Tuesday, December 31, 2013

Outlook 2014 A year of two halves

Outlook 2014 A year of two halves
Business & Markets 2013
Written by Francis Eng, Chief Investment Officer, UOB Asset Management (Malaysia) Bhd    
Monday, 30 December 2013 16:26

WE believe 2014 could be a year of two halves with a more challenging first half due to quantitative easing (QE) tapering and a better second half as global growth momentum continues. We expect QE tapering to commence in the first quarter.

Recall in 2013 that when tapering expectations increased, there was an outflow of funds from emerging markets to developed markets and this caused the former, including Asia, to weaken. During the period of tapering fears from May to September 2013, Asean markets, such as  Indonesia, Thailand and the Philippines, bore the brunt of the selldown while Malaysia was relatively flat.

Outlook 2014 Better outlook for Malaysian equities

Outlook 2014 Better outlook for Malaysian equities
Business & Markets 2013
Written by Yvonne Tan, Chief Investment Officer, Equities, Eastspring Investments Bhd    
Monday, 30 December 2013 16:25

WE expect the Malaysian economy to grow between 5% and 5.5% in 2014, driven by steady growth in domestic demand. Private investment will continue to grow at a double-digit pace, supported by the ongoing Economic Transformation Programme.

We also expect decent export recovery next year. The global economic outlook is improving with the US economy showing good signs of recovery, for example improving employment numbers. The US housing market, which forms a large part of consumption spending, has been rising with strengthening house prices. House inventory levels are hovering near 11-year lows. As for Europe, although recovery is weak, the worst is most likely behind it. We are looking at around 1% growth for the eurozone next year.


文: 杨佳文 2013年12月30日 展望

AusGroup Presents Bottom-Fishing Opportunity For The Bold

AusGroup Presents Bottom-Fishing Opportunity For The Bold
By Nicholas Tan

Beleaguered specialist engineering service provider to Australia’s commodity industry, AusGroup, continues to be under pressure as it reported negative 1Q14 gross and net profit margins, resulting from the downturn in mining activity and cost overrun issues.

According to OSK-DMG, the negative margins position means that AusGroup is burning cash daily, which is causing further pressure on its embattled balance sheet. We suspect the negative margins might have caused it to breach lending covenants, thus triggering the repayment of senior debt and the need to provide full cash back of all bank guarantees on issue expiring in mid-January 2014. Thus, dwindling its net cash position as at 30 September 2013 to A$7.9 million.


Created 12/29/2013 - 19:38







Created 12/29/2013 - 19:00



Monday, December 30, 2013

CNMC Goldmine Ventures Into Tin Mining As Tin Price Rises

CNMC Goldmine Ventures Into Tin Mining As Tin Price Rises
Written by Leong Chan Teik (http://www.nextinsight.net/)
Saturday, 28 December 2013 12:06

TINPRICE_12.13Source: http://www.lme.com/

ABOVE IS THE price movement of tin in the past two years. Since July 2013, the metal has been recovering -- from just above US$19,000 per tonne to almost US$23,000 currently.

HEALTHWAY MEDICAL: Stronger Now With New Specialists, And Reorganisation

HEALTHWAY MEDICAL: Stronger Now With New Specialists, And Reorganisation
Written by Leong Chan Teik (www.nextinsight.net/)
Friday, 27 December 2013

HEALTHWAY MEDICAL CORPORATION is one of the largest private medical groups in Singapore. Its primary healthcare division has been doing nicely but the specialist and wellness division reported a EBTDA (earnings before tax, depreciation & amortisation) loss of $3.8 million on revenue of $29.6 million in 2012, as disclosed in the annual report.

Going forward, a narrowing of the loss, and certainly a profit, in the specialist division would have a strong impact on Healthway's bottomline.

Nam Cheong - Anticipating a New Year’s Gift (DMG)

Nam Cheong -
Target Price: SGD0.45
Price: SGD0.29
Anticipating a New Year’s Gift

We anticipate NCL announcing a series of orders to close off FY13. We also take this opportunity to roll our valuation over to 10x FY14F P/E for a SGD0.45 TP (from SGD0.41). It remains a Top Pick in the oil & gas (O&G) sector with its strong 24% earnings growth and undemanding 6.7x FY14F P/E, supported by an expected dividend increase to yield 3.0-4.2% over FY13-15F.





曾淵滄專欄 30.12.13:東南亞有難香港濕滯



XMH Holdings : New acquisition offsets weak Indonesian sales (NRA)

XMH Holdings
Current Price S$0.34
Fair Value S$0.45
New acquisition offsets weak Indonesian sales

Earnings below expectations. 2Q14 net profit of S$2.0m was 40% below our expectations, mainly due to lower-than-expected revenues from its distribution business segment and higher-than-expected SG&A expenses.

 Lower forecasts and fair value but maintain Overweight. Given the lower-than-expected earnings, we slightly revise our full year forecast 5% lower due to higher operating cost but keep FY15-16 relatively unchanged.

Sunday, December 29, 2013

买方卖方皆关注 2014房事

买方卖方皆关注 2014房事
Created 12/27/2013 - 13:00




(译:朱爱伦) 2013年12月26日 展望
富时海峡时报中型股(FTSE ST Mid Cap)指数包含50只成份股,包括五只海峡时报指数(STI)候补股。这50只股在截至2013年11月底的平均市值为22亿元。


Analysts see huge potential in China’s mobile e-commerce market

Changi Airport Group, CapitaMalls Asia to jointly develop Project Jewel

Singapore’s beauty, personal care market grows to US$1.46b in 2013

Impasse over Indonesia's ore export ban

Press Metal - Off To a Great Start (RHB)

Press Metal -
Target Price: MYR3.79
Price: MYR2.25
Off To a Great Start

Press’  management  remains  concerned  over  depressed  aluminium prices,  although  we  are  impressed  with  its  potential  143.6%  y-o-y earning surge in FY14 despite our lower price assumptions. We are also excited  by  its  strategic  asset  swap,  PMB’s  commissioning,  Mukah plant’s  re-commissioning,  and  its  landmark  deal  with  Sumitomo. Maintain BUY, with a lower MYR3.79 FV (from MYR3.82).

Sunway - Accumulating Landbank In Penang (RHB)

Sunway -
Target Price: MYR3.33
Price: MYR2.64
Accumulating Landbank In Penang

We raise our FV on Sunway to MYR3.33  (from MYR3.30)  due to  its  new land  acquisition  in  Penang.  The  land  will  be  developed  into  a  mix  of commercial  shops  and  high-rises  worth  a  GDV  of  MYR1.5bn. Meanwhile, Sunway will likely hit MYR1.8bn  in  sales for FY13.  Its sales target  for  next  year  will  be  at  the  same  level,  and  we  think  this  is achievable given its pipeline of projects. Maintain BUY.

Saturday, December 28, 2013


文: 李廷伟 (译:杨佳文) 2013年12月26日 企业摘要

在一定程度上,这些分析师的看法并没错。中国有许多厂商生产以Android作业系统运行的智能手机,而且价格低廉。相比之下,一台iPhone 5C就要价735美元,价格的差异相当大。

Westports - Extension of Port Concession (Kenanga)

Westports Holdings Bhd -
Price: RM2.54
Target Price: RM2.85
Extension of Port Concession

News  The Government of Malaysia (“GOM”) and Port Klang Authority (“PKA”) has agreed to extend the concession period of the privatisation agreement dated 25 July 1994 in which WPRTS has the right to develop and operate Westports for a period of 30 years until 31 Aug 2054.

 The extension is subject to the fulfilment of certain conditions :1) completion and reclamation of the land and incidental works for container terminal CT6 to CT9 on or before 1 Jan 2014 and 2) completion of construction works for CT6 to be fully operational on or before 1 Jan 2014.

Top Glove - Trying Times In China

Top Glove -
Target Price: MYR6.34
Price: MYR5.80
 Trying Times In China

Top Glove (TOPG)’s 1QFY14 net profit of MYR50.3m came in largely in line with our and consensus expectations,  making up 21.8% and 22.0% of  FY14  estimates  respectively.  The  global  shift  in  demand  towards nitrile gloves puts TOPG in a more challenging environment given that its capacity mix is skewed towards  the NR glove segment  (80:20). We reiterate our NEUTRAL call, with our FV unchanged at MYR6.34.

Hai-O - Strategy Shift To Take Time (RHB)

Hai-O -
Target Price: MYR2.70
Price: MYR2.62
Strategy Shift To Take Time

Hai-O’s 1HFY14 results were below consensus and our estimates. Sales and  net  earnings  softened  due  to  weaker  numbers  across  the  board. The group declared a 4 sen interim dividend for the quarter. We cut our FV to MYR2.70  (from MYR3.28) as we  lower  our earnings forecasts  on slowing  sales.  Downgrade  to  NEUTRAL  (from  Buy),  as  we  expect  flat performance going forward due to stiff competition.

AirAsia X - Staying Ahead Of The Pack

AirAsia X -
Target Price: MYR1.31
Price: MYR1.01
Staying Ahead Of The Pack

AAX has signed its single largest Airbus order of 25 aircraft, which will be  delivered  starting  2015.  Including  the  existing  firm  orders,  the purchase will boost  its  fleet  to  57  aircraft  by  2019.  The fleet  expansion will  support  AAX’s  ambition  to  become  the  region’s leading  long  haul low  cost  carrier.  We  keep  our  valuations  unchanged  and  maintain  our BUY recommendation and MYR1.31 FV.

Karex - Strengthening Its Lead (RHB)

Karex Bhd -
Target Price: MYR4.43
Price: MYR3.86
Strengthening Its Lead

After  our  recent  meeting  with  management,  we  raise  our  FY14F-15F earnings  forecasts  by  12-26%  as  we  become  more  upbeat  on  the company’s outlook. We continue to like Karex for its lead in the condom manufacturing  industry  and  strong  earnings  growth  spurred  by capacity  expansion.  Maintain  BUY, with  our FV  lifted  to  MYR4.43  (from MYR3.51).

Friday, December 27, 2013


Created 12/27/2013 - 18:02


八成內銀股價殘 低於每股資產淨值 短期難改善

八成內銀股價殘 低於每股資產淨值 短期難改善



XMH Holdings -Growth Slows As Indonesians Hold Their Breath (DMG)

XMH Holdings
Target Price: SGD0.50
Price: SGD0.35
Growth Slows As Indonesians Hold Their Breath

XMH posted weaker 2Q14 results as its Indonesian customers delayed their receipt of orders as the IDR depreciated. Margins and overheads  growth were in line, but the topline was flat, leading to a 44% y-o-y fall in profits. The consolidation of MPG Group will bolster earnings growth, although the actual pickup should come in FY15F. As XMH remains a fundamentally strong company, we maintain our BUY call, with a lower SGD0.50 TP.

Yangzijiang : Capitalising On Shipbuilding Recovery (DMG)

Target Price: SGD1.50
Price: SGD1.16
Capitalising On Shipbuilding Recovery

YZJ is one of the leading private shipbuilders in China, specialising in dry bulk carriers and container ships. The company is well-positioned to grow its orderbook as global shipbuilding orders are recovering. We like YZJ for its strong execution record and balance sheet. Management is also seeking to diversify its earnings, which is positive over the longer term. Maintain BUY on YZJ, with a SOP-based TP of SGD1.50.

