MCI (P) 033/11/2013 Ref No: SGMN2013_0216 1 of 16 Morning Note Phillip Securities Research Pte Ltd Singapore 11 November 2013 Weekly Market Outlook Webinar Register HERE for the Monday webinar if you have not already done so. Source: Phillip Securities Research Pte Ltd Fundamental Call OUE Limited – Expect Upsides Pertaining Portfolio Rationalization Recommendation: ACCUMULATE Previous Close: S$ 2.36 Fair Value: S$ 2.82 OUE 3Q13 revenue increased 16.7% y-y to S$119.1mn, mainly due to the sale of Twin Peaks and revenue contribution from US Bank Tower Lower PATMI at S$13.38mn (-43.9% y-y), due to higher operating expenses, higher finances expenses, net non-recurring loss from sale of China hotels and revaluation of investment properties. Strong cash reserves at S$687.6 mn with proceeds the listing of OUE H-Trust and assets disposal Potential listing of OUE Commercial REIT Maintain Accumulate with fair value revised to $2.82 Source: Phillip Securities Research Pte Ltd
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MCI (P) 033/11/2013 Ref No: SGMN2013_0216 1 of 16
Morning Note
Phillip Securities Research Pte Ltd Singapore
11 November 2013
Weekly Market Outlook Webinar
Register HERE for the Monday webinar if you have not already done so.
OUE 3Q13 revenue increased 16.7% y-y to S$119.1mn, mainly due to the sale of Twin Peaks and revenue contribution from US Bank Tower
Lower PATMI at S$13.38mn (-43.9% y-y), due to higher operating expenses, higher finances expenses, net non-recurring loss from sale of China hotels and revaluation of investment properties.
Strong cash reserves at S$687.6 mn with proceeds the listing of OUE H-Trust and assets disposal Potential listing of OUE Commercial REIT Maintain Accumulate with fair value revised to $2.82 Source: Phillip Securities Research Pte Ltd
CSC Holdings Limited announced that it has been awarded a contract through its subsidiary CS Geo (Malaysia) Sdn Bhd, valued in excess of
RM80 million, for the construction of foundations as well as a two-storey basement for the new development, Bora Residences @ Tropicana Danga Bay in Iskandar, Johor. Work on this project is expected to commence in November 2013, and be completed by the first half of 2015. With this latest contract win, CSC has secured in excess of RM200 million worth of contracts in Malaysia since April 2013. (Closing Price S$0.101, -) Jardine Cycle & Carriage announced that Cheah Kim Teck will be stepping down from his current role as Chief Executive Officer, Group
Motor Operations of Jardine Cycle & Carriage at the end of the year. The Board would also like to announce that Haslam Preeston will be appointed as Regional Managing Director with effect from 1st February 2014 to succeed Kim Teck. (Closing Price S$35.650, -3.0%)
Tereos and Wilmar International Limited announced that they have formed a new joint venture, through their respective subsidiaries Syral
China Investment (“Tereos Syral”) and Wilmar China New Investments Pte. Ltd. (“WCNI”), in a PRC-incorporated company named Liaoning Yihai Kerry Tereos Starch Technology Co., Ltd. The JV Company will engage in the operation of a corn starch facility in Tieling (Liaoning Province), in northern China. The first industrial joint venture under the Wilmar-Tereos partnership involving the construction of a wheat starch facility in Dongguan, near Guangzhou, will be operational during the first half of 2014. This facility will have the capacity to process 500,000 tons of wheat to produce starch, glucose syrups and gluten. (Closing Price S$3.380, -2.0%) Source: SGX Masnet, The Business Times
Morning Note 11 November 2013
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Morning Commentary
