimb

First REIT (FIRT SP; S$0.88) – SELL
FY10/E: 12.8x, Historical P/BV: 0.9x

• Prices appear to be forming a megaphone top. With this pattern, prices would likely see another down and up sequence before the pattern is completed. With prices currently falling off after testing the resistances, it further increases the chances that this pattern is indeed forming.

• With its MACD and RSI flattening out and turning down, we believe that the selling pressure is picking up, at least in the short term.

• Traders may want to wait for a pullback towards S$0.82-0.85, its 50-day and 200-day SMA before getting in. Any price rise from here towards the S$0.90- 0.92 level is a sell. Longer term resistance is seen around the S$1.00 psychological level.
Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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