Midas -2014 Outlook An Optimistic One (DMG)

Target Price: SGD0.75
Price: SGD0.49
2014 Outlook An Optimistic One

China’s plan to keep rolling out tenders for high speed trains bodes well for Midas as it commands a 60% share in China’s railway train car market. Margins going forward are likely to be lower for FY13 as the company took on more lower-margin orders during the year, but are expected to improve as it secures more orders over the next few quarters. Maintain BUY, with TP of SGD0.75.

Lian Beng -Profitability Set To Improve (DMG)

Lian Beng
Target Price: SGD0.70
Price: SGD0.53
Profitability Set To Improve

LBG’s 1Q14 PATAMI fell y-o-y in spite of stronger y-o-y revenue growth. It is expected to achieve stronger PATAMI in the next few quarters, fuelled by its strong orderbook and earnings contribution from M-Space after the latter obtains temporary occupation permit (TOP). With  LBG’s expertise and experience, it should benefit from the pipeline of public projects. Maintain BUY and SGD0.70 TP, based on a 6x FY14F P/E.

曾淵滄專欄 27.12.13:滙控有望拆港業務



King Wan -10.5% Yield Sustainable (DMG)

King Wan Corp
Target Price: SGD0.43
Price: SGD0.29
10.5% Yield Sustainable

KWAN is the largest mechanical & electrical (M&E) player in Singapore with an orderbook stretching to CY16. It pays a core 5.3% yield, with KTIS potentially listing in Feb 2014. This will allow the company to double as well as maintain its dividend going forward. Management has shown investment acumen and willingness to pay dividends. Maintain BUY, with SGD0.43 TP, based on 7% yield.

Thursday, December 26, 2013

Keppel REIT -REIT That Offers Grade-A Offices At a Bargain (DMG)

Keppel REIT
Target Price: SGD1.66
Price: SGD1.16
REIT That Offers Grade-A Offices At a Bargain

KREIT’s latest Australian acquisition (Melbourne) reinforces management’s progressiveness in extending its portfolio’s revenue tenure with fixed annual rental escalation and high portfolio occupancy. Besides its Grade-A offices, we see the lengthening of its portfolio’s WALE further mitigating the specific risks associated with commercial landlords. Maintain BUY, on the stock’s high 7.4% DPU yield.

¨ Strong income stream. With a weighted average lease to expiry (WALE) of 6.4 years and long-term leases (>five years) accounting for 40% of its portfolio, coupled with a revenue hedge for its Australian exposure, KREIT’s earnings downside risks appear limited.

First Resources -Plantation Sector Top Pick (DMG)

First Resources
Target Price: SGD2.70
Price: SGD2.03
Plantation Sector Top Pick

We upgrade the plantation sector to OVERWEIGHT, with First Resources (FR) still being our Top Sector Pick given its compelling valuation, favourable age profile and strong management. Following a sector-wide CPO price upgrade, we raise our earnings projections for FY14 by 2% and introduce our FY15 earnings forecast at USD272m. We lift our FV to SGD2.70 (from SGD2.65), based on a 16x CY14 P/E.

Eu Yan Sang -Quarterly Growth Set To Roll Macro (DMG)

Eu Yan Sang
Target Price: SGD0.92
Price: SGD0.82
Quarterly Growth Set To Roll Macro

EYSAN is Asia’s leading family-controlled traditional Chinese medicine (TCM) retailer. Operationally, we believe the company is back on a quarterly growth momentum after posting strong 1QFY14 sales at its Hong Kong and Australia operations. We also expect FY14F/15F earnings to jump 27%/50% to SGD18.7m/28.0m respectively. Maintain BUY and SGD0.92 TP.

DBS -Still The Best Bet (DMG)

Target Price: SGD19.40
Price: SGD16.74
Still The Best Bet

Despite moderating loan and non-interest income growth, we expect DBS to sustain its 7% net profit growth in FY14F. Stable NIMs and credit cost, as well as positive jaws are expected to help cushion the weaker topline growth. DBS offers strong leverage to the interest rate upcycle. While rate hikes are only expected in 2015, the stock cannot be ignored, in our view. Maintain BUY, with a SGD19.40 FV.

Cambridge Industrial Trust - Proposed acquisition (CIMB)

Cambridge Industrial Trust -
Current S$0.68
Target S$0.80
Proposed acquisition

CIT has proposed to acquire 11 Chang Charn Road for S$32m. We view this acquisition positively as we see room for CIT to maximise the return from this property via raising occupancy and rental rates.

We believe the proposed acquisition of 11 Chang Charn Road, expected to be completed in 1Q14, will add c.0.8% to CIT’s FY14 dividend. In view of the slightly stronger dividend yield, we tweak our DPS estimates up by 0.8% for FY14 and 1.1% for FY15. We maintain our Add call, with a higher DDM-based (discount rate: 8.3%) target price of S$0.80.

S-REITS -Time To Accumulate S-REITs (DMG)

S-REITS -Time To Accumulate S-REITs

Since late May 2013 when fears of global interest rate tightening spooked capital markets worldwide, the S-REITs sector has collapsed by over 20%, underperforming the wider FSSTI index (down by 10%). We think the selldown has overly discounted both the macro and  REITspecific fundamentals, hence we believe it is an opportune time to buy ahead of consensus upgrades. Maintain BUYs on Keppel-REIT, AIMS AMP, Cambridge and Cache Logistics.

¨ The SREITs under our coverage are currently trading at 6.5% FY14F DPU yields, with almost 3.5% spread over Singapore’s 10-year bond yield (historical average 4.6%). This is on the back of a 20% correction in the SREITs since May, against the wider FSSTI index which retraced by only 10%.

Wednesday, December 25, 2013


Created 12/24/2013 - 17:30
(吉隆坡24日訊)全球經濟復甦料為明年保健領域迎來更多企業活動,除香港屈臣氏(Watson)和科士威(Cosway)料在明年趕搭上市列車,綜合保健(IHH,5225,主板貿服組)也可能與哥倫比亞亞洲(Columbia Asia)合併,以與柔佛醫藥保健(KPJ,5878,主板貿服組)較勁。


Hai-O - Weaker Sales and Currency Woes (Kenanga)

Hai-O Enterprise Bhd -
Price: RM2.62
Target Price: RM2.95
Weaker Sales and Currency Woes

Period  2Q14/1H14

Actual vs. Expectations Below expectations. Hai-O reported 2Q14 net profit of RM10.5m (+20% QoQ, -35% YoY), bringing its 1H14 NP to RM19.3m (-27% YoY) which made up 37% and 38% of our and the consensus full year estimates, respectively. The key culprits were: (i) lower-than-expected sales growth and (ii) margins erosion due to the weakening of Ringgit against USD.

Sunway - Penang Expansion (Kenanga)

Sunway Berhad -
Price: RM2.64
Target Price: RM3.08
Penang Expansion

News  SUNWAY’s wholly-owned subsidiary, Sunway City (Penang), has proposed to acquire 24.5ac, comprising of 4 pieces of freehold land in Paya Terubong, Pulau Penang, for a total consideration of RM267m or RM251 psf. The purchase consideration is derived from a successful bidding in an open tender, which the minimum reserve price was fixed at RM200 psf (which is 20% lower than the purchase price). The project has a potential GDV of c. RM1.5b.

M'sia Aviation - The Great Malaysian Fare is Ending (MKE)

The Great Malaysian Fare is Ending

Value has emerged. The Malaysian aviation sector has had a turbulent 2013 due to price war and overcapacity that decimated yields and profitability. The industry is gradually improving and we are more optimistic on the balanced capacity planning and deployment in 2014. We forecast sector earnings growth of 312% YoY in 2014, primarily driven by narrowing losses at MAS. Excluding MAS, the industry‟s earnings will grow by 4.9% YoY. With values having emerged, this underpins our Overweight stance on the sector. Our top BUY pick is AirAsia X, followed by AirAsia. We maintain our HOLD call on MAHB as we think all the good news has been priced in. MAS is now a HOLD as its share price has closed in to our target price since our SELL call.

M'sia REITs - It’s All About The Fed (MKE)

M'sia REITs-It’s All About The Fed

All eyes on the west. US Fed‟s QE tapering has came in earlier than expected. Market will continue to interpret the implications of US economic data (i.e. inflation) to gauge the momentum and quantum of QE tapering over the next months. While interest-sensitive M-REITs are likely to be laggards in 1H14 against a volatile yield environment, a large portion of the taper-related selloff is already factored in their unit prices, we believe, hence, we maintain our NEUTRAL stance on the sector. Our top pick is CMMT.

M'sia Property - Hard Times Ahead (MKE)

M'sia Property - Hard Times Ahead

Uncertainties prevail. We remain UNDERWEIGHT on the property sector (developers). We expect the property market to be hard hit by the new property cooling measures of Budget 2014 and by some state governments. Stricter mortgage lending by the banks will also slow new transactions. Already, developers have expressed caution on the property market outlook over the next six months and are switching their product focus to affordable housing where demand is still resilient supported by a young demographic. Our pick for the sector is Glomac.

M'sia 2014 Outlook & Lookouts - Defensiveness Returns (MKE)

2014 Outlook & Lookouts - Defensiveness Returns
Current KLCI: 1,851 (17 Dec 2013)
YE KLCI target: 1,940 (unchanged)

We expect a faster global economic growth of 3.5% in 2014 from an estimated 3.1% in 2013 as major advanced economies – US, Europe, Japan – simultaneously expand for the first time since 2011. In contrast, ASEAN‟s growth trends are expected to be mixed on factors ranging from favourable impact of external demand rebound on Singapore and Malaysia, to transitory effects of domestic macroeconomic turbulence, political uncertainties and natural disasters on Indonesia, Thailand and the Philippines. This is amid the continued sub-8% expansion in China.

Tuesday, December 24, 2013

Are China bank stocks cheap or just crummy?

China banks are trading at bargain basement valuations, but analysts can't agree on whether they're cheap or just crummy.

The sector just got even cheaper, with Hong Kong and China listed bank shares falling around 5.5-7.3 percent over the past two weeks as interbank rates spiked higher on a seasonal liquidity squeeze, before posting a slight recovery Tuesday as rates eased.

The performance of the China bank stocks can sway the entire market, with the financial sector taking a more than 34 percent weight in the MSCI All China index.

Plantation Sector - 2014 a Year Of Plenty (DMG)

Plantation Sector - 2014 a Year Of Plenty

We are OVERWEIGHT on the plantation sector, which we believe will have a good year ahead with most companies seeing stronger profitability. This will be driven by stronger demand for palm oil from the food and fuel sectors, higher ASPs due to lacklustre production growth in Indonesia as well as lower fertiliser costs. Our average CPO price assumptions are raised to MYR2,700/MYR2,900 for CY14/15.

¨ Biodiesel push. Malaysia is raising its mandatory biodiesel blend to 7% from 5% currently as early as Dec 2013, while Indonesia is pushing for a 3m tonnes of biodiesel (B100) consumption next year. We believe the moves by the governments of the world’s two biggest biodiesel producing countries will have a significant impact on palm oil demand. Note that never before has palm biodiesel received such a strong mandate.

S'pore Construction - Strong Pipeline Of Projects Ahead (DMG)

Engineering & Construction -Strong Pipeline Of Projects Ahead

The construction sector in Singapore is poised for growth, supported by a healthy pipeline of government projects over the next few years. We are OVERWEIGHT on the sector. Competition is likely to remain keen (from both local and overseas players) and margins should remain under pressure. Our Top Pick is Lian Beng Group (LBG), in view of its good track record and ability to maintain margins.