STI: -0.78% to 3177.3 KLCI: -0.12% to 1804.5 JCI: -0.21% to 4476.7 SET: -1.42% to 1405.0 HSI: -0.60% to 22744.4 HSCEI: -0.80% to 10390 Nifty: -0.75% to 6140.8 ASX200: -0.39% to 5400.7 Nikkei: -1.00% to 14086 S&P500: +1.34% to 1770.6 MORNING COMMENTARY: Boustead Singapore (S$1.43, BUY TP S$1.935) By Joshua Tan
Boustead’s 2QFY3/14 earnings of S$9m were 41%y-y lower due to last year’s results being boosted by a non-recurring S$10.1m gain (gain on disposal plus overprovision of taxes offsetting an impairment). Without last year’s distortion, core-earnings actually gained 75%y-y. Orderbooks are at a record high (current orders backlog is S$445m vs S$288m last year) while the addition of 60k sqm of industrial portfolio space in the pipeline brings total space to over 163k sqm, which puts Boustead a step closer to eventually list a REIT. In addition, it is currently in a JV to development 120k sqm of industrial land in the Iskandar region. We reiterate our BUY rating on the stock. MARKET OUTLOOK:
In today’s 11.15am webinar, Macro & Markets returns with our take on the broad strategic and tactical outlook. We also feature a review of the Banking sector post results. Clients can register for the 11.15am webinar today by clicking the link in the “Weekly Market Outlook Webinar” box at the top of this note, or, by going to www.poems.com.sg > Weekly Webinar Market Call by Phillip Research. SECTOR/STRATEGY REPORTS:
- Sector Reports : Commodities,18 Sep / Banking, 9 Sep / Telecommunications, 9 Sep / Offshore & Marine, 26 Aug - Country Strategy : S’pore, 20 Sep / China & HK 1 Nov / Thai, 6 Nov - Macro Trader : 9 Sep, Update Source: Phillip Securities Research Pte Ltd
Chinese exports expanded in a faster pace at 5.6 percent on-year to US$185.4 billion in October, reversing the 0.3 percent fall in September, and adding to recent signs the country’s economy is picking up, said the General Administration of Customs. Meanwhile, imports increased 7.6 percent to US$154.3 billion, leading to a wider trade surplus of US$ 31.1 billion as compared to previous month’s US$15.2 billion. October’s annual inflation edged higher to an eight-month high of 3.2 percent in October, pushed up by higher food prices, according to the National Bureau of Statistics (NBS). Inflation accelerated slightly from 3.1 percent in September, thus amounting a 2.6 percent inflation rate for the first 10 months of the year through October – well below the government’s full-year target of 3.5 percent. Producer prices fell 1.5 percent in October from a year ago, marking the 20th consecutive month of decline. Industrial output rose 10.3 percent in October from a year earlier, while retail sales were up 13.3 percent. Fixed-asset investment, a key driver of economic activity, climbed 20.1 percent in the first 10 months from a year earlier. Malaysia:
Exports rose 5.6 percent year-on-year in September, boosted by Southeast Asian demand for refined petroleum products and higher electronics shipments to China, according to data from Statistics Department. On the other hand, imports grew 2.8 percent from the same month a year ago, leaving the largest trade surplus since November 2012. Trade surplus improved to MYR8.67 billion from August’s MYR7.11 billion. Eurozone:
The cost of insuring against a French default fell to the lowest in more than three years, as investors ignored a sovereign-credit rating downgrade by Standard & Poor’s. Credit-default swaps on France fell for a sixth day, declining 1 basis point to about 51 basis points at 1:45 p.m. That would be the lowest closing price since April 20, 2010. The contracts have fallen from 219 basis points on Jan. 13, 2012 when France lost its top rating at S&P. Australia:
The central bank projected gross domestic product will rise by between 2 percent and 3 percent in the year to December 2014, compared with 2.5 percent to 3.5 percent forecast three months earlier. The outlook for inflation is “to remain consistent” with the 2 percent to 3 percent target, the RBA said. Source: Phillip Securities Research Pte Ltd
