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Empire StockChecks
STOCK CALL: BIOSENSOR 16 Oct
2009
Nomura initiates Biosensors International (B20.SG) at Buy, sets S$1.06 price
target. Broker says the drug-eluting stent (DES) maker moving into phase of
sustainable profitability as it comes out of its startup phase. "We see a
promising earnings outlook driven by market-share gains in Europe and Asia,
accelerating royalties from partner Terumo and significant contribution from its
50%-owned China JV." Says continued momentum in upcoming 2Q10 results, new
approvals to market its flagship product BioMatrix in France, China could be
potential share price catalysts. Says company is potential acquisition target
and in this scenario would be worth more than price target. "Biosensors is a
potential M&A target in the medtech space given its next-generation stent
technology and valuable DES franchise in China." Shares closed down 0.8% at
S$0.61 yesterday. (KIG)
BANKS
UOB ? 1Q09 Results
Results review UOB reported a 23.3% increase in core net earnings to S$409
mil (-22.7%yoy, +23.3%qoq, 4Q08: S$332 mil), which were inline with our
estimates. Net interest income fell 0.8% to S$949 mil with net interest
margins slightly lower at 2.41% as compared to 2.45% last quarter due to
lower loan spread.
PROPERTY
CapitaLand Ltd- Looks fairly-valued now OSPL -
SG:
Summary: CapitaLand (CapLand) had just completed its Rights issue last
month and raised gross proceeds of S$1,835.5m. After taking into
consideration of CapLand's subscription in CapitaMall Trust's Rights issue,
CapLand now has a cash hoard of S$5,698.1m and its net gearing has fallen
from 0.46x to 0.3x. Focus will now be on the deployment of the funds
raised, which could be a potential catalyst to the re-rating of CapLand's
shares. Its acquisition of Char Yong Garden (at S$1,788 psf ppr) and Farrer
Court (at ~S$780 psf ppr) could be at risk of write-down. Taking into
consideration CapLand's effective stakes in these two acquisitions, its
total exposure is ~S$877m or only ~6.3% of CapLand's book value. Our RNAV
estimate of CapLand has now been raised to S$3.06 (previously S$3.00) to
account for the increase in market valuation of its listed REITs and
investments. We maintain our 30% discount on our valuation of CapLand's
development profits and investment properties and no discount for its
listed investments. Our fair value of CapLand has now been raised to
S$2.51. As upside potential looks limited now, we are downgrading CapLand
to HOLD.
Keppel Land Ltd- Risk fairly reflected in
current market value OSPL - SG:
Summary: Property sale for Keppel Land (KepLand) is expected to remain slow
as its unsold properties and landbank are catered more towards the high-end
segment. Nevertheless, earnings in the property development segment will
continue to be driven by the progressive profit recognition of sold
projects in Singapore and overseas. Risk for KepLand is relatively higher
than its peers, given its higher RNAV exposure (~38% of RNAV, inclusive of
K-REIT) to the office sector in Singapore and limited scale of
diversification in its operations. Our RNAV estimate of KepLand has now
been raised to S$3.70 (previously S$3.67), due to the improvement in
valuation of K-REIT and Evergro. To reflect its higher risk profile, we
have pegged a 60% discount to our valuation of KepLand's development
profits and investment properties and no discount has been ascribed to its
listed investments. Our fair value of KepLand has now been raised to
S$1.79. As upside potential looks limited now, we are downgrading KepLand to
HOLD.
8 Sep 2009
Genting Singapore is getting very speculative recently as
everyone is putting very high hope on Integrated Resorts and Casino. However, I
am staying out of this stocks due to the following reasons:
(1) There is no fundamental to support the increase in the stock price. The
company has been losing money for the past two year and expected to continue to
make a loss this year.
(2) All future earnings of the company base on numerous assumptions. There are
assumptions that the economy will recover as per plan, tourism will pick up in
Singapore, the IR will be launched on time and have no delay, all revenues and
profit are base on projection, etc. For those who have involved in drafting a
business plan and doing a sales projection will know that everyone want to make
the plan looks GREAT in front of the management and analysts, otherwise we will
be challenged if the numbers do not meet the expectation. Very soon everyone
will start to realise that the reality is very far away from plan, and the stock
price will plunge!