¨ Growth driven by government projects. Construction demand in 2014 is expected to remain strong, supported by government projects to enhance overall infrastructure. Pipeline projects include Changi Airport expansion, increased rail network and an increase in HDB estates. Given that most of these are billion-dollar projects spanning a few years, the main contract is usually awarded to large foreign players. Nonetheless, local listed construction and related companies, especially those with a good track record, stand a chance of securing parcels of work in these major projects (either to build a section of the entire project or to supply materials/equipment).

S'pore Consumer -Powered By Regional Growth

 Consumer -Powered By Regional Growth

We are positive on Singapore’s consumer companies in 2014 as they will likely benefit from the region’s growing consumption. Given the > 30% returns YTD November, we continue to like specialty retailers Eu Yan Sang and OSIM for their North Asia exposure. We also like Parkson Retail Asia, Sheng Siong and Super Group following their recent share price declines, which have made their risk-reward profiles appealing.

¨ Mixed returns YTD. For 11M2013, our coverage returned an average of +6%, led by strong performances of +37% and +31% from specialty retailers Eu Yan Sang (EYSAN SP, BUY, FV: SGD0.92) and OSIM (OSIM SP, BUY, FV: SGD2.60) respectively. On the other hand, consumer discretionary players underperformed, with the share prices of FJ Benjamin (FJB SP, NEUTRAL, FV: SGD0.27) and Parkson Retail Asia (PRA SP, BUY, FV: SGD1.28) declining by 29% and 23% respectively.

Singapore 2014 -Themes Pro-growth policy (DMG)

Singapore 2014 Themes
Pro-growth policy
We believe that there will be a shift away from the yield stocks in 2014. Last year, we were negative to neutral on most sectors, which seemed prescient considering the market’s flattish performance over the past year. We have since upgraded a few sectors including Consumer, Offshore & Marine, Plantation and Technology.

Correspondingly, our view on the overall market has turned positive.

On the property side, we still favour the REITs for now, but we do not expect it to outperform through the year. At some point, property developers should start to catch up, but it would not be too soon, as property prices will have to fall first. This should be evident in the first half of 2014.

曾淵滄專欄 24.12.13:熱錢泊港炒風續強


Singapore Strategy: Time To Roar Again (DMG)

Singapore Strategy
Time To Roar Again

Singapore, a boring market? This may have been so for the past few years, but things are set to change in 2014. We believe that the conditions are ripe for the market to outperform its regional peers. In particular, we expect the small caps to spring back to life following a rout in 4Q13. Our STI target of 3,480 is based on a 15x FY14 P/E.

•Worst-performing market to regain lustre. Singapore seemed to have lost its shine over the past few years, no thanks to domestic restructuring as well as its neighbouring countries’ rapid growth. Compared to the US and Asean markets, the country’s stock market was the worst performing by a mile over the last three years. However, things are about to change next year as we expect Singapore to make a comeback.

Monday, December 23, 2013

喜庆45周年 森德勇闯下一个高峰

喜庆45周年 森德勇闯下一个高峰
Created 12/23/2013 - 12:44



麥嘉華(Marc Faber)筆記:何時減磅有路可捉


對不少投資者來說,要承認自己在投資上押錯注,並且要果斷地止蝕,的確需要很大的決心和遵守投資紀律。不過,正如費桑德(William Feather)所言,如果我們自己不遵守紀律,市場終會迫使你去做。


COSCO : Poised For A Comeback In 2014? (UOBKH)

Share Price S$0.73
Target Price S$0.85
Poised For A Comeback In 2014?

We estimate ytd contract wins at US$3b, surpassing our projection of US$2.5b. We raise our 2014-15 net profit forecasts by 7-13% on higher contract win assumptions of US$3.0b each for 2013 and 2014 (previously US$2.5b). Improved dry-bulk shipping sentiments, if they continue throughout 2014, could spark a new dry-bulk shipbuilding cycle. Poor earnings (as a result of cost provisions) are currently dampening share price upside. Maintain HOLD. Target price: S$0.85. Entry price: S$0.70.

RH Petrogas - Exploration VP Steps Up To CEO Role (DMG)

RH Petrogas -
Exploration VP Steps Up To CEO Role
December 19, 2013
RHP announced that current CEO Dr Tony Tan is retiring on 31 Dec, but will continue to serve as an advisor to the board. Francis Chang, currently VP exploration & production (E&P), will step into the CEO role. Chang has a strong background in E&P and we expect a smooth transition, as he has been with RHP since June 2010. Maintain BUY with SGD1.38 TP. The stock trades at 37% discount to its production assets.

Soilbuild Business Space REIT : New Kids on the Block (DBSV)

Soilbuild Business Space REIT
BUY S$0.75
STI : 3,067.57
Price Target: 12-Month S$0.87
New Kids on the Block

 Minimal lease expiry in 2013; organic growth a main driver in 2014
 Low gearing of 29.4%, with strong balance sheet metrics
 BUY, TP S$0.87

Mapletree Logistics Trust : Strength in diversity (DBSV)

Mapletree Logistics Trust
BUY S$1.015
STI : 3,067.57
Price Target: 12-Month S$1.16
Strength in diversity

• Steady earnings growth from an expanding portfolio
• Ready acquisition opportunities from sponsor
• BUY, TP S$1.16

Mapletree Industrial Trust : Low Risk, High Returns (DBSV)

Mapletree Industrial Trust
BUY S$1.285
STI : 3,067.57
Price Target: 12-Month S$1.44
Low Risk, High Returns

• Organic growth uptrend remains intact
• Completions of development projects to contribute positively over FY14F-16F
• BUY, TP S$1.44 maintained

Cambridge Industrial Trust : One to watch(DBSV)

Cambridge Industrial Trust
HOLD S$0.68
STI : 3,067.57
Price Target: 12-Month S$0.74
One to watch

 AEIs and planned acquisitions to drive earnings
 Further hikes in distributions from interest savings
 HOLD maintained, TPS$0.74

Cache Logistics Trust : Clean transparent yields (DBSV)

Cache Logistics Trust
BUY S$1.07
STI : 3,067.57
Price Target: 12-Month S$1.33
Clean transparent yields

• Transparent earnings with minimal downside
• Acquisitions to re-rate earnings and stock
• BUY, TPS$1.33

曾淵滄專欄 23.12.13:錢荒締造低吸機會



Ascendas REIT : Progressing steadily (DBSV)

Ascendas REIT
BUY S$2.17
STI : 3,067.57
Price Target: 12-Month S$2.44 (Prev S$2.37)
Progressing steadily

 Steady earnings growth stream over coming two years
 Investment in Aperia to bear fruit from 2H14
 BUY maintained, TP raised to S$2.44

Industrial REITs - Navigating through murky times (DBSV)

Industrial REITs - Navigating through murky times

■ Industrial landlords to ride out operational challenges well
■ Reversions to remain positive, buffered by low expiring rent levels; retention rates expected to remain high
■ We pick MINT for superior growth profile; Cache for high yields

Challenges ahead given significant supply outlook
The industrial sector performed better than expected in 2013, as demand growth kept up with supply completions. As a result, rental and capital values inched up, albeit at a more moderate rate of 5-7%. Looking ahead, we see outlook turning modest, owing to a significant supply pipeline of 51.8m sqft (+12% supply expansion) of industrial space currently under construction/planning, which is projected to be completed over 4Q2013-2015.

Sunday, December 22, 2013

Money Mind Young Investors Ep 2

Bank of China : A dark horse (MKE)

Bank of China
Buy (Initiation)
Share price: HKD3.74 (27 Nov 2013)
Target price: HKD4.30
A dark horse

A key beneficiary of QE tapering. Bank of China (BOC)’s net interest margin (NIM) remained below its peers at 2.21% in 3Q13 (2.22% for 9M13). This was mainly due to the low-margin domestic foreign currency business (NIM: 0.94% in 1H13) and overseas business (NIM: 1.25% in 1H13). The HK dollar and US dollar average interest earnings assets accounted for 20% of group total in 1H13. We expect the QE tapering will result in a steepening US dollar yield curve with minimal interest rate volatility. This should provide opportunities for BOC to enhance its NIM through lengthening the duration of its HK dollar and US dollar assets. We estimate that for every 10bps increase in the yield of these assets, BOC’s NIM will widen by 2bps. Overall, we forecast the group NIM of BOC to stay at about 2.2% during 2013-15.

Giordano International : Recovery ahead in China (CIMB)

Giordano International
Current HK$6.76
Target HK$8.14
Recovery ahead in China

Giordano is a high-yield stock which offers steady earnings growth, courtesy of robust sales in Asia Pacific and the Middle East. It is set return to growth in China in FY14, fuelled by new stores and store upgrade/relocation.

Under our revised rating structure, our call changes from Outperform to Add. We retain our target price as we continue to value the stock at 13.5x CY15 P/E, a 10% discount to its 10-year average. Share catalysts are a sales recovery in China and sustainable gross margin expansion.

Fufeng Group : Tough year is over (CIMB)

Fufeng Group
Current HK$3.06
Target HK$4.00
Tough year is over

We expect Fufeng’s net profit to rise 51.7% yoy in FY14 due to higher MSG prices and stable contribution from the xanthan gum segment. We believe the MSG industry’s consolidation is coming to an end as no smaller players re-entered the market in 2H13.

Under our new rating structure, we change our Outperform rating to Add. We see catalysts from a recovery in margins. Our DCF-based target price is HK$4.0 (WACC 12.1%).

Industrial and Commercial Bank of China: More challenges ahead (MKE)

Industrial and Commercial Bank of China
Hold (Initiation)
Share price: HKD5.55
Target price: HKD5.40
More challenges ahead
Minimal NIM pressure, albeit moderate loan growth. Industrial & Commercial Bank of China (ICBC)’s net interest margin (NIM) remained at 2.56% in 3Q13 (2.57% for 9M13). ICBC may lengthen the duration of its investments and adjust its asset mix in 2014 to minimize the impact of price competition for loans and deposits. We forecast its NIM to be 2.54% in 2014. Loan growth was lower than the market average at 9.6% for 9M13 as ICBC has tight approval control over LGFV loans and lending to industries with over-capacity. We forecast its loan growth to remain moderate at 10-11% p.a. during 2013-14.

China Construction Bank :Solid capital base; disciplined operations (MKE)

China Construction Bank
Buy (Initiation)
Share price: HKD6.25 (27 Nov 2013)
Target price: HKD7.25
Solid capital base; disciplined operations

Selective loan growth and slight NIM pressure. China Construction Bank (CCB)’s loan growth remained healthy at 11.5% 9M13. Key drivers were SME loans, residential mortgages and overseas lending. CCB also shifted its loan growth towards less risky Central and Western China. CCB maintained its net interest margin (NIM) at 2.71% in each quarter during 9M13. However, its loan-to-deposit ratio rose to 69.1% in Sep 2013 (66.2% in Dec 2012). To regain market share in deposits and factor in potential price competition stemming from interest rate deregulation, we forecast CCB’s NIM to narrow to 2.66% in 2014.

Agricultural Bank of China: Expect ROE to remain above peers (MKE)

Agricultural Bank of China
Buy (Initiation)
Share price: HKD3.98 (27 Nov 2013)
Target price: HKD4.60
Expect ROE to remain above peers

Making efforts to reduce NIM pressure. Net interest margin (NIM) of Agricultural Bank of China (ABC) revived from 2.7% in 2Q13 to 2.77% in 3Q13, mainly due to the reduction in interbank borrowing and the increase in investment in long-term bond securities. Besides, ABC has maintained the loan-to-deposit (L/D) ratio at 60.2% and the proportion of demand deposits at 52.2% of total deposits in Sep 2013. We believe ABC will continue to improve its asset and liability management to minimize its NIM pressure under interest rate deregulation. We forecast its NIM to be 2.73-2.74% in 2013-14. We estimate that for every 1ppt increase in its L/D ratio, its NIM will widen by 1-2bps.

