Friday, December 3, 2010

DXN 03.12.2010 Share buy back

HLG: KLCI target is 1,720.

2011 Strategy –
Ride With Liquidity But Be Aware Of Pitfall
FBM KLCI Target – 1,720

Economic Outlook
 Global outlook fragile but expect it to stay afloat and no double dip.
 Moderate US data releases (“sweet spot”) to sustain QE otherwise, potential of QE reversal or trade sanctions.
 Malaysia GDP growth projected at 7% and 5.5% in 2010 and 2011, respectively (see Table 1 next column for other projections).
 Domestic liquidity abundant but not excessive.
 BNM likely to pause rate hike with maximum another 25bps in May/Jul if growth picks up.
 Ringgit to appreciate by 3-5% to RM2.95-3.05/US$.

Market Outlook

 Four favourable drivers: 1) economic & earnings growth; 2) domestic news flow; 3) liquidity flows and Ringgit appreciation; and 4) asset bubble and reflation.

 Economic & earnings growth – FBM KLCI’s 2012 P/E at 13x. Proxy – Banking, Air Transport and Telcos sectors.

 Domestic news flow – 1) ETP & 10MP; 2) pairing down stakes in GLCs; 3) more contracts from Petronas; 4) news flow on reforms and execution ahead of elections; and 5) corporate exercise like M&As. Proxy – Construction, Property, Oil & Gas and Steel sectors.

 Liquidity flow & Ringgit appreciation – interest rate differential, Ringgit appreciation and low foreign shareholding will be augmented upon diligent execution of transformation. Proxy – big caps with preference for stocks that would benefit from the drivers of the market.

 Asset bubble & reflation – flush liquidity in the world and surplus liquidity domestically likely to benefit commodities and properties. Proxy – Plantation, Property and Oil & Gas sectors.

 Short-term volatility on external woes, general election, reversal of monetary easing and trade sanctions. Larger risk will be external shocks.

Summary & KLCI target
 Ample drivers to push the FBM KLCI to unchartered territory. Ride the liquidity wave but be aware of pitfall (potential reversal of QE).

 Short-term volatility opportunity to position for stocks that would benefit from the four main drivers.

 Ascribing mid-cycle 15x P/E to end 2012 earnings, our

FBM KLCI target is 1,720.
Summary & FBM KLCI Target

We believe there are ample compelling factors that would buoy the market. Corporate earnings growth coupled with awards of contracts (infrastructure and from Petronas), other domestic news flow, potential pick up in corporate exercise, general election, liquidity inflow on the back of Ringgit appreciation amidst low foreign shareholding as well as liquidity driven asset bubble and deflation are likely contributors to the FBM KLCI reaching unchartered territory.

By ascribing a mid-cycle P/E of 15x to end 2012 earnings, we derived at our FBM KLCI target of 1,720. The current short-term volatility emanating from external concerns is thus viewed as opportunity to position for stocks that would benefit from our themes at more palatable valuations.

Overall, we believe investors should ride on the wave of liquidity, at least for the first half of the year, but cognizant of potential reversal of the tide. Unless the US economic deviate from our “sweet spot” base case scenario (i.e. moderate economic data), we believe the liquidity tidal wave would be sustainable. Otherwise, talks of potential exit from the current “easing” and/or trade sanctions could emerge in later part of the year.

CIMB: STI tests 50-day SMA before bouncing back

STI tests 50-day SMA before bouncing back. The STI broke below its 50-day SMA
(3,176) support this week before bouncing back above this SMA and the support trend
line yesterday. As long as the recent 3,118pt low is not breached, the index could
have bottomed out or could be in a triangle formation, which may take a few weeks to
complete. The key support remains the 50-day SMA (3,176).

CIMB: KLCI has bottomed?

The KLCI tested the 50-day SMA this week before staging a strong recovery in the past two days. The Malaysian benchmark has overcome its immediate resistance trend line from the mid-Nov high, which is a good sign. As long as the KLCI does not go below 1,474pts, it may have already hit bottom this week or could be in a triangle formation.

CIMB: 03.12.10 Chart View

The index gapped up yesterday on rising volume, which should be positive for the near term. It also closed above both its channel resistance as well as its 30-day SMA. As mentioned before, closing above both of these resistances would mean that the index is likely to head higher to test the 3,235 and 3,263 levels next. Although, its technical indicators are slowly improving, it is still in negative territory

ECM: FBMKLCI target maintained at 1,650

Market Strategy FBMKLCI : 1,485.42
End-2011 target: 1,650
3QCY10 results round up

· 3QCY10 results generally inline
3QCY10 results were generally within both ECM and market expectations. 70% of stocks under coverage (56% based on consensus estimates) reported results which were within estimates. Positive earnings surprises made up 18% of stocks under coverage (19% based on consensus estimates) which was lower than the 29% positive earnings surprises in 2QCY10 reporting season. Meanwhile, there were fewer negative earnings surprises this quarter with 12% of stocks under coverage (25% based on consensus estimates) failed to meet estimates as compared to 20% in the preceding quarter.