(3) Looking at the chart, the stock price climbs too fast and become a parabolic
curve. This parabolic curve happened before in Dec 2007 where the stock price
went up 175% in one month. Then the stock price crashed 40% back to $0.75 within
two months. History always repeat itself, now the similar parabolic curve is
seen again. The price has gone up 70% in two months (remember: WITHOUT any
fundamental), we can predict what is going to happen next. In addition, there
are many speculative professional traders in the game. Unless we as retail
investors know what we are doing, it is better to stay out of this counter.
Genting
Singapore Plc -Place more chips - by Soh May Yee 11 Oct 2010
(GENS SP / GENS.SI, OUTPERFORM - Maintained, S$1.98 - Tgt. S$2.45, Travel and
Leisure)
Asians' passion for a flutter has spilled over from casino floors to casino
stock prices. But we believe the game is far from over even though the sector
has done spectacularly well YTD. The favourable economic climate will propel
demand from a captive target market with a naturally higher propensity to
gamble. While we are upbeat about Genting Singapore's (GS) long-term prospects,
we flag the risk of luck normalisation which could hit 3Q's numbers. However, we
retain our estimates which imply a S$6bn-8bn gaming pie for 2011-12 as there is
potential for upside for GS from i) the licensing of junket operators and ii)
prolonged market dominance. After i) applying an unchanged 15% premium to its
Macau peers' higher target EV/EBITDA of 14x instead of 12.5x and ii) rolling
over our valuation horizon to end-2011, our SOP-based target price rises from
S$1.88 to S$2.45. GS remains an OUTPERFORM with key re-rating catalysts being i)
a speedier ramp-up, ii) licensing of junket operators and iii) sustained market
leadership. Given the recent sharp share price outperformance, we see risks of
short-term weakness, especially if quarterly earnings disappoint.
MANUFACTURING
Venture Corporation Ltd 4 May 2009
Result note - Solid cash flow as expected - by Jonathan
Ng
(VMS SP / VENM.SI, OUTPERFORM - Maintained, S$5.96 -
Tgt.
S$7.50, Technology)
Venture's reported 1Q09 net profit of S$27.7m (-51% yoy)
was
spot on with our estimate, but 18% below Street
estimate.
However, core earnings of S$31.6m, excluding S$12.6m
of
marked-to-market losses and S$9.1m of forex gains, were
14%
ahead of our estimate on lower-than-expected opex.
1Q09
represents 17% and 15% of consensus and our
full-year
forecasts, respectively. Venture highlighted that
business
has stabilised. We are keeping our FY09-11 forecasts
intact,
but believe there could be upside to our FY09 forecast
if
Venture is able to write-back its marked-down CDOs in Dec
09.
We have also raised our target price from S$6.00 to
S$7.50,
now applying 10x CY10 earnings instead of 8x given the
P/E
expansion of its global peers as well as the recent
upgrade
in our FSSTI target from 1,800 to 2,160. Maintain Outperform.
SERVICES
Raffles Education 6 May 2009
Result note - ORIC written-off - by Ho Choon Seng CFA
(RLS SP / RLSE.SI, NEUTRAL - Maintained, S$0.51 - Tgt. S$0.44,
Education)
RLS's 3Q09 core net profit of S$11.5m (-41% yoy)
was below with our expectations, representing
11%
of our FY09 estimate and consensus due
to
higher-than-expected operating expenses
and
lower-than-expected student enrolment.
Reported
net loss of S$16.5m includes a one-off
Oriental
Century write-off (S$33.1m) and
profit
contribution reversal (S$1.5m). Our FY09-11
core
EPS estimates have been cut by 17-23% on the
back
of higher operating expense and lower
student
enrolment assumptions. On the other hand,
our
target price has been raised to S$0.44, now
based
on 9.5x CY10 P/E, from S$0.35, based on 6x
CY10
P/E, on account of lower market risk
aversion.
Maintain Neutral on valuation grounds.
Noble Group Ltd: 5 May 2009
Good performance despite harsh operating conditions
Summary: Noble Group Ltd (Noble) bettered our expectations with its 1Q09
results. Volume grew across all business segments, demonstrating the group's
ability to expand market share despite challenging operating conditions. Not
surprisingly, revenue and earnings fell as a result of the slump in commodities
prices. Revenue slipped 36.0% YoY to US$6.1b while net profit contracted 46.0%
to US$90.2m. Stripping away the impact of one-off gains in 1Q08, core net profit
would have contracted by a smaller 24.4%. Noble's balance sheet remained healthy
with an adjusted net cash position. Lower commodities prices eased working
capital requirements, leading to an improvement of operating cash inflow to
US$77.4m vs. an outflow of US$120.3m a year ago. Noble's credible showing in
1Q09 reaffirms our view that it is poised to leverage on the global economic
recovery. We maintain our BUY rating on the stock, and raise our fair value
estimate to S$1.66 (from S$1.33) to account for heightened risk appetite for
cyclical recovery stocks.
oceanus16 Jun 09
Oceanus Group Ltd (Oceanus) is engaged in the breeding, processing
and sale of abalones. It is the largest land-based abalone producer and one
of the lowest cost producers in the world. The group is in the expansion
phase of its business cycle. It has been expanding its abalone population
aggressively in preparation for exponential growth over the next few years.