曾渊沧博士-股市资讯专栏 20.12.2013 - 告别2013年,2014年有何展望?




Saturday, December 21, 2013

The DBS View - Investing in Today's Market Environment


香港文汇报讯(记者 陈远威)本港流动电讯市场变天。面对政府2016年收回三分一3G频谱,李泽楷再展并购财技,旗下香港电讯(6823)昨以188.67亿元,全面收购其2001年卖出的CSL New World Mobility Limited(下称「CSL」),重夺本港电讯市场一哥宝座。公司并表示会放弃竞投被政府收回的频谱,同时还额外交还多三分一频谱,有利政府引入第5个3G营运商,市场相信并购获批准机会高,香港电讯股价昨爆升13%。

电盈与旗下香港电讯昨公告,合共斥资约188.67亿元,向Telstra旗下Telstra Bermuda及新世界发展(0017)旗下Upper Start分别收购CSL 76.4%及23.6%股权,包括CSL旗下1010、one2free及新世界传动网品牌。CSL原为本港四大流动电讯商龙头,坐拥390万客户,市占率约23.2%,香港电讯并购CSL后,合计客户数目急增2.4倍至555万户,市占率由第4位的约10%升至约33%,令李泽楷的电盈自2001年出售CSL后,再度成为本港电讯市场龙头大哥。电盈当年出售CSL合共套现约180亿元。

Changi Airport Group and CapitaMalls Asia signs JV deal to develop Project Jewel at Changi Airport

Changi Airport Group and CapitaMalls Asia signs JV deal to develop Project Jewel at Changi Airport

Written by The Edge  
Friday, 20 December 2013 20:32
Changi Airport Group (CAG) and CapitaMalls Asia have signed a joint venture (JV) agreement to develop an iconic mixed-use development at Changi Airport – codenamed Project Jewel.

The JV deal was signed by their respective wholly-owned subsidiaries, Jewel Changi Airport Holding and CMA Singapore Investments.

Including land cost, the development cost of Project Jewel is expected to be about $1.47 billion.

NAVIGATING HONG KONG & CHINA : No risk, no return (CIMB)

No risk, no return

China’s multi-year P/E de-rating should begin to reverse in 2014 on the back of a modestdecline in the equity risk premium and a stabilization in long-term earnings growth. Balancing structural and social objectives comeswith significant risk but the speed and sequencing of reform is at policy makers’ discretion. Pragmatism suggests that long-term goals will not be pursued at all cost. We expect Chinese equities to rise 20% in 2014 driven by a re-rating in financials (banks and insurance) and selected cyclicals more than offsetting the drag generated by areas subject to deleveraging and consolidation pressure.

Capital Dynamics Tan Teng Boo - NYSE `Priced for Perfection'

China Construction Bank : Top pick among large banks (CIMB)

China Construction Bank
Current HK$6.27
Target HK$9.01
Top pick among large banks

CCB remains our top pick among the large state-owned banks. We like the bank for its high returns, excellent funding franchise and extremely strong balance sheet.

Under our new rating structure, our call for CCB changes to Add, from Outperform. Catalysts to unlock value include greater clarity on the pace and impact of China’s economic reforms, improving macro data and possible positive surprises on asset quality. We maintain our GGM-based HK$9.01 target price (1.42x FY14 P/BV).

Bank of China : Largest exposure outside China (CIMB)

Bank of China
Current HK$3.73
Target HK$3.79
Largest exposure outside China

BOC has the most stable NIM in the sector and should do well when US rates rise. We are held back by the fact that the bank’s large non-China exposure means it is likely to benefit less than its peers in a China economic recovery.

BOC is a Hold under our new rating structure, from Neutral previously. Catalysts for unlocking value include greater clarity on the pace and impact of China’s economic reforms, improving macro data and possible positive surprises in asset quality. We maintain our GGM-based HK$3.79 target price (0.81x FY14 P/BV).

Agricultural Bank of China : Better asset quality and clarity on capital (CIMB)

Agricultural Bank of China
Current HK$3.96
Target HK$4.66
Better asset quality and clarity on capital

Asset quality is likely to remain a key theme for ABC. Beyond that, we like its strong funding franchise and robust growth in higher-margin retail banking.

Catalysts for unlocking value include greater clarity on the pace and impact of China’s economic reforms, improving macro data and possible positive surprises in asset quality. Under our new rating structure, our call for ABC changes to Add from Outperform. We maintain our GGM-based HK$4.66 target price (1.19x FY14 P/BV).

China banks : A solid earnings year (CIMB)

A solid earnings year
We expect 2014 to be a strong year for China banks. Earnings delivery is likely to be supported by the government’s pledge for stable economic growth, while re-rating catalysts could come from increased momentum in economic reforms.

While we are positive on the sector (Overweight maintained), we very much prefer the large state-owned banks over the joint-stock and rural commercial banks. Our top picks are ICBC, CCB and ABC.

Dr ChanYanChong-Commentary 20.12.2013 -2013 Comes To An End, What Is Up Next For 2014?

20 DECEMBER 2013
2013 Comes To An End, What Is Up Next For 2014?
By Dr Chan Yan Chong

Singapore experienced her first riot in 44 years on 8 December evening this year. Singaporeans below 40 years of age would never have seen riots, demonstrations nor strikes on their home soil before until lately, when we saw bus drivers on strike and migrant workers going on a rampage. On 9 December, the Singapore stock market closed flat, with almost no changes in the Straits Times Index (STI); even when the STI fell 0.87 percent on 10 December, it was not considered a significant fall. I believe investors’ concerns were not so much about the destructions wrecked by the riot, but whether the Singapore Government will change its foreign labour policy because of the unrest. After all, the strike that happened earlier this year involved bus drivers from China, and the recent riot involved foreign workers from South Asia, primarily India.

Friday, December 20, 2013

Sheng Siong : Buy for yield (DBSV)

Sheng Siong Group
BUY S$0.58
STI : 3,053.77
Price Target: 12-Month S$0.80
Buy for yield

• Highest yielding stock among our Singapore consumer coverage universe at 4.9%
• Attractive dividend payout at 90% of earnings
• Yield of 4.9% lends supports to the share price
• Maintain BUY with S$0.80 TP

Met estimates despite earnings disappointment in the sector.

Osim International : A safe bet (DBSV)

Osim International
BUY S$2.28
STI : 3,053.77
Price Target: 12-month S$2.60
A safe bet

• Met estimates against earnings disappointment in the sector
• New products to propel growth next year
• Expect TWG to contribute more significantly
• Maintain BUY with S$2.60 TP

Marco Polo - Long-term Charters In The Pocket (DMG)

Marco Polo Marine - Long-term Charters In The Pocket
December 19, 2013
MPM has secured a 26-month contract for MP Prelude, a 13-month contract for MP Premier, and a 100-day contract for newly-acquired MP Prevail. The implied charter rates for these contracts at USD2.03- 2.12/bhp/day are higher than previous rates of USD1.50/bhp/day, but within our expectations. We estimate these charters will yield >45% net margins and > 64% asset ROEs, and provide good earnings visibility. Maintain BUY with SGD0.55 TP

Courts Asia : Compelling valuations (DBSV)

Courts Asia
BUY S$0.59
STI : 3,053.77
Price Target : 12-Month S$ 0.77
Compelling valuations

• Opportunity to accumulate at current valuations
• Credit tightening factored into share price; likely to end post-FYE Mar’14
• Valuation attractive at -1SD, downside risk looks limited on our below consensus growth estimates
• Maintain BUY with S$0.77 TP

Singapore Consumer Stock picks - Selective stance for 2014 (DBSV)

Stock picks - Selective stance for 2014
Adopt bottom-up strategy. We have selected stocks with: 1) Stronger fundamentals and better resilience to softening revenue and margin compression; 2) Oversold companies at attractive valuations; and 3) Stable earnings and dividend payout. On the back of our muted outlook for the sector, we advocate a selective stance in our picks, preferring to look to companies that continue to deliver growth on the back of a reasonable valuation (Osim), oversold counters with possible earnings recovery and growth in FY14F (Courts, Del Monte), and stable growth profile with yield (Sheng Siong).

Singapore Consumer 2014 Outlook - Be discerning in 2014 (DBSV)

Singapore Consumer 2014 Outlook -
Be discerning in 2014

• Advocate selective and bottom-up strategy for 2014
• FY14F overall earnings growth was reduced by 5ppts to 9% on slower private consumption and margins
• Possible de-rating risks for certain stocks if earnings continue to underperform, with average valuations at +1SD above historical mean
• Selective stock picks are Osim for growth, Courts and Del Monte for being oversold and Sheng Siong for yield

CapitaMalls Asia: Entrenching Its Presence (MKE)

CapitaMalls Asia
Buy (unchanged)
Share price: SGD1.895
Target price: SGD2.60 (from SGD2.56)
Entrenching Its Presence

Building up scale. CapitaMalls Asia (CMA) is focused on building up scale in regions where it already has a presence. Already the de facto market leader in Singapore, it recently added another two malls, namely, Westgate and Bedok Mall. In China, it seeks to concentrate on five key clusters to deepen its presence. We remain positive on CMA’s stable of malls, which largely caters to necessity shopping. We raise our TP slightly to SGD2.60, still pegged to a 10% discount to RNAV, as we tweak our assumptions following our visit to China. Reiterate BUY.

CapitaLand: Stepping In The Right Direction (MKE)

Buy (unchanged)
Share price: SGD2.95
Target price: SGD3.88 (from SGD4.10)
Stepping In The Right Direction

The ingredients are there, just need to execute well. CapitaLand has laid out its roadmap to achieve an ROE target of 8-12% on a sustainable basis. With a well-diversified business and a sharper focus on key markets, we believe the group has the necessary competencies to achieve its goals. In particular, we view its China exposure favourably and see it as an important growth market for CapitaLand. We have a BUY recommendation and lower TP to SGD3.88, pegged to a steeper 25% discount to RNAV (previously 20%) to factor in the uncertainties associated with QE tapering.

TAT HONG : Key takeaways from investor’s meeting (UOBKH)

Share Price S$0.88
Key takeaways from investor’s meeting

• Tat Hong provides crane rental, heavy lift, heavy haulage and equipment sales services. It is the largest crane company in the Asia-Pacific region, supplying cranes ranging from under 50 tonnes to 1,600 tonnes. Tat Hong has also aggressively expanded its tower crane rental business in China and is the second-largest tower crane company in the country.

Viva Industrial Trust : A mix of growth and stability (CIMB)

Viva Industrial Trust  
Current S$0.77
Target S$0.87
A mix of growth and stability

▊ Viva Industrial Trust (VIT) is focused on Business Parks (BPs), a proxy for Singapore’s progress into higher value-added services. This is a growth segment for the long-term, with embedded master lease/rental support to ensure mid-term stability in cash flows while VIT works to lease up its portfolio and raise passing rents. We initiate coverage on VIT with an Add rating. Our target price is based on a dividend discount model (DDM), with a discount rate of 9.1%, implying a FY14-15 yields of 8.7% and 9% respectively. Catalysts for VIT are surprises in earnings delivery and higher occupancy.