· Earnings upgrades tapering off
The number of earnings upgrades has moderated from 15 in 2QCY10 to 13 in 3QCY10. Downgrades also dropped from 10 to 9. Earnings revision ratio (number of upgrades divided by downgrades) was flattish at 1.4x versus 1.5x in the preceding quarter.

· Flattish earnings growth trend
Post 3QCY10 earnings revision, CY10 earnings growth of the FBMKLCI increased marginally m-o-m from 20.0% to 20.8% q-o-q to 21.6% but declined on q-o-q basis from 21.6% due to index changes during the period. CY11 earnings growth stayed flat m-o-m at 13.6%. It also showed q-o-q decline from 14.6% due to index changes.

As compared to estimates post 2QCY10 reporting season, CY10 and CY11 earnings for stocks under coverage have increased by 3.7% and 2.8% respectively. While CY10 and CY11 earnings of FBMKLCI, which are free float weighted, increased by 4.5% and 3.3% respectively.

Earnings upgrades were mainly driven by aviation sector (stronger than expected revenue yield recovery), plantation sector (earnings revision driven by higher CPO prices), telecommunication sector (earnings upgrade of AXIATA to account for revenue growth by Celcom, cost savings from sharing network with DiGi and higher tax shield on interest expense from moving debt to operating unit), and gaming sector (earnings upgrade on Genting due to better than expected earnings contribution from Genting Singapore).

· End-2011 FBMKLCI target maintained at 1,650
We are maintaining both our base-case end-2010 FBMKLCI target of 1,480 and end-2011 target of 1,650. Although FBMKLCI retraced by about 3% since hitting a high of 1,528.01 three weeks ago, we are unfazed by it and believe the market will continue its uptrend in a more meaningful manner in 1QCY11, driven by resilient domestic consumption, strong foreign net equity inflows, M&A activities and pre-election play. We believe, in the best case scenario, FBMKLCI could potentially touch 1,870 by end-2011 based on 17x P/E should the current liquidity-driven rally continue into 2011.

We reiterate our top stock picks Maybank, Tenaga, AirAsia, Genting, Gamuda, and Parkson but added Sime Darby, and IOI Corp which benefit from rising CPO prices. These two are also big-cap laggards in the liquidity rally so far. Sunway Holdings has also been added due to its strong projects pipeline, and re-rating from merger with Sunway City. Among the 3 mergers of property developers announced so far, we are most positive on the Sunway merger due to undemanding post-merger P/E of less than 10x and less integration issues as both set of management teams have worked well together under a common major shareholder.

Thursday, December 2, 2010

KE: Strategy 2011

Strategy 2011
Last close: 3,181.94
Forecast high: 3211
Forecast low: 3,166

The STI rallied sharply yesterday, reaching its best levels since November. Expect the index to open higher, taking guidance from the Wall Street rally, with the next area of resistance at 3,300. Minor support is at 3,120.

– Hot money will continue to flow.
Interest rates will remain low. Against this backdrop, our strategy in the new year is to identify companies that are able to capitalise on their financial strength to buy growth. We pick seven daring plus‐size shoppers that will justify further re‐rating, not just because of their proactive pursuit of M&As and corporate restructuring, but also because of their potential to generate value for shareholders. Singapore Exchange (SGX SP, BUY, TP: $11.00) Noble Group (NOBL SP, BUY, TP: $2.58) Olam International (OLAM SP, BUY, TP: $3.88) Keppel Land (KPLD SP, BUY, TP: $5.60) Keppel Corp (KEP SP, BUY, TP: $12.30) SATS (SATS SP, BUY, TP: $3.48) Fraser and Neave (FNN SP, BUY, TP: $7.08)





  瑞士信贷全球新兴市场和亚太投资策略师席瓦(Sakthi Siva)昨天在香港,通过视像会议,接受各地媒体访问时说,亚太股市的调整还未结束,可能还有5%至7%的下方风险,但明年全年将有望获得20%的上调。












CIMB: China Taisan ranks among the cheapest among Singapore-listed peers

China Taisan

• BUY; TP: S$0.30. China Taisan is one of the leading producers of knitted performance fabrics in the PRC. It knits, dyes and finishes fabrics under its own Lianjie brand. It also provides fabric-processing services. It is one of the few approved suppliers of performance fabrics used in the manufacture of sportswear and casual wear for reputable international and domestic brands.