We expect earnings to be driven by: (i) the rapid expansion of its abalone
population, (ii) the maturing age profile of its abalone, which will grow
to marketable sizes over the next two years, and (iii) downstream
activities such as its newly established restaurant chain and processing
activities. Oceanus offers growth amid a recessionary environment. We
initiate coverage on the stock with a BUY rating and S$0.40 fair value
estimate based on 2x blended FY09/10F NAV. Key risks include execution risk
and spread of diseases.
Oceanus Group (Hold, Downgrade from BUY S$0.275, Bloomberg: OCNUS SP)
Fairly valued for now
Price Target : 12-Month S$ 0.28 (Prev S$ 0.27)
By: Patrick Xu +65 6398 7957
Paul Yong CFA +86 21 6888 3372
· Developing on track at all fronts
· Funding secured, but at high costs
· Hold, TP S$0.28
Developing at all fronts. Expansion of downstream activities is on track
with positive contribution to earnings since 1Q09. Management is actively
negotiating with potential clients to build up its sales of canned marine
products. Oceanus Group has opened 2 new restaurants in Shanghai’s CBD,
which have already achieved cash flow breakeven levels. Farming capacity
increased to 24,000 tanks by end 1Q09, on track to reach its year-end
target of 40,000 tanks.
Financing secured but at high costs. Oceanus has secured a S$73.5m loan
from private equities at an interest of 9% and issued with 490m warrants to
the same creditors. The warrants are exercisable any time prior to the
later of 30 Jun 2012 or its 3rd anniversary at an exercise price of S$0.15
on a 1-for-1 basis. Exercise of the warrants will be accounted as Oceanus’
prepayment of the loan of equal amount, namely S$0.15 x warrants exercised.
The loan secured will finance most of the Group’s capex for 2009. However,
the high interest costs and potential dilution to share capital are key
concerns.
Good Prospects but priced-in. We revised our adj EPS forecasts downwards to
reflect higher finance costs and potential dilution to the share capital.
We continue to like Oceanus’ business prospects. However, current valuation
has priced in most of its potential value. Hence, we downgrade our call on
Oceanus to Hold, with a TP of S$0.28, based on 8x blended FY09/10 adj EPS
(previous: 6x), which we think justifiable in light of the Group’s higher
than average growth potential. Downside risk mainly lies in the execution
of its expansion plans.
Yangzijiang Shipbuilding (Holdings) (YZJ SP) 29 Apr 2009
Price/Tgt: S$0.45/nil Mkt Cap: US$1.1b Daily: Vol 16m 1-Yr
Hi/Lo:S$1.19/0.27
Results
- YZJ reported 22.3% yoy increase in 1Q09 PATMI of Rmb483.3m (16.7% higher
than consensus forecasts). This was mainly due to higher margins from
building larger vessels and an increase in the number of vessels delivered
(1Q09: 6 vs 1Q08: 5).
- Net profit margin was 23.1% (1Q08: 21.9%).
-Orderbook stands at US$6.7b comprising of 149 vessels (76 containerships;
73 dry bulk carriers).
Highlights
- There are about 3,000 shipyards in China. YZJ is one of the 30 shipyards
selected for the government shipbuilding stimulus scheme.
- For orders with 40% (20% cash + 20% bankers' guarantee) of deposits have
been received, YZJ will assist those shipowners by
1) Helping them in applying for bank financing.
2) Considering any request to delay vessel construction
3) Providing docking facilities for completed vessels for up to six months
4) Allowing customers to convert the vessel type
5) Reducing the costs of orders that were bought at a high price as long as
YZJ maintains 20% gross margin.
- YZJ's huge orderbook will keep them busy for the next four years.
- The company has plans to buy up distressed assets and benefit from them
when the market turns. However, they will only do so in 2010 earliest.
- The management does not think the shipping industry has hit bottom. It
will reach when 30% of shipbuilders and shipping companies go default.