曾淵滄專欄 20.12.13:大戶撳掣掀沽貨潮



Tigerair : Unveils Bold Initiatives (UOBKH)

Share Price S$ 0.52
Target Price S$ 0.58
Unveils Bold Initiatives; Upgrade To HOLD

We are enthused by Tigerair’s plans to diversify out of Southeast Asia into North Asia. While capital investment is low, it will substantially lower the balance sheet risk associated with excess fleet and falling residual value. More importantly, plans to jointly market parallel routes with Scoot could lead to better pricing power and cost savings. We thus raise our fair value by 35% to S0.58. Upgrade to HOLD. Entry price: S$0.50.

Technology Sector: Recovery likely but uncertainty lingers (OCBC)

Technology Sector:
Recovery likely but uncertainty lingers

The prospects of the cyclical tech sector are strongly intertwined with the global macroeconomic trends and outlook. Looking ahead to 2014, global economic growth is expected to outshine that of 2013. Hence, worldwide semiconductor sales, overall IT spending and the revenue of major EMS/ODM players are expected to experience positive growth in the coming year. Nevertheless, we believe uncertainties and downside risks remain, which may continue to affect business and consumer sentiment and thus the earnings visibility of tech companies. In light of the aforementioned factors, we maintain our NEUTRAL rating on the tech sector. Under our coverage, we downgrade ECS Holdings from buy to SELL, with an unchanged fair value estimate of S$0.585, as we believe its share price has outrun its fundamentals. Venture Corp [BUY; FV: S$8.50] is our new top pick in the sector, given its diverse customer base, strong balance sheet and sustainable dividend yield (FY13F: 6.7%).

Thursday, December 19, 2013


Fair value S$1.61
add: 12m dividend forecast S$0.08
versus: Current price S$1.41

To benefit from limited pipeline in Core CBD sub-market
We expect CCT to benefit from an improving Grade A office market in FY14 as rental levels reach a turning point in an environment of resilient absorption (9M13: 671k sq ft) and limited supply pipeline, with only CapitaGreen (~700k sq ft NLA) coming online in FY14 in the Core CBD sub-segment. After CapitaGreen, the next large set of Core CBD office supply in the pipeline will only come in 2016 with Marina One by M+S Ltd (1,880k sq ft), 5 Shenton Way by UIC Land (290k sq ft) and the redevelopment of International Factors Building and Robinson Towers by Tuan Sing (215k sq ft).

Healthcare S-REITs: Operationally stable (OCBC)

G. Healthcare REITs: Operationally stable
(Maintain NEUTRAL)
Year in review
Both healthcare REITs started the year positively in terms of share price performance, with Parkway Life REIT (PLREIT) and First REIT’s (FREIT) price returns hitting peaks of 29.8% and 36.3% in May and Apr, respectively. However, this was short-lived, as concerns over the possible tapering of QE by the US Federal Reserve sent the prices of SREITs tumbling, and both healthcare REITs were also affected by the market sell-down. YTD, PLREIT’s share price is down slightly by 0.5%, but this still ranks it as the second best performer in the S-REITs universe (excluding REITs which were listed this year). FREIT’s price has declined 2.4% YTD.

Hospitality S-REITs: Poor outlook for 2014 hospitality (OCBC)

F. Hospitality REITs: Poor outlook for 2014 hospitality
(Maintain NEUTRAL)
Another weak quarter for Singapore hotels in 3Q13
Hospitality REITs generally reported a set of uninspiring 3Q13 results, due to continued softness in the Singapore hospitality industry. CDL Hospitality Trusts’ (CDLHT) 3Q13 NPI contracted 1.7% YoY to S$33.0m chiefly due to a lackluster showing for its Singapore hotels in an environment where business travel budgets were tightened and competition heated up with additional hotel room supply. This quarter’s performance was in line with ours and the street’s estimates. Like 3Q13, 1Q13 and 2Q13 also saw CDLHT registering YoY declines in gross revenue, NPI and income available for distribution.

Industrial S-REITs: Downside risks lurking (OCBC)

E. Industrial REITs: Downside risks lurking
(Maintain NEUTRAL)
Firm 3Q13 results, with some positive surprises
Industrial REITs continued to turn in a firm set of results in 3Q13, as they still benefit from higher rents and contribution from completed acquisitions and development projects. There were some positive surprises for the quarter, with two (Ascendas REIT or A-REIT and Soilbuild REIT) out of four industrial landlords under our coverage performing above expectations due to stronger-than-expected rental income and better cost containment.

Overseas retail S-REITs – Possible headwinds (OCBC)

D. Overseas retail REITs – Possible headwinds
(Maintain NEUTRAL)
3QCY13 performance in line
Overall, the retail REITs subsector showed good YoY growth in NPI (7.8%) and income available for distribution (11.7%), although the YoY increase in DPU came out to only 0.5% due to the effect of placements by CapitaRetail China Trust (CRCT) and Fortune Real Estate Investment Trust (FRT) in Nov 2012 and Aug 2013 respectively.

CRCT, FRT and Lippo Malls Indonesia Retail Trust (LMIRT) all reported 3Q13 results that were in line with ours and the street’s expectations. FRT and LMIRT clocked healthy YoY growth in their NPI and distributable income of between 8.2%-20.7%.

Local retail S-REITs – Maintaining strong growth momentum (OCBC)

C. Local retail REITs – Maintaining strong growth momentum
Reaping respectable returns from past investments
Domestic retail landlords saw a robust DPU growth of 9.8% on average in 3Q13, as they continue to reap returns from their asset enhancement initiatives (AEIs) and newly acquired properties. The distribution of income retained over 1H13 also contributed to the boost in DPU for some of the local retail REITs. Mapletree Commercial Trust (MCT) again outperformed the pack with a strong 16.5% YoY increase in DPU, thanks to new income stream from its newly acquired Mapletree Anson, and a robust rental uplift and improved occupancy at existing portfolio assets.

Office S-REITs – Recovery ahead (OCBC)

B. Office REITs – Recovery ahead

Mixed performances in 3Q13
Office REITs displayed a mixed set of performances on their headline numbers in 3Q13 as a few of them have undergone through major overhauls in their portfolio and capital structure. For example, Frasers Commercial Trust (FCOT) saw its NPI decline 17.4% YoY due mainly to the divestment of KeyPoint and its Japan properties, but its DPU jumped 18.9% on lower interest costs and distributions following the redemption of its Convertible Perpetual Preferred Units (CPPUs). Suntec REIT,  on the other hand, saw NPI recover to a 4.7% YoY growth due to the opening of Phase 1 retail space and Suntec Singapore post enhancement works. As a result, a smaller capital distribution of S$4.5m (S$7.8m in 2Q) from CHIJMES sales proceeds was needed to mitigate the dip in distribution payout. This led to a DPU of 2.289 S cents, down 2.6% YoY. For the entire office REIT subsector, aggregate NPI fell 1.9% YoY in 3Q13, while the subsector DPU increased by 3.4%.

Singapore REITs: Fundamentally sound, but risks ahead (OCBC)

Singapore REITs:
Fundamentally sound, but risks ahead

The recent respite in the unit prices of S-REITs resulting from the delay in the US Fed tapering was short-lived. Looking ahead, we believe mounting risks from an impending reduction in bond purchases will continue to spook interest-rate sensitive equities such as S-REITs, leading to a potential share overhang or even further downward pressure from here.

However, we note that S-REITs are now fundamentally stronger, as they have been capitalizing on the low interest rate environment to embark on asset enhancement works to rejuvenate their assets and acquire quality assets. In addition, S-REITs have been very prudent on their capital management, in anticipation of the potential rise in interest rates spurred by the QE taper.

曾淵滄專欄 19.12.13:創業故事買少見少



CNOOC : Volume growth returns (CIMB)

CNOOC Limited
Current HK$15.58
Target HK$18.00
Volume growth returns

CNOOC’s new project pipeline will deliver strong growth in the near term. We forecast 11% volume growth for FY14.

We have an Add rating (changed from Outperform given our new rating structure) on CNOOC. Our target price remains HK$18, based on the historical average P/E of 9.8x during FY07-10 and implying upside of 16%. We think CNOOC’s current valuations are attractive. Catalysts include the commencement of production at Liwan by end-2013. CNOOC remains our top pick in the China oil and gas sector.

Fed to taper bond buying by $10 billion a month

The Federal Reserve announced Wednesday it would start to taper its aggressive bond-buying program to $75 billion a month beginning in January, propelling the market to a record close.

The FOMC also announced it would lower its monthly long-term Treasury bond purchases to $40 billion and mortgage-backed securities to $35 billion a month, both reductions of $5 billion.

"I think it logically, this is what they had to do," said David Kelly, managing director at JPMorgan Funds. "If you look at what's happened this year, the unemployment rate has come down to 7 percent. We've got housing starts over a million units. We got the S&P 500 up 25 percent. In this economy, you have to pull back from the most extreme monetary policy in a century. So I think it's overdue. I'm glad to see it."

Pacific Basin Shipping : The persevering workhorse (CIMB)

Pacific Basin Shipping
Current HK$5.41
Target HK$6.55
The persevering workhorse

The stockcontinues to trade at an undeserved discount to its underlying fleet value, despite a strong balance sheet and improving prospects. Investors cannot go wrong with a company that has never made a loss on its core bulk shipping business.

Under our new rating structure, our previous Outperform call becomes an Add. We retain our earnings forecasts and target price, still based on SOP valuation. Re-rating catalysts are expected from rising bulk ship values and a gradual recovery in bulk freight rates.

Wednesday, December 18, 2013

CNOOC : Project execution weaker than expected, cut 2014E production target (CS)

Price (13 Dec 13 , HK$) 15.08
TP (prev. TP HK$) 21.00 (21.00)
CNOOC Ltd: Project execution weaker than expected, cut 2014E production target

● We learnt that out of CNOOC’s ten planned new projects (offshore China) for 2013E, only five have been rolled out as of now. We suspect the remaining could be pushed into 2014E in view of a harsher operating environment further into winter.

● According to Woodmac, only seven new projects are coming on stream with total production rising 7.6% YoY in 2014E. Although Woodmac does not reflect the full production portfolio, we see increasing risks for a weaker-than-expected production in 2014E.

OUE :One Step Closer To C-REIT Listing (MKE)

OUE Limited
Buy (unchanged)
Share price: SGD2.46
Target price: SGD2.83 (from SGD3.05)
One Step Closer To C-REIT Listing

Spin-off gets EGM nod. OUE’s plan to divest OUE Bayfront into a commercial REIT (C-REIT) has been approved by shareholders at an EGM held on 4 December. The shareholders have also given the nod to a distribution in specie of OUE Hospitality Trust (OUEHT) units to OUE’s shareholders in lieu of a special cash dividend. We view this development positively as it preserves OUE’s cash to fund outstanding capex. We maintain our BUY recommendation with a lower TP of SGD2.83, pegged to a deeper 35% discount to RNAV (previously 30%) to factor in the uncertainties associated with QE tapering.

Parkson Retail Group : Misses after misses (CIMB)

Parkson Retail Group
Current HK$2.61
Target HK$2.00
Misses after misses

Parkson’s 4Q13-to-date same-store sales growth (SSSG) was still negative. 3Q13 net profit missed again after a series of misses since 2011. We believe that Parkson will continue to underperform its peers and the HSI until it can deliver a positive SSSG trend.