• Revenue increased 117.0% yoy to Rmb322.2m in 3Q10, coming from: 1) increased sales volumes resulting from higher demand from customers; 2) higher ASPs following the trend of higher raw material prices amid strong market demand; and 3) the launch of new products which led to higher sales volumes and higher selling prices. Gross profit improved 501.7% yoy to 84.3m following the launch of new products that yielded margins of above 30.0%. In addition, higher capacity utilisation rates shaved unit costs of production, leading to higher margins. Net profit increased 757.3% yoy to 60.7m in 3Q10.

• China Taisan ranks among the cheapest among Singapore-listed peers. It is trading at 4.1x P/E, less than half the valuations of its peers with ROE of over 20%, more than twice those of its peers. In addition, a prospective dividend yield of 2.1% should beat the industry average. • China Taisan commenced trading on the TSE on 6 Oct 10. The issue price for each TDR was NT$12.15. An estimated 11.3m TDRs were

offered for public subscription on 29 Sep 10 with 554.8m shares trading currently. Proceeds from the issue are expected to fund the company’s capacity expansion and broaden its shareholder base.

• China Taisan foresees itself benefiting from the current Guangzhou Asian Games which should result in a surge in demand for performance fabrics to make sports and casual apparel. Management is optimistic and believes that FY11 will be better than FY10.

• The company is also buying back shares which could support its share price

DBSV: Pan-United Still a concrete yield play

BUY S$0.515 STI : 3,158.21
Price Target : 12-Month S$ 0.62

Catalysts ahead

Prime beneficiary of strong ongoing infrastructure construction activities in Singapore

• Expect sequential earnings growth as major infrastructure projects commence

• Strategic acquisitions a near term price catalyst

• Maintain BUY: TP of S$0.62 offers 20% return; attractive dividend yield of 5.8%

A prime beneficiary of infrastructure boom. Being one of the largest ready mixed concrete (RMC) suppliers in Singapore garnering c.30% market share, Pan-United is well positioned to benefit from the firm construction demand especially infrastructure segment. Sizeable projects in excess of S$35bn and S$21bn awarded in 2008-2009 and a slew of public sector projects ahead bode well for demand of concrete products in the coming two years.

All-round improvement from 3Q. While 3Q10 results disappointed on lower RMC pricing, we expect a pick up from 4Q. RMC market is believed to be bottoming out from the trough prices in 3Q. Demand has seen signs of recovery with the commencement and progress of major projects such as Marina Coastal Expressway and Downtown Line 1 & 2. We trim ASP assumption for RMC by 2-3% in view of stiffer price competition. As such, FY10/11 net profits are revised down by 23%/19%.

M&A a near term catalyst. Pan-United is in talks with two foreign parties on potential acquisition of existing businesses and/or set up new businesses in South East Asia. This is in line with Pan-United’s strategy to deepen its regional footprint in basic material segment. We believe sound and synergistic acquisitions will benefit Pan-United’s long-term growth. Potential deal is expected to be finalised soon and could provide share price catalysts in the near term.

Still a concrete yield play. Maintain BUY on Pan-United. Our TP is unchanged at S$0.62, based on SOTP valuation pegged to FY11 numbers. Dividend yield is well over 5%.

Tuesday, November 30, 2010

FundSupermart: Has the Singapore bull market ended? Not yet, we think!

Does the current bull market in Singapore equities still have legs to run? We look back at historical bull markets for a better idea.

• Over the past six bull markets between 1986 and 2007, the average gain was 156% while the average duration was 826.2 days
• While historical bull market returns are interesting, a look at how valuations changed over the cycle offer better investment insight
• Historically, bull markets began when PB ratios were less than 1 s.d. below the mean
• Bull markets ended when the PB ratio of the market rose past 1 s.d. above the mean
• PB ratio of the Singapore market currently at the long term average, suggesting that the bull market has not reached maturity
• Corrections are part of the market cycle, we think that the current bull market still has legs
• Our targets for the STI are 3600 points by 2011, and 4000 points by 2012

Source: Fundsupermart

CIMB: Suntec REIT upgrade rental assumptions

Suntec REIT
S$1.43 Target: S$1.63
Placement price decided, upgrade rental assumptions

Placement at S$1.37 per share
Upgrade to Outperform from Neutral. Suntec REIT has announced the price for its S$428m private placement to fund its acquisition of Marina Bay Financial Centre Phase 1 (MBFC 1). The placement price of S$1.37/share is at the top end of the indicative range of S$1.34-1.38/share flagged yesterday morning, though below our S$1.42 assumption. We raise our FY11-12 DPU estimates by 2% on higher rental assumptions on a continued positive office outlook, offset partially by increased units with the lower placement price. Our DDM-based target price accordingly climbs to S$1.63 (cost of equity 8.1%) from S$1.55. Suntec REIT has shed 7% since we downgraded it to Neutral on 9 Nov and FY11 DPU yields have become attractive. Upgrade to Outperform in view of its recent share-price underperformance. We see catalysts from positive rental reversions.