- YZJ has a delivery schedule of 40, 45 and 50 vessels in 2009, 2010 and
2011 respectively. Currently, there are 24 vessels under constrcution.
Valuation
Based on consensus forecasts, YZJ is trading at 5.1x 2010 PE (4.9x 2009 PE)
and 1.3x 2010 PB (1.6x 2009 PB). As of 31st Mar 09, YZJ has a net cash of
Rmb 3.2m.
Yangzijiang Shipbuilding (Holdings) (YZJ SP) 5 Aug 2009
Yangzijiang Shipbuilding (Holdings) (YZJ SP) Not Rated
Price/Tgt: S$0.94/nil Mkt Cap: US$2.4b
Daily: Vol 19m 1-Yr Hi/Lo: S$0.95/0.27
2Q09 Post Analyst Briefing Update
Analyst: Esther Sim Tel: +65 6539 8479
Corporate Event
We attended the 2Q09 analyst briefing held by the management of
Yangzijiang Shipbuilding (Holdings) Ltd (YZJ) this morning.
Results
YZJ reported 80% yoy increase in 2Q09 PATMI of Rmb607.4m (+26%
qoq; 1Q09: Rmb483.3m).
This is mainly due to an improvement in productivity from the
new yard and higher profit recognition from three high margin
vessels delivered in 2Q09.
Eleven vessels were delivered in the quarter as compared to six
in 2Q08.
Orderbook stands US$6.1b comprising of 139 vessels or 2.54m CGT
(66 containerships, 73 dry bulk carriers)
Excluding restricted cash of Rmb3.2b, YZJ has a net cash of
Rmb4.8b.
Highlights
Till date, YZJ has not received any order cancellation of
vessels.
Eighteen vessels will be rescheduled by five to 24 months after
the Group has received 40% prepayment in cash.
A total rebate of US$38m was provided for eight high margin
vessels (GP margin >30%) in which the amount accounts for 5% of
vessel costs.
Out of the eight high margin vessels, three have been delivered
in 2Q09. The rest will be delivered by 2010.
In view of the numerous enquiries on multi-purpose cargo
vessels from customers, YZJ has begun construction on two
92,500 dwt vessels.
The new shipyard is currently operating at 50% capacity
utilization rate while the old yard is at full capacity.
YZJ plans to deliver 40 vessels in 2009, 45 in 2010 and 45 in
2011.
Valuation
Based on consensus forecasts, YZJ is trading at 10.2x 2010 PE
(9.5x 2009 PE) and 2.3x 2010 PB (2.8x 2009 PB).
Yangzijiang: Buy DBS
Research, 14 Oct'09
Yangzijiang is expected to report a stellar 3Q09 results similar to 2Q09 on the
back of favorable
steel prices and on track delivery when release on 3 Nov. Steel prices have
hovered at low levels
of RMB3000–4000/ton year-to-date and are not expected to pick up significantly
in the near term,
We project 3Q09 to record net profit of RMB550-600m on revenue of c.
RMB2.4billion. With this,
9M09 bottomline could make up 80%-85% of consensus forecasts, which will likely
call for a series
of earnings upgrades by the streets.
We continue to favor Yangzijiang for its solid execution and consistent earnings
delivery. The shipbuilding
track records of SGX-listed shipyards have generally been patchy, ranging from
estimated losses to
positive 23% gross margin. Yangzijiang has stood above its peers by achieving
consistent and better 19-23%
gross profit margin and 78% net profit CAGR in the 2004-08 periods; through its
superior raw materials
and forex hedging strategies and better order book quality.
Our target price is raised to S$1.36 following the earning revisions, still
pegged to 11x FY10 EPS. This is
in line with the average PE of regional peers.
SembCorp Marine
Ltd 11 May 2009
Result note - Strong quarter; upgraded order assumptions -
by
Lim Siew Khee
(SMM SP / SCMN.SI, OUTPERFORM - Maintained, S$2.75 -
Tgt.
S$3.00, Oil Equipment and
Services)
SMM's 1Q09 net profit of S$120m met our expectation,
forming
25% of our FY09 estimate and consensus. No major
surprises
except for lower associate earnings, dragged down by Cosco.
EBITDA margin inched up to 11% from 10% in 1Q08. Order
book
was S$8.6bn, with S$378m won to date. Together with
the
option from SeaDragon for a second semi-sub and
platform
project for Premier Oil, order wins could reach S$950m.
We
upgrade our order assumptions from S$1.5bn to S$2bn for
2009.