3Q13 net profit missed our forecast by 75%, based on the historical range, after the previous 34% 2Q13 earnings miss. As a result, we cut our FY13-15 EPS by 7-16%, causing our target price to fall to HK$2.00 – still based on 8x CY14 P/E, in line with its peers Maoye and NWDS. Under our new rating structure, our call changes to Reduce from Underperform The lack of a CFO replacement plan is a de-rating catalyst.

Tiger Airways : Unveils regional alliance strategy (CS)

Tiger Airways
Price (16 Dec 13 , S$) 0.52
TP (prev. TP S$) 0.47 (0.47)
Unveils regional alliance strategy

● Tiger Airways (Tigerair) has signed a series of agreements to develop regional alliances to accelerate its growth and improve assets utilisation. Tigerair has announced that it has signed an interline agreement with India's SpiceJet to connect 14 Indian cities onto Tigerair's flights to Singapore and beyond via Hyderabad airport.

S-REITs :Industrial REITs Sorely Hit (MKE)

Industrial REITs Sorely Hit

 Most punitive on industrial REITs. Following our sector report on 6 Dec 2013, the overall S-REITs market has tanked 2.7% with industrial REITs bearing the brunt – down 3.4% in five days (Figure 1). This segment saw correction across the board, with large-caps counters like A-REIT, MLT and MIT falling 2.9-3.7% over the period. Neither were the smaller caps spared – AAREIT/CACHE/SSREIT fell more than 4%.

Why industrial property prices jumped twofold in four years. Some clients have queried why industrial property prices were allowed to escalate to such high levels in the past 4-5 years post-GFC. We believe this was unintended and the reasons could be as follows:

2014: Singapore a Relative Pick as ASEAN Consolidates (CIti)

Think Singapore
2014: Singapore a Relative Pick as ASEAN Consolidates

 Catching up as ASEAN consolidates—While the STI Index (-2% YTD through 6 Dec) has underperformed Philippines and Malaysia, there has been a degree of relative outperformance for Singapore in the past six months as the US tapering phase gets priced in. We expect this relative trade to continue into 2014. Singapore, which had been hit earlier by slower momentum as its growth model rebalanced over the past two years, is now relatively more attractive as the pace of GDP growth picks up and currency, CAD woes and politics get in the way of neighbours Malaysia, Indonesia and Thailand. We expect GDP growth of 3.5% and 4.0% in 2014 and 2015 respectively post 4.0% in 2013 and 1.3% for 2012. We are looking for mild upside for the STI in 2014 – our Gordon Growth derived STI target is 3,278, translating to a P/E of 15.6x. The STI is now trading at ~14.7 P/E, below the historical mean of 15.2x and at 1.3x fwd P/B (below -0.5SD).

Hutchison Port Holdings Trust : pessimism over the trust's outlook appears overdone (JPM)

Hutchison Port Holdings Trust
Price: $0.62
Price Target: $0.75
Upgrading to OW, pessimism over the trust's outlook appears overdone

•HPHT has fallen by c20% since Nov (vs -4% for FTSTI) driven by concerns over the sustainability of its payout, given: (1) Yantian’s weak volume since the beginning of the peak season (throughput dropped 5% Y/Y during Aug-Oct); (2) Potential negative impact on HK's transshipment (“T/S”) with the upcoming formation of P3 network; (3) Challenges to HK’s status with China’s establishment of free trade zones, first started in Shanghai and to be rolled out to other major ports in the coming years.

Hospitality Sector: Opening weakly in 2014 (OCBC)

Hospitality Sector: Opening weakly in 2014

The dreariness that characterized the Singapore hospitality industry over 2013 looks set to continue into 1Q14 with the subdued global business sentiment, a strong Singapore dollar and increasing competition with an expanding supply of hotels. Our channel checks indicate that hotel bookings up to Feb 2014 are still weak, despite an expected pickup to the number of MICE events for 2014. We project that for end-2012 to end-2015, hotel room demand will grow at a CAGR of 5.4%, while hotel room supply will expand at a CAGR of 6.5%. Given this, the industry is facing a mild oversupply situation. We project that 2014 RevPAR growth for the industry will be in the low single-digit percentages at best, and do not rule out another year of contraction. We are maintaining our NEUTRAL rating on the Singapore hospitality sector and do not see any significant growth catalysts in the short-term. Our top pick is Global Premium Hotels [BUY, FV: S$0.33]. The 1H14 opening of its second mid-tier hotel, Parc Sovereign Tyrwhitt, could boost GPH’s net income by ~17% in 2014.

曾淵滄專欄 18.12.13:信達染藍指日可待



Silverlake Axis: Fairly Valued After A Stellar Performance (UOBKH)

Silverlake Axis
Share Price S$0.935
Target Price S$0.91
Fairly Valued After A Stellar Performance

After its outperformance ytd, we think the stock’s current valuations reflect its solid fundamentals and good prospects. FY14 will be a year of new contract wins and fullyear contributions from Merimen Ventures and Cyber Village. Its Chinese associate’s listing could take place in the medium term when China resumes IPOs in 2014. Downgrade to HOLD and maintain target price at S$0.91. Entry price: S$0.80.

Industrial REITS: Downside risks lurking (OCBC)

Industrial REITs continued to turn in firm results in 3Q13. However, subsector portfolio occupancy encountered a marked sequential decline of 2.9ppt to 94.8%. For 2014, we are keeping our cautious view on the industrial REIT subsector, as we believe industrial rents may stay relatively flat amid the influx of industrial supply and scale back in leasing enquiries for factory space. We also highlight again the possibility that industrial REITs may continue to face difficulties in acquiring industrial properties that are yield-accretive. Nevertheless, more industrial REITs are turning to asset enhancement initiatives/(re)developments to grow their income, and this should help to cushion the moderating growth trend. We are maintaining our NEUTRAL view on the industrial REIT subsector. We choose Ascendas REIT [BUY, S$2.45 FV] and Cache Logistics Trust [BUY, S$1.30 FV] as our preferred picks due to their strong earnings visibility, robust financial position and compelling yields.

Tuesday, December 17, 2013

CapitaCommercial Trust -Outlook 2014 (UBS)

CapitaCommercial Trust
Rating: Buy (price target: S$1.72)

Outlook 2014
We see signs of recovery in the office sector. Interest from larger tenants (banks, financial services and wealth management companies) has been growing as they seek to leverage low rents to consolidate operations. The sweet spot for demand appears to be floor plates of 20,000 sqft and below. We expect demand drivers to continue to come from legal services, multinationals setting up regional headquarters in Singapore, as well as insurance and wealth management companies. Consultants we spoke to are also more confident on the leasing outlook. We believe rents have troughed, and that the pace of recovery will gain momentum through 2014.

CapitaMalls Asia -Outlook 2014 (UBS)

CapitaMalls Asia
Rating: Buy (price target: S$2.35)

Outlook 2014
With continued government oversight in the China and Singapore residential markets, we think the retail sector is attractive and offers exposure to a stable and defensive asset class that is less prone to policy risk. We forecast a 2012-15 core profit after tax and minority interest (PATMI) CAGR of 22% (excluding revaluation gains). We expect Singapore to be a near-term earnings driver and China to be a medium-term catalyst as its operations ramp up. CapitaMalls Asia’s (CMA’s) expertise in mall positioning and value enhancements should also result in development gains and NAV expansion.

CapitaMall Trust - Outlook 2014 (UBS)

CapitaMall Trust
Rating: Buy (price target: S$2.18)

Outlook 2014
We think CapitaMall Trust (CMT) will continue to benefit from its earlier asset enhancements such as at Bugis+ and Atrium@Orchard. Greenfield developments such as Westgate should also help underpin future distribution growth. Our checks indicate Westgate (416,000sqft retail NLA) is >85% pre-committed, and will complete by December 2013, with average signing rents in the S$15-16psf/month range. Contributions should ramp up more meaningfully in H114 after the initial fit out period.

M1 - Outlook 2014 (UBS)

Rating: Buy (price target: S$3.75)

Outlook 2014
We expect a stable year for M1 in 2014, with steady growth in revenue (up 3% YoY) and a stable margin versus 2013, leading to 4% and 6% YoY increases in EBITDA and net profit, respectively. We expect DPS to grow 6% in 2014 to 15.1cents/share

Revenue: We expect M1’s strong mobile data growth momentum to continue in 2014, partly offset by declining voice revenue and lower international call services. On the fixedline side, we expect strong growth in fibre on low base, but M1’s pay TV business is still in too early a stage to make a meaningful impact.

Neptune Orient Lines - Outlook 2014 (UBS)

Neptune Orient Lines
Rating: Neutral (price target S$1.20)

Outlook 2014
We expect NOL to continue to suffer from industry-wide overcapacity and low freight rates. We expect the global container shipping industry to remain oversupplied at least until 2015. The expected formation of P3 alliance is also likely to push freight rates structurally lower over time and add pressure to NOL.

While the revenue outlook for NOL remains sluggish, we think any turnaround will only come from cost-savings driven by lower vessel slot costs with the delivery of its larger and more fuel efficient ships. We estimate by the end of 2015, NOL's average vessel size will become comparable with its G6 alliance members and CKYH alliance competitor.

Wilmar International -Outlook 2014 (UBS)

Wilmar International
Rating: Neutral (price target: S$3.55

Outlook 2014
Wilmar is a diversified and vertically integrated soft commodity producer and trader. For earnings growth to resume, we believe the key drivers need to be the oilseed and grains division, and the plantations and palm mills division. We expect crush margins to remain low, which will likely lead to flat earnings from the oilseed and grains division. We are also a little concerned about medium- to long-term CPO pricing, which could weigh on the plantations division’s earnings.

Midas Holdings - Speeding ahead (DBSV)

Midas Holdings -
BUY S$0.49
STI : 3,113.64
Price Target: 12-Month S$0.64 (Prev S$0.60)
Speeding ahead

• Firm earnings rebound expected in FY14F as high-speed railway (HSR) contracts roll in
• Potential huge HSR order for Midas from second rolling stock tender for 314 sets
• Metro and overseas contracts to continue boosting the Group’s order book
• Maintain BUY, with our 12-month TP raised to S$0.64, based on 1.2x FY14F P/BV

Yoma Strategic : buys land to build hotel (DBSV)

Yoma Strategic Holdings -
BUY S$0.735
STI : 3,081.72
Price Target : 12-Month S$ 1.02
buys land to build hotel

• Acquiring 80% stake in JV company to build 46- room hotel in Pun Hlaing Golf Estate
• To invest US$2.4m for the land and US$9.4m for construction
• This move will strengthen Yoma's interest in tourism, but it needs to address financial and human capital issues for this development

Rotary Engineering : Light at the end of the tunnel (CIMB)

Rotary Engineering
Current S$0.66
Light at the end of the tunnel

 With the loss-making SATORP project coming to an end and backed by a robust order book of S$1bn, Rotary’s turnaround has begun. The lessons learnt from SATORP’s failure will lead to prudent selection of projects and attention to cost management.

The peak valuation for Rotary could be S$0.92 (historical average forward P/E of 9.75x on CY15 consensus EPS forecast of 9.4 Scts). Dividend yields based on consensus forecasts are 4.6% for FY14 and 5.3% for FY15. Catalysts are new order wins and earnings recovery post SATORP.

