Friday, October 13, 2006

Stock Upgraded: UOB and OCBC target price raised to 19.1 and 8 respectively by UBS

UBS Investment Research says it has raised its target prices for United Overseas Bank (UOB) and Oversea-Chinese Banking Corp in the belief that that banks here will continue to improve their margins and surpass expectations of loan growth. The investment bank has raised its target price for UOB to 19.10 sgd per share from 17.60 sgd and for OCBC to 8.00 sgd per share from 7.85 sgd. "We think a sustained rebound in margins and upside surprises in loan growth are the catalysts for further re-rating. Already core return on equity is near the record and moving higher in an environment of more normalized interest rates and what appear to be the best loan opportunities in over a decade," UBS said in a note to clients. "The market seems to be underestimating loan growth, which we think could surprise on the upside as Singapore enters a new phase of secular growth. In particular, we expect construction and housing loans to be strong in this reflationary environment. We revise our 2007 loan growth assumption from 7 pct to 12 pct." DBS Group Holdings Ltd remains UBS's top pick among banks here because of its perceived leverage to both the loan growth and interest rate cycle, UBS said. Earlier, UBS said it had raised its target price for DBS to 25.00 sgd per share from 21.50 sgd. At 10.11 am, DBS was up 1.00 sgd at 21.20, UOB up 0.20 at 17.00 sgd and OCBC up 0.10 at 7.10.

Stock Upgraded: Ho Bee target price raised to 1.36 by DBS Vickers

DBS Vickers Securities says it has increased its 12-month price target for Ho Bee Investment Ltd to 1.36 sgd per share from 1. 16 sgd, while keeping its "buy" rating for the stock, because the firm is expected to benefit from the rising prices of luxury homes. "As luxury home prices continue to rise, we expect Ho Bee to be a prime beneficiary, as all of its unlaunched land bank is targeted at the high-end residential segment," DBS Vickers analyst Zy Sew Ho said in a note to clients. Ho Bee has bought one site in the vicinity of Orange Grove here for 153 mln sgd and another at nearby Fernhill Grove for 75 mln sgd which, DBS Vickers said, could be used to exploit demand in the high end of the residential market. The brokerage said Ho Bee had recently put on the market apartments in its The Coast condominium for 1,500-1,600 sgd per square foot and that it expected the take-up rate there to allow the firm to raise prices further. DBS Vickers has also raised its assumption of the price that space in Ho Bee's Suntec Tower will command to 1,500 sgd per square foot from 1,050 sgd, in view of rising rents for offices. At 11.25 am, Ho Bee was up 0.06 sgd or 5.22 pct at 1.21, on volume of 4. 92 mln shares.

Stock Upgraded: K-REIT Asia target price raise to 2.45 by DBS Vickers

DBS Vickers Securities says it has raised its 12-month price target for K-REIT Asia to 2.45 sgd per share from 1.48 sgd because it has increased its assumptions of growth in rents for the real estate investment trust (REIT). The brokerage believes K-REIT is undervalued. "Our revaluation of the assets revealed [a] potential revaluation surplus of 147.4 mln sgd, which will raise [its] revised net asset value to 2.42 sgd from 1.82 sgd, the level at which the assets were injected into the REIT," DBS Vickers said in a note to clients. It has revised upwards its estimates of K-REIT's distribution per unit (DPU). "Our forward DPU forecast of 0.083 sgd for 2008 translates into distribution yield of 4.5 pct, in line with initial office asset yields," DBS Vickers said. "Yield spreads are also becoming attractive, with [the] 10-year government bond yield receding by 40 basis points in the last three months, and strong organic growth expected with positive rental reversions," it said. At 12.11 pm, K-REIT was up 0.17 sgd or 9.19 pct at 2.02, with 676,000 shares traded.

Stock Upgraded: SPH target price raised to 4.75 by Credit Suisse

Credit Suisse said it raised its target price for Singapore Press Holdings (SPH) to 4.75 sgd from 4.70 to reflect the higher valuations of the company's assets. It also raised its net profit forecast for the company by 1.4 pct to 405 mln sgd for the year to August 2007, and by 19.3 pct to 493 mln for the following year, to factor in earnings contributions from SPH's residential property development along Thomson Road. The residential development is scheduled to be launched in early 2007. However, the brokerage said it is keeping its "neutral" rating on the stock, gaying SPH lacks catalysts despite trading at an undemanding valuation. "Fundamentally, we do not see a rebound in the core media business in the near term," Credit Suisse said in a note. SPH ended the morning flat at 4.18 sgd on volume of 5.28 mln shares.

Stock News: KS Energy may gain on China contract

KS Energy Services Ltd may gain after it said its joint venture company with an unidentified partner, has won an 8.1 mln usd contract to charter a skid mounted land drilling rig to a China national oil company for an initial three-year fixed term with an optional one-year extension. Under the joint venture agreement, 70 pct of the profits will go to KS Energy.Yesterday, its shares closed down 0.03 sgd at 2.62.

Stock News: Nera Telecom may advance on new orders

Nera Telecommunications Ltd may rise after it said it has won orders worth 16.4 mln sgd from a global telecom operator for the supply and maintenance of Internet protocol network equipment. Yesterday, Nera Telecom shares closed up 0.005 sgd at 0.45.

Stock News: Keppel Corp may rise; wins 210 mln sgd in new contracts

Keppel Corp Ltd may edge higher after it said its unit Keppel Offshore & Marine Ltd won several contracts worth 210 mln sgd. The contracts include the conversion of two floating production storage and offloading facilities, and construction of five anchor handling and tug supply vessels, it said. Yesterday, Keppel Corp closed flat at 14.60 sgd.

Thursday, October 12, 2006

Stock News: Bio-Treat restates 2006 revenue due to accounting error

Bio-Treat technology Ltd said because of an accounting error there are "material differences in the revenue and cost of sales items in its unaudited year to June 2006 financial statement and those in its audited financial report for the year, and it is restating the figures. The revenue and cost of sales items in the audited financial statement were stated as 1.56 bln yuan and 1.03 bln yuan respectively, higher than the 1.46 bln yuan and 934.3 mln yuan stated in the unaudited statement, Bio-Treat said. The correct figures were those contained in the audited statement, it said. The company said these differences arose because of a classification error. The error was discovered after the unaudited financial statements were released in August. "The company wishes to assure shareholders that this error in classification is a one-off event," Bio-Treat said in a statement."The group has tightened its accounts department internal control procedures to prevent such incidents from recurring in the future," it added.

Stock News: Singapore Shipping divests two units for 16.42 mln usd; mulls special div

Singapore Shipping Corp Ltd (SSC) said that it will divest interests in two units for a total of 16.42 mln usd with plans to partly use the proceeds to invest in new vessels. Payment of a special dividend may also be considered, it said. The company said that it will book 5.5 mln sgd in exceptional gains from the divestment. The sale to Wallenius Marine AB and Wallenius Lines AB includes SSC's 50 pct stake in Wallenius Ship Management Pte Ltd and its interests in OW Shipping Co Pte Ltd. SSC currently owns 40 pct of the ordinary shares of OW Shipping and 50 pct of its redeemable preference shares.

Stock News: China Kangda signs MOU to supply onion rings products

China Kangda Food Co Ltd said it has signed a memorandum of understanding with US-based food distributor Best Food Services Inc to supply onion rings products. China Kangda will invest about 14 mln yuan in building an onion rings production facility and buying production equipment. The facility is expected to begin production in December and produce 3,000 tons of onion rings per year. The company will use its initial public offering proceeds to fund the capital investment, the firms said in a media release.

Stock News: CapitaLand to raise 320 mln sgd from China REIT listing

CapitaLand, Southeast Asia's largest property developer, is hoping to raise 320 mln sgd in a China-based real estate investment trust (REIT) listing before the end of this year, the South China Morning Post reported, citing market sources. The Singapore company will package six or seven commercial properties in China with a net asset value of about 800 mln sgd, the Hong Kong newspaper said. In Tianjin, the company owns the Exchange, which has a net rentable area of 376,600 square feet, and the Huiteng Metropolis in Xiamen, at 698,250 sq ft.

Stock News: Wing Tai may be active after buying site for 201 mln sgd

Property developer Wing Tai Holdings Ltd may be active after it said its unit Winrose Investment Pte Ltd, has signed a deal to acquire a freehold site known as Ardmore Point for 201 mln sgd. The site, which is a 60,534 square feet property located at Ardmore Park, is intended for residential development. Yesterday, Wing Tai closed up 0.03 sgd at 1.95.

Stock News: Asia Environment may gain on new contract

China-based waste water treatment company Asia Environment Holdings Ltd may rise after it said it has won its first build-own-operate project in Harbin City, China worth 190 mln yuan. Under the concession agreement signed with the Harbin City government, Asia Environment will build a water supply plant and a wastewater treatment facility at the Binxi Economic Development Zone. Yesterday, its shares closed up 0.02 sgd at 0.355.

Wednesday, October 11, 2006

Stock News: Wing Tai pays 11 mln sgd to up Suzhou Property Devt stake to 55 %

Wing Tai Holdings Ltd said it has raised its stake in Suzhou Property Development Pte Ltd (SPD) from 35 pct to 55 pct by buying 200,000 ordinary SPD shares for 11.1 mln sgd.

Stock News: Eastern Holdings buys two properties for 7.29 mln sgd

Eastern Holdings Ltd said its wholly owned unit Monterey Pte Ltd has exercised options to buy two properties in Amoy Street from American Home Assurance Company for 7.29 mln sgd. The company purchased the properties for investment purposes, Eastern Holdings said in a statement. Separately, Eastern Holdings also announced that its units' Monterey Pte Ltd and Eastern Development Pte Ltd have entered into options to sell three properties -- two at Coronation Drive and one at Amoy Street -- for 19.63 mln sgd. The sales are expected to have a positive impact on the group's results for the year ending March 2007.

Stock News: Global Voice wins contracts worth over 2.8 mln eur

Global Voice Group Ltd, which operates a fiber optic network in European countries, said it has won a number of deals worth more than 2.8 mln eur, spanning an average length of three years that will significantly boost the company's earnings. The contracts include one with True, one of the Netherlands's largest Internet service providers, for the rental of approximately 700 square meters of secure datacenter space, with option to extend to an adjacent datacenter suite. Another is a contract with a private fiber network for Xentech BV, one of the Netherlands' leading system integrators, with mission-critical connectivity via a private fiber network from Global Voice. Global Voice also won a deal to deliver Tier I Internet connectivity for European company Dooyoo. "These contracts represent a small sample of recent customer wins which are key in their contribution to recurring revenue, profitability and also in their credentials as customers of Global Voice," CEO Noel Meaney said in a statement.

Tuesday, October 10, 2006

Stock Outperform Call: Cheung Woh Tech target price raised to 0.22

CIMB-GK Research has raised its rating for Cheung Woh Technologies Ltd, a maker of hard disk drive (HDD) components, to "outperform" from "neutral" and increased its target price to 0.22 sgd per share as it believes the company has turned the corner and that its business looks set to recover. Cheung Woh will release its first half to August results on Friday. While CIMB-GK expects earnings for the period to remain weak, it sees Cheung Woh's business recovering in the second half to February 2007. "We believe margins for the HDD components business would still be under pressure in the first half of fiscal 2007 in view of the decline in volume for both VCM plates and disk clamps," CIMB-GK said in a note. "However, this trend should reverse in the second half of FY 2007, as we understand that all old inventories have been fully utilised in mid-August. Together with an anticipated improvement in volume for VCM plates and the sourcing of raw materials in-house, we expect margins to expand by 2.6 pct points in the second half of FY 2007, compared to the first," it added. At 2.53 pm, Cheung Woh was up 0.015 sgd or 8.57 pct at 0.19 with 97,000 shares traded.

Stock Upgraded: Ezra Holding target price raise to 5.14 by Kim Eng!

Kim Eng Securities said it has raised its target price for Ezra Holdings to 5.14 sgd from 4.05 after the company won its first floating production storage and offloading charter contract worth up to 397. 25 mln usd. Kim Eng said this is Ezra's largest and most significant contract to date and marks its first entry into the FPSO market. With this deal, Ezra becomes the first Singapore company to operate an FPSO, widening the range of services it provides to clients and propelling it onto a global stage, it said. "To be sure, this is a very positive development for Ezra; we expect the contracts to lift earnings significantly in the medium term," the brokerage said in a note. "We expect yearly contributions to the tune of 25 mln sgd from the year to August 2008," it added. The brokerage is keeping its "buy" call on the stock, given its current attractive valuation. At 3.04 pm, Ezra was up 0.26 sgd or 7.69 pct at 3.64 on volume of 1.28 mln shares.

Stock Upgraded: Ezra Holding target price raise to 4.25 by JP Morgan

JP Morgan has increased its price target for Ezra Holdings Ltd to 4.25 sgd from 3.00 and stood by its "overweight" call on the stock in view of the firm's robust growth strategy. "Ezra has recorded recent high yielding wins of long-term charter contracts and set up appropriate financing structures to fund its growth," JP Morgan said in a client note. "We believe long-term charter contracts and the company's aggressive fleet expansion plans (fueled by sale and lease back arrangements) would lend firm support to our valuations," it added. Yesterday, Ezra announced it won a contract worth a maximum 397.25 mln usd for the long-term charter of a floating production storage and offloading (FPSO) facility for operation in Southeast Asia and expects to secure another FPSO charter contract in the next 12 months. JP Morgan said Ezra will likely earn net profit of around 50 mln sgd annually during the four-year contract period for its latest FPSO order. The research house has increased its net profit estimates for Ezra to 74. 4 mln sgd from 59.7 mln for the year to August 2007, and to 103.8 mln from 72. 5 mln for the following fiscal year. At 9.27 am, Ezra was up 0.14 sgd or 4.14 pct at 3.52 with 370,000 shares traded.

Stock Upgraded: F&N price target raised to 5 by ML

Merrill Lynch has raised its target price for Fraser & Neave Ltd (F&N) to 5.00 sgd from 4.38 as it expects the firm's property business to benefit from the recovering domestic market. "We believe Fraser & Neave is well positioned to leverage off the strong recovery in the Singapore property market over the next three to four years," Merrill Lynch said in a note. F&N has launched seven property developments this year and Merrill Lynch believes the company will launch at least three in 2007 and another two in 2008. "The strong launch program underway should result in (its) Singapore residential property EBIT (earnings before interest and tax) increasing from 91 mln sgd in 2005 to 295 mln in 2008," it said. Merrill Lynch said it has revalued F&N's listed investments, which include Asia Pacific Breweries and Frasers Centrepoint Trust, estimated to be worth 2.7 bln sgd and accounting for 31 pct of the group's total assets. Merrill Lynch advises a "buy" on F&N shares and believes the company is well positioned to leverage off the economic growth in Singapore and across Asia. At 9.53 am, F&N was up 0.02 sgd or 0.47 pct at 4.32 with 577,000 shares traded.

Stock Upgraded: Ezra Holdings price target to 4.1 by DBS Vickers

DBS Vickers Securities said it has raised its target price for Ezra Holdings Ltd to 4.10 sgd from 3.30 given the company's stronger earnings prospects after it won a new long-term charter deal and following its entry into the Indian offshore market. DBS said it welcomes Ezra's long-term charter of a floating production storage and offloading facility (FPSO) worth up to 397.25 mln usd and its foray into the Indian market. "The FPSO contract can lift earnings strongly in the medium term," DBS Vickers analyst Jesvindher Sandhu said in a note. She said the FPSO cost outlay is estimated at 180-200 mln usd. "Assuming that Ezra has a 100 pct stake in the FPSO, we conservatively estimate that the FPSO can contribute around 14.2 mln usd per annum, on revenue of 65.3 mln usd, for the first four years," she said. DBS Vickers estimates Ezra will report a net profit of 53.7 mln sgd for the year to August 2006, and forecasts this will rise to 55.5 mln and 89.2 mln in the years to August 2007 and 2008, respectively. It sees further upside to Ezra's year to August 2008 earnings numbers once the company finalizes its financing options for the FPSO. At 10.16 am, Ezra was up 0.12 sgd or 3.55 pct at 3.50 on volume of 501, 000 shares.

Stock News: UOL Group unit to sell Central Plaza for 175 mln sgd

UOL Group Ltd said its unit UOL Tion