Our earnings estimates have been cut by 1-5% for FY09-10
but
raised by 7% for FY11, to reflect: 1) lower
contributions
from Cosco; 2) lower interest income and expense
assumptions;
and 3) upgraded order wins. Maintain Outperform with a
higher
target price of S$3.00 (from S$2.53), still based
on
sum-of-the-parts valuation.
Cosco Corporation (S) Ltd 11 May 2009
Result note - Operationally challenged - by Lim Siew Khee
(COS SP / COSC.SI,
UNDERPERFORM - Maintained, S$1.23 - Tgt. S$0.36, Oil Equipment and
Services)
Cosco's 1Q09 net profit was down 61% yoy to S$33m, forming 13% of our
FY09
estimate and consensus mainly on depressed margins
in
shipbuilding and a weak dry-bulk shipping business.
With new orders drying up and lower advance payments from
customers, Cosco's operating cash flow turned to a
negative S$250m. Separately, Cosco announced that a
European customer has cancelled a 57,000dwt bulk
carrier and rescheduled the delivery of three other vessels by about
three
months. We have cut our earnings estimates by 4-13%
for FY09-11 to reflect further weakness in
shipbuilding margins, lower ship-repair volume, higher
interest expense and higher tax. Maintain Underperform
and target price of S$0.36, still based
on
sum-of-the-parts valuation.
TECHNOLOGY
BNY Mellon Appointed as Depositary Bank by Sinotel Technologies Limited
NEW YORK, Sept. 30 /PRNewswire-FirstCall/ -- BNY Mellon, the global leader in
asset management and securities servicing, has been selected by Sinotel
Technologies Limited (Sinotel) as the depositary bank for its American
depositary receipt (ADR) program. Each Sinotel ADR represents 20 ordinary shares
and trades on the over-the-counter (OTC) market. Sinotel ordinary shares trade
on the Singapore Stock Exchange under the symbol "STEL."
Sinotel provides wireless telecommunication network infrastructure solutions,
hardware and software support, and distribution of telecommunication devices.
The company's Network Infrastructure Solution is a multi-carrier wireless system
that enhances customers' wireless telecommunication networks and is compatible
with various communication networks such as GSM, CDMA, PHS and WLAN as well as
3G networks. Sinotel's Network Support Solutions can also be integrated into
existing telecommunication network infrastructure to deploy new and enhanced
voice communication services for wireless users and to manage the provision of
value-added data services.
"By establishing this DR program we will be able to optimize U.S. investor
interest in our company," said, Jason Li, chief executive officer of Sinotel.
"We look forward to working with BNY Mellon and are confident that as the
world's leading depositary bank, they have the resources necessary to
effectively support our investor outreach initiatives and grow demand for our
DRs."
"We look forward to helping Sinotel raise its visibility and broaden its
shareholder base in the U.S.," said Michael Cole-Fontayn, chief executive
officer of BNY Mellon's Depositary Receipts business. "We are confident that
Sinotel's DR program will build upon their growing momentum and aid in their
global expansion. We are committed to providing Sinotel with all the resources
required to ensure this program is successful."
BNY Mellon acts as depositary for more than 2,100 American and global depositary
receipt programs, acting in partnership with leading companies from 67
countries. With an unrivalled commitment to helping securities issuers succeed
in the world's rapidly evolving financial markets, the Company delivers the
industry's most comprehensive suite of integrated depositary receipt, corporate
trust and stock transfer services. Additional information is available at
www.bnymellon.com/dr.
BNY Mellon is the corporate brand of The Bank of New York
Mellon Corporation (NYSE: BK). BNY Mellon is a global financial services company
focused on helping clients manage and service their financial assets, operating
in 34 countries and serving more than 100 markets. The company is a leading
provider of financial services for institutions, corporations and high-net-worth
individuals, providing superior asset management and wealth management, asset
servicing, issuer services, clearing services and treasury services through a
worldwide client-focused team. It has $20.7 trillion in assets under custody and
administration, $926 billion in assets under management, services $11.8 trillion
in outstanding debt, and processes global payments averaging $1.8 trillion per
day. Additional information is available at bnymellon.com.
This release is for informational purposes only. BNY Mellon provides no advice
nor recommendation or endorsement with respect to any company or securities.
Nothing herein shall be deemed to constitute an offer to sell or a solicitation
of an offer to buy securities. Depositary Receipts: Not FDIC, State or Federal
Agency Insured; May Lose Value; No Bank, State or Federal Agency Guarantee.
SOURCE BNY Mellon
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