曾淵滄專欄 17.12.13:跌穿23000可低吸



Yangzijiang Shipbuilding- Outlook 2014 (UBS)

Yangzijiang Shipbuilding
Rating: Neutral (price target: S$1.21)

Outlook 2014
As a result of a strong pick up in order book wins in H213, YZJ will end 2013 with good revenue visibility for 2014. Year-to-date, YZJ has secured over around US$2.6bn of contracts, and the company expects another US$500m by the end of 2013. These contracts materialise at a critical juncture. The 2014 order book had been running down after very low order volumes in 2011 and 2012. In response to difficult market conditions, YZJ had cut capacity at Changbo and Xinfu shipyards. Even then, 2015 was looking quite bare. To illustrate, YZJ had started 2013 with just 64 vessels left in its order book, of which about half would have been delivered by the end of this year. This is also the first year since 2007 where orders secured surpass revenue recognised. With these orders in hand, YZJ has secured its best order book wins since 2007, and heads into 2014 in less dire circumstances.

Singapore Market Strategy - 2014 outlook: A safer path to growth (CS)

Singapore Market Strategy -
2014 outlook: A safer path to growth

■ Singapore: Positioned for 'growth' and 'taper'. There are two major global themes likely in 2014: (1) an acceleration of global GDP growth (positive) and (2) a US 'taper' (potential currency and yield volatility; negative). With a stable (to strengthening) currency, inexpensive valuations, and yet with strong global linkages, we believe the Singapore equity market offers a unique, low-volatility exposure to potential growth improvement. The MSCI Singapore trades at 13.7x P/E, in line with its long-term average, and the one-month forward EPS for the market has been flat for almost 46 months. Growth can improve both.

Monday, December 16, 2013

投资大师:慎防美国盛极而衰 目前非买黄金最佳时机

投资大师:慎防美国盛极而衰 目前非买黄金最佳时机
Created 12/15/2013 - 07:35
(纽约14日讯)商品投资大师———罗杰斯(Jim Rogers),担忧美国恐怕会走上英国盛极而衰的老路,呼吁所有人都要慎防美国崩溃,他认为目前并非买黄金保险的最佳时机。



外国著名商家进驻抢滩 大马e商务发威

外国著名商家进驻抢滩 大马e商务发威
Created 12/16/2013 - 12:34


Ascendas REIT -Outlook 2014 (UBS)

Ascendas REIT
Rating: Sell (price target: S$2.21)

We expect the pace of Ascendas REIT’s (AREIT's) rental growth to slow in FY15, as the gap between expiring and market rents narrows. To offset this, AREIT could drive portfolio occupancies up from the current 90.1%, which was 3.5ppt lower QoQ, due to the recent completions of Nexus@one-north and A-REIT City@Jinqiao. We are cautious on net expansionary demand for industrial space, as leasing activity has slowed in the past quarters, although AREIT's portfolio suggests there may be pockets of new demand from sectors such as precision engineering and transport & storage.

Singapore Analyser - Outlook 2014 (UBS)

Singapore Analyser - Outlook 2014
Modest GDP growth outlook
UBS forecasts 4.5% GDP growth for Singapore in 2014, led by a cyclical recovery in global growth. We expect the Monetary Authority of Singapore to continue its policy of nominal effective exchange rate appreciation and estimate 2014 consumer price index growth of 3.1%, with a tight labour market and low unemployment rate.

Three investment themes for 2014
1) Global cyclical recovery takes shape—stocks we like have business models leveraged to the recovery and a significant proportion of earnings generated outside Singapore.
 2) QE tapering commences—we expect short-term Singapore dollar rates to remain low, while the yield curve continues to steepen. We think banks could continue to do well in this environment. We are selective on REITs, preferring those where tapering is priced in, and that provide potential DPU upside from a cyclical recovery.
3) China—we like stocks with exposure to secular growth in consumption and potential upside from policy reform.

Jaya Holdings : Harvest time (CIMB)

Jaya Holdings
Current S$0.68
Target S$0.90
Harvest time

After three years of trials and tribulations, we believe that Jaya has firmly corrected its course. The tangible beacon was the full-year DPS of 4 Scts for FY13. As its endeavours to change its earnings profile (from a lumpy one to a recurring model) have started to bear fruit, we expect the stock to be re-rated.

Our FY14-16 forecasts and target price, still based on 1x CY14 P/BV (its 4-year mean), are intact. Under our new rating structure, our call changes from Outperform to Add. Catalysts could come from stronger chartering operations and shipbuilding wins.

Yongnam Holdings : Now a rag doll? (CIMB)

Yongnam Holdings
Current S$0.25
Target S$0.20
Now a rag doll?

Contractors are battling a harsh operating environment and YNH is no exception. Its initial Myanmar catalyst came to an abrupt end recently. Unfortunately, new orders from elsewhere are also missing.

Our target price remains set at 5x CY15 P/E, its 3-year mean. A lack of convincing contract wins and margin squeeze are de-rating catalysts, in our view. Under our revised rating structure, our rating changes from Underperform to Reduce.

Vard Holdings : 2014 to be a consolidation year (CIMB)

Vard Holdings Ltd
Current S$0.80
Target S$0.98
2014 to be a consolidation year

To say that 2013 was a rollercoaster year for Vard would be an understatement. The group underwent a change in majority owner, got hurt by Brazilian execution issues, opened its new Promar yard and clinched its biggest order yet. We expect 2014 to be a year of consolidation for the group as it delivers the problematic projects.

We maintain our FY13-15 EPS forecasts and target price, based on 9x CY15 P/E, 10% above its mean since IPO. Under our new rating structure, our call changes from Outperform to Add. Catalysts could come from stronger earnings and orders.

Tiger Airways : Struggling amid headwinds (CIMB)

Tiger Airways
Current S$0.52
Target S$0.47
Struggling amid headwinds

Tiger Airways has struggled to register sustainable earnings since FY12, only recording one profitable quarter over the past ten quarters. We see the losses persisting at least until FY16, as yields will remain suppressed by overcapacity.

Under our new rating structure, our Underperform call on Tiger Airways changes to Reduce. We maintain our target price, based on 1x CY14 P/BV. Tiger will struggle to make headway in the Philippines and Indonesia as a late entrant while its Australian operations are beset by yield pressures. Its core Singapore operations are also struggling with overcapacity. Persistent losses will be Tiger's key de-rating catalyst.

Tat Hong : Not so TAT-tered Barbie or a beautiful rag doll? (CIMB)

Tat Hong Holdings
Current S$0.89
Target S$0.93
Not so TAT-tered Barbie or a beautiful rag doll?

While land-optimisation programmes have been put in place, we believe that investors would rather see a convincing recovery in its Australian operations. We believe any spike in profitability in 2014 will stem more from non-operational land divestments.

Uncertainties in Australia should eclipse other growth engines and hinder better valuations as in the past. Our target price stays at S$0.93 (7x CY15 P/E, 1 s.d. below its 5-year average forward P/E). Under our revised rating structure, our rating changes from Neutral to Hold.

Wilmar International : Underappreciated assets (CIMB)

Wilmar International
Current S$3.58
Target S$4.12
Underappreciated assets

We like Wilmar as we believe that investors have overlooked the potential of the group's strong integrated agribusiness model, due to concerns over weak crushing margins in China and rising refining capacities in Indonesia.

The stock's attractive P/BV of 1.2x, vs. the historical average of 1.9x, suggests that investors have priced in all these concerns but not the potential of its investments in sugar, flour, rice and downstream facilities. Under our new rating structure, our call changes from Outperform to Add. We maintain our SOP-based target price, with recovering earnings as the key rerating catalyst.

Thai Beverage : Resilient spirits (CIMB)

Thai Beverage
Current S$0.48
Target S$0.76
Resilient spirits

The resilience of Thai Beverage’s spirits business was well demonstrated in 3Q13 when volumes came streaming back. The losses at its non-alcoholic beverage division narrowed, but we think it is still too early to pass judgment on the sustainability of its recovery.

We make no changes to our earnings estimates and SOP-based target price. Under our revised rating structure, we change our call from Outperform to Add. Catalysts include further corporate restructuring.

SATS : Yield and growth (CIMB)

Current S$3.16
Target S$3.77
Yield and growth

SATS offers a good dividend yield of 5%, backed by net cash of S$270m. It is our preferred pick relative to the other two airport services/MRO proxies for its cheaper valuations and stronger earnings growth.

We adjust our expectations for food solutions to account for weaker yoy revenue from Japan’s TFK. Our EPS is cut by 3% for FY14-16 . Accordingly, our target price is reduced to S$3.77, still based on 17.7x P/E or 1 s.d. above its 5-year mean. Catalysts are stronger-than-expected dividend payouts and a rebound in TFK. Under our new rating structure, our call changes from Outperform to Add.

曾淵滄專欄 16.12.13:股樓預測趨兩極化



Starhill Global REIT : No meaningful catalysts in the stars (CIMB)

Starhill Global REIT
Current S$0.79
Target S$0.86
No meaningful catalysts in the stars

Although the performance of SGREIT’s portfolio continues to be stable, we believe the upside to this stock is capped as a result of foreign exchange risks and, more importantly, the lack of clear, meaningful growth catalysts.

The successful negotiation with Toshin has boosted earnings for Starhill Global REIT (SGREIT) in FY13. However, the lack of potential growth catalysts limits further growth in this stock. Under our new rating structure, our Neutral call changes to a Hold. Our DDM-based target price (discount rate: 8.1%) is unchanged.

SMRT Corporation : Don‟t go out in the rain (CIMB)

SMRT Corporation
Current S$1.30
Target S$1.06
Don‟t go out in the rain

After a series of earnings disappointments, no thanks to a nightmarish mix of higher opex and the lack of a fare hike, things might get better for SMRT in 2014. Management’s proactive stance in growing its non-fare business domestically and overseas is admirable.

Under our revised rating structure, our call changes from Underperform to Reduce. We maintain our DCF-based target price (WACC 6.5%) of S$1.06. We see de-rating catalysts coming from poor earnings related to cost issues and an inability to navigate regulatory constraints.

Sunday, December 15, 2013

CapitaLand - Outlook 2014 (UBS)

Rating: Buy (price target: S$4.32)

Outlook 2014
In 2014, we believe management will continue to drive efficiencies and streamline operations. The key focus will be in the markets of Singapore and China. Non-core holdings will be under review and could be divested. Its medium-term goal is to achieve 8-12% ROE on a sustainable basis with an optimum growth profile comprising one-third development properties and two-thirds recurring income. The focus will be on integrated large scale projects, particularly in China.

Genting Singapore -Outlook 2014 (UBS)

Genting Singapore
Rating: Buy (price target: S$1.69)

Outlook 2014
We expect Genting Singapore (GENS) to generate strong EBITDA growth of 28% YoY in 2014, primarily driven by 10% YoY growth in VIP rolling chip volume and low-base effect (the H113 hold of 2.1-2.5% was below the theoretical hold of 2.85%), while mass revenue should remain flattish due to continued strict measures on local visitors. VIP rolling chip volume was above expectations in the first nine months of 2013. While lowbase effect has contributed to the strong growth rates, GENS indicated that Resorts World Sentosa (RWS) is attracting new VIP customer interest due to its own marketing efforts. Although it is still risky to extrapolate the strong growth rates into 2014, the increased customer base should support a smoother VIP trend and hold rates going forward.

Hutchison Port Holdings Trust - Outlook 2014 (UBS)

Hutchison Port Holdings Trust
Rating: Neutral (price target US$0.75)

Outlook 2014
We see a few uncertainties in 2014 on the volume outlook for the following reasons: 1) the formation of P3 by the world's three largest container shipping companies may lead to reduced trans-shipment volume and less bargaining power for ports; 2) Hong Kong's position as the regional trans-shipment hub may be challenged by Shanghai, as the latter benefits from the Free Trade Zone policy; and 3) Yantian faces continuing competition from West Shenzhen ports and Nansha in Guangzhou. Furthermore, 2014 may be further challenged by Yantian's rising effective tax due to the expiry of tax holidays.

YTL Power International : Not out of the game yet (CIMB)

YTL Power International
Current RM1.80
Target RM2.55
Not out of the game yet

The potential clinching of Track 3B will allow YTL Power to returnto the regulated assets space in Malaysia. Although its broadband business may not break even in FY06/14, we believe the growth in subscriber base is encouraging.

Due to the revision in our recommendation structure, YTL Power is now an Add (from Outperform previously). Our SOP-based target price is unchanged at RM2.55. We expect the clinching of Track 3B to catalyse the stock.

Tune Ins : Spreading its wings in 2014 (CIMB)

Tune Ins Holdings Bhd
Current RM1.89
Target RM2.55
Spreading its wings in 2014

The key initiative in 2014 will still be the regional expansion of its travel insurance (TI) business through AirAsia and new tie-ups with other airlines. Locally, it will be focussing on transforming its non-life entity to enhance its underwriting margins.

We retain our DDM-based target price (cost of equity of 9.2%; long-term growth of 5%). Under our revised rating structure, our recommendation changes from Outperform to Add. The potential re-rating catalysts are (1) swift expansion in travel insurance, (2) EPS-accretive M&A in Indonesia, and (3) improving underwriting margins for the non-life business in Malaysia.

Supermax Corp : Strong growth but low P/E (CIMB)

Supermax Corp
Current RM2.70
Target RM3.89
Strong growth but low P/E

Supermax is currently experiencing a high utilisation rate and aggressive expansion will enable the company to ride the strong demand for nitrile gloves.

Under our revised rating structure, our call changes from Outperform to Add. We continue to like the company for its strong growth, fast response in increasing nitrile capacity and attractive valuation. Our target price remains based on 13.5x CY15 P/E (30% discount to Hartalega‘s P/E).

MALAYSIA 1H14 Outlook : A Year Of Multiple Strategies (UOBKH)

1H14 Outlook
A Year Of Multiple Strategies

We expect a quiet opening to 2014 but a steady ascent to our end-14 FBMKLCI target of 1,900. Our target pegs the index at 15x prospective PE (mean: 14.6x), supported by ample domestic liquidity, mitigating slowing domestic consumption and downside risk to corporate earnings. We advocate a balanced strategy being fairly defensive at the start of the year, but strategically positioning for selected domestic investment themes as the year unfolds.

Commodities Sector: Upgrade to NEUTRAL (OCBC)

Commodities Sector:
Upgrade to NEUTRAL

As expected, the commodities sector performed relatively poorly against the broader market for most part of 2013, after we maintained our Underweight rating from 2012. While some of the commodity plays have staged a recovery in 2H13, we note that valuations are still looking pretty inexpensive. From this perspective, we upgrade our rating from Underweight to NEUTRAL. Although we do not see any stock that stands out at the moment, there may be some potential upgrades should there be an over-correction in the market on the back of the Fed tapering.


Saturday, December 14, 2013


Created 12/13/2013 - 11:08



Is this a good time to invest in hospitality stocks?

Sunway REIT : Not so sunny in 2014 (CIMB)

Sunway REIT
Current RM1.25
Target RM1.33
Not so sunny in 2014

The macroeconomic outlook for REITs is not particularly favourable in 2014 due to a potential rise in interest rates. Furthermore, we believe that Sunway REIT's NPI for FY6/14 and 1HFY6/15 will be negatively affected by its AEI for Sunway Putra Place.

Our DDM-based target price is reduced to RM1.33 after we increased our cost of equity to 9.7% (from 9.6%). Under our revised rating structure, our recommendation changes from Neutral to Hold. We believe that investor sentiment on M-REITs as a whole has waned due to the more positive market outlook. Furthermore, the risk of higher interest rates in 2014 will make the returns on REITs less attractive.

Star Publications : Star will get brighter (CIMB)

Star Publications
Current RM2.43
Target RM2.54
Star will get brighter

Despite its poor earnings performance due to an unavoidably weak print business, we believe Star is heading in the right direction. Most importantly, revenue from its digital platforms is improving.

We cut our FY14-15 EPS as we now believe its new businesses will take longer to turn profitable. Our target price dips accordingly, still set at 12.5x CY15 P/E (20% discount to our market target). Under our new rating structure, Star is a Hold (previously Neutral). Dividend yields of about 5% should compensate for its poor earnings while investors wait for its new businesses to bear fruit.

Pavilion REIT : No excitement in this pavilion (CIMB)

Pavilion REIT
Current RM1.30
Target RM1.31
No excitement in this pavilion

We expect Pavilion’s net property income (NPI) in 2014 to be driven by 2013’s rental reversions for 67% of its net lettable area (NLA). Higher earnings growth could come from new asset injections, but none are foreseen in the near-term horizon.

Our DDM-based target price is lowered to RM1.31 (from RM1.46) following adjustments to our cost of equity assumptions from 8.4% to 9.1%. Given the risk of higher interest rates in 2014, we think returns on REITs in general would be subdued. With the change in our recommendation structure, Pavilion REIT is now a Hold from a Neutral previously.

Muhibbah : Getting its mojo back (CIMB)

Muhibbah Engineering
Current RM2.38
Target RM3.05
Getting its mojo back

After turning in the best stock performance in our universe in 2013, Muhibbah still offers the most attractive turnaround prospects among the smaller-cap contractors in 2014. Its prospects are backed by oil & gas infrastructure & marine/port-related work, as well as a fabrication licence from Petronas.

Our target price remains based on a 30% discount to RNAV, using a 15.9x CY15 construction P/E, which is in line with the construction sector's 5-year average. A strong order-book recovery and further newsflow from the oil & gas sector should provide catalysts. Following a change in our rating structure, our rating for Muhibbah changes from Outperform to Add.

Malaysian Bulk Carriers : Sailing with the wind (CIMB)

Malaysian Bulk Carriers
Current RM1.79
Target RM2.01
Sailing with the wind

Bulk losses have generally narrowed over the recent quarters as the bulk rates have gradually improved amid slowing bulk carrier supply growth. We expect profits to rise in 2014 due to smaller bulk losses and stronger offshore earnings.

Under our new rating structure, our Outperform call on Maybulk changes to Add. Our forecasts and SOP-based target price are maintained. Share price rerating catalysts include the expected narrowing of dry bulk losses over the medium term as freight rates recover on the back of a slower pace of newbuilding deliveries.

KLCC Property Holdings : Softer earnings outlook (CIMB)

KLCC Property Holdings
Current RM6.03
Target RM6.10
Softer earnings outlook

KLCCP’s net property income (NPI) growth is likely to be subdued as new asset injections are unlikely any time soon. However, 2014 willsee its net profit boosted by lower tax rates as its stapled structure takes full effect.

Our DDM-based target price is reduced to RM6.10 (from RM6.90 previously) as we increase our cost of equity assumption to 8% from 7.3% previously. Due to the change in our rating structure KLCCP is now a Hold (from Neutral previously). For exposure to Malaysian property, we prefer the country‘s property developers instead.

CapitaMalls Malaysia Trust : In need of catalysts (CIMB)

CapitaMalls Malaysia Trust
Current RM1.39
Target RM1.47
In need of catalysts

We believe that CMMT's net property income (NPI) will be impacted by the weak performance of its Sg. Wang mall due to the ongoing MRT construction works. However, we anticipate that the AEI for the East Coast Mall will provide a buffer to its NPI.

Our DDM target price drops to RM1.47 from RM1.74 previously, due to the rise in cost of equity to 9.2% (from 9% previously). Due to the change in our rating structure, our call changes from Neutral to Hold. We believe that the lack of acquisitions to strengthen its NPI and the risk of rising interest rates in 2014 could weigh on CMMT's share price performance. For exposure to Malaysian property, we suggest investors switch to the property developers.

Benalec : Tanjung Piai is the wild card (CIMB)

Benalec Holdings
Current RM1.02
Target RM1.05
Tanjung Piai is the wild card

The Tanjung Piai maiden reclamation contract is still Benalec's wild card in 2014 as it would pave the way for a mega reclamation deal (1,000 acres) for an oil & gas terminal. However, the limited progress indicates that there could be delays.

We cut RNAV to factor in further delays in the new land reclamation for the Tanjung Piai project. This lowers our target price, still pegged to a 50% RNAV discount. Benalec‘s FY14 earnings outlook hinges on the signing of the SPA for the Tanjung Piai reclamation project expected by end-2013. Under our new rating structure, our call changes from Neutral to Hold. Switch to Muhibbah Engineering.

Ann Joo Resources : The going remains tough (CIMB)

Ann Joo Resources
Current RM1.08
Target RM1.11
The going remains tough

Domestic demand for steel products should remain buoyant in 2014, but macro risks, forex losses and the threat of imports are likely to continue to weigh on Ann Joo's prospects. New policies to curb dumping from China could help, but that has yet to materialise.

Our target price falls as we apply a lower CY15 target P/E of 8.6x (11.1x earlier), pegged to a 40% discount to its 10-year historical average. Dumping is likely to continue and the persisting global concerns may curtail its exports. The recent electricity tariff hike presents medium-term cost risks. Under our new rating structure, our call changes to Hold from Neutral. We recommend a switch to contractors.

AirAsia X : Wrestling with competition (CIMB)

AirAsia X Bhd
Current RM1.04
Target RM1.11
Wrestling with competition

MAS is keeping up the pressure on AAX as it injects more capacity on a number of the routes that both carriers serve. Base yields are, therefore, likely to dip in 2014. AAX will have to bank on an improving ancillary yield to pick up the slack, which is far from certain.

Under our new rating structure, our Neutral call changes to Hold. Our target price is unchanged and is based on the sector average of 11x CY15 P/E. Base yields are likely to fall next year as competition on the KL-Australia route heats up. AAX's earnings are highly sensitive to yield changes so further yield weakness will dampen its growth sharply. We prefer MAHB.

AirAsia : Unrelenting yield pressure (CIMB)

AirAsia Bhd
Current RM2.41
Target RM2.55
Unrelenting yield pressure

The level of competition in the marketplace remains fierce, resulting in a disappointing 3Q13. We expect yield pressure to remain a prevalent feature in 2014 as MAS and Malindo continue to be overly ambitious with their capacity expansion.

Under our new rating structure, our Neutral call changes to Hold. Our target price remains based on 11x CY15 P/E, the sector average. Yield pressure will persist in 2014 as MAS is intent on defending its market share, leading to pedestrian group earnings growth in FY14-15 as Malaysia earnings fall, only to be offset by better associate earnings. Still, AirAsia remains the best in the field, given its low cost structure. Switch to MAHB.

Navigating Malaysia 2014:ETP progress report card (CIMB)

Navigating Malaysia 2014

ETP progress report card
The Economic Transformation Programme (ETP) was a key market catalyst even before it was officially rolled out in Sep2010.Threeyears have since passed and we analyse in this research its impact on the key winning sectors -oil & gas, construction and property.

As ETP has been well executed thus far, it will continue to be the key catalyst for the broader market. We introduce our new end-2014 KLCI target of 2,030pts, which is based on bottom-up targets for individual stocks rather than the top-down approach previously. Our sector preferences remain the ETP winners as well as companies in the small- to mid-cap space.
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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