The news
Placement price fixed at S$1.37. After obtaining the required approval for its acquisition of MBFC 1 from minority shareholders last Friday, Suntec REIT announced the price for its S$428m private placement yesterday. While the price is below our previously assumed price of S$1.42/share, the new units had been successfully placed out at the top end of the indicative range at S$1.37, representing a 4% discount to the REIT’s volume weighted average price (VWAP) of S$1.4274 per unit for trades done on the full market day on 26 Nov 10. Based on the placement price, 313m new units will be placed out. Trading of the new units will commence on 9 Dec.

Our comments
Limited DPU impact from lower placement price. While the placement price is 3.5% lower than that indicated by Suntec REIT’s circular in early Nov 10 and our assumed price of S$1.42, the DPU impact from the 4% increase in new units issued is limited. With the share price having pulled back by 7% since 9 Nov owing to the overhang from the impending placement, the placement price of S$1.37 represents only a small discount to VWAP done on the previous trading day.

Potential near-term overhang. While there could be a near-term overhang with the lower-than-expected placement price, we believe such dips could present a good entry point for investors, backed by attractive FY11 DPU yields of 7%.

Factoring in positive office rental outlook. Separately, pre-leasing and rental movements for Grade-A properties under construction remain positive and rents have reportedly hit S$10 psf for a few new Grade-A buildings under construction. With an estimated 50% of known office supply already pre-committed and limited additional office supply from the 1H11 Government Land Sales programme, we expect the rental momentum to continue. With management guiding for higher lease renewals at One Raffles Quay (ORQ) in FY11-12, we update our lease renewal profile and currently factor in 30% lease renewals at ORQ in FY11 and FY12. We also raise our rental assumptions for One Raffles Quay and MBFC.

Valuation and recommendation

Upgrade to Outperform from Neutral. Overall, we raise our FY11-12 DPU estimates by 2% on higher rental assumptions, offset partially by increased units with the lower placement price. Our DDM-based target price accordingly climbs to S$1.63 (cost of equity 8.1%) from S$1.55. Suntec REIT has shed 7% since we downgraded it to Neutral on 9 Nov and FY11 DPU yields have become attractive. Upgrade to Outperform in view of its recent share-price underperformance. We see catalysts from positive rental reversions.




Source/转贴/Extract/: 新浪财经 / 证券 / 宁夏卫视《微观视界》
Publish date:30/11/10

SIAS: Pacific Shipping Trust Third Acquisition for the Year

Pacific Shipping Trust
Intrinsic Value : S$0.430
Prev Closing : S$0.36

Third Acquisition for the Year
Update: On 26 November 2010, PST announced the acquisition and chartering of five 57,000 DWT Supramax bulk carriers. These five vessels will be built by Tianjin Xingang Shipbuilding Industry Co., Ltd for a contracted price of US$30m per vessel and are expected to be delivered between October 2012 and April 2013. Subsequently, these vessels will be time-chartered to Glovis Co., Ltd (affiliate of Hyundai Kia Automotive Group, investment-grade company) for a period of eight to ten years. PST also announced that it has finalized bank financing of US$150m for the previous acquisitions of two capsize bulk carriers and two MPP vessels. Maintain Invest with an intrinsic value of S$0.430.

Key Developments:
· The vessels are chartered out at a rate of approximately US$15,780 per vessel day with total contracted revenue of US$250m. Based on the cost of US$30m per vessel, it represents a payback period of 5.2 years. Again, PIL has agreed to support PST in the pre-delivery financing – we project the amount to be around 25%-30% of vessels value.

· Benefits of these developments include: diversifying the charterer base to five with each of them accounting for less than 31% of total contracted income and reducing the exposure of containership from 75% of the entire asset class to 57%.

· The charterer expiry profile was also carefully managed, with no more than three vessels expiring annually between the period of 2020 and 2023.

· Pertaining to the US$150m financing, it represents 82% of the four vessels’ asset value, which was significantly higher than our projection of 70%. Thanks to the strong support from the banks, we reckon that PST does not need to raise new equity for these four vessels. However, they will still need to attain new equity for the five Supramax bulk carriers – with the flexibility of securing the funding before 2013.
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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