Morning Note 11 November 2013
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Source: Bloomberg
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Morning Note 11 November 2013
6 of 15
81.31 +0.00% 274.39 +0.45%
104.04 -1.75% 2.748 +0.00%
1,288.60 -0.15% 15,761.78 +1.08%
543.12 -0.93% Straits Times Index 3,177.25 -0.78%
22,744.39 -0.60% 14,086.80 -1.00%
Source: Bloomberg
Gold (US$/Oz) DJI
MSCI Asia x-Japan
Hang Seng Index Nikkei 225 Index
Dollar Index ThomReuters/JefferiesCRB
Crude oil, Brent (US$/bbl) US Treasury 10yr Yield
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Morning Note 11 November 2013
7 of 15
Company AnalystDate of Last
ReportRating
Target
Price (S$)
Current
Price
Performance since
Last Report
Potential Return
at Current Price
GOLDEN AGRI-RESOURCES LTD Nicholas Ong 5-Aug-13 Neutral 0.50 0.575 8.5% -13.0%
WILMAR INTERNATIONAL LTD Nicholas Ong 8-Nov-13 Accumulate 3.88 3.38 -2.0% 14.8%
COURTS ASIA LTD Ken Ang 14-Aug-13 Buy 1.03 0.78 -12.9% 32.9%
GENTING SINGAPORE PLC Ken Ang 5-Nov-13 Neutral 1.49 1.46 -3.0% 2.1%
DBS GROUP HOLDINGS LTD Ken Ang 2-Nov-13 Accumulate 17.50 16.88 1.2% 3.7%
OVERSEA-CHINESE BANKING CORP Ken Ang 2-Nov-13 Neutral 9.55 10.39 0.3% -8.1%
UNITED OVERSEAS BANK LTD Ken Ang 6-Nov-13 Accumulate 21.20 20.86 0.3% 1.6%
MONEYMAX FINANCIAL SERVICES LTD Colin Tan 28-Oct-13 Buy 0.48 0.36 -10.0% 33.3%
SINGAPORE EXCHANGE LTD Ken Ang 18-Oct-13 Buy 7.90 7.25 0.3% 9.0%
AMARA HOLDINGS LTD Lucas Tan 15-Aug-13 Buy 0.74 0.56 -1.8% 32.1%
HO BEE LAND LTD Lucas Tan 14-Aug-13 Accumulate 2.45 2.06 -4.2% 18.9%
OUE LTD Lucas Tan 11-Nov-13 Accumulate 2.82 2.36 0.0% 19.5%
GLOBAL LOGISTIC PROPERTIES L Phillip Research Team 15-Aug-13 Neutral 2.80 3.00 7.1% -6.7%
11/14/2013 Nonfarm Productivity 3Q P 1% 2.30% 11/18/2013 Non-oil Domestic Exports YoY Oct -- -1.20%
11/14/2013 Unit Labor Costs 3Q P 1.00% 0.00% 11/18/2013 Non-oil Domestic Exports SA MoM Oct -- 5.70%
11/14/2013 Trade Balance Sep -$39.0B -$38.8B 11/20/2013 Automobile COE Open Bid Cat A 20-Nov -- 7260900.00%
11/14/2013 Bloomberg Nov. United States 11/20/2013 Automobile COE Open Bid Cat B 20-Nov -- 8457800.00%
11/14/2013 Bloomberg Consumer Comfort 10-Nov -- -3790.00% 11/20/2013 Automobile COE Open Bid Cat E 20-Nov -- 8900100.00%
11/15/2013 Import Price Index MoM Oct -0.50% 0.20% 11/25/2013 CPI NSA MoM Oct -- 0.10%
11/15/2013 Empire Manufacturing Nov 500.00% 152.00% 11/25/2013 CPI YoY Oct -- 1.60%
11/15/2013 Import Price Index YoY Oct -- -1.00% 11/26/2013 Industrial Production SA MoM Oct -- 3.70%
11/15/2013 Industrial Production MoM Oct 0.10% 0.60% 11/26/2013 Industrial Production YoY Oct -- 9.30%
Source: BloombergSource: Bloomberg
US Singapore
Economic Announcement
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Important Information
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Contact Information (Singapore Research Team)
Management
Chan Wai Chee (CEO, Research - Special Opportunities)
+65 6531 1231 Research Operations Officer
Jermaine Tock +65 6531 1240 Joshua Tan (Head, Research - Equities & Asset Allocation)
+65 6531 1249
Macro | Asset Allocation | Equities Financials US Equities
Joshua Tan +65 6531 1249 Ken Ang +65 6531 1793 Wong Yong Kai +65 6531 1685 Telecoms Commodities | Offshore & Marine Real Estate
Colin Tan +65 6531 1221 Nicholas Ong +65 6531 5440 Lucas Tan +65 6531 1229 Market Analyst | Equities
Kenneth Koh +65 6531 1791
Contact Information (Regional Member Companies) SINGAPORE
Phillip Securities Pte Ltd Raffles City Tower
250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631
Website: www.poems.com.sg
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Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099