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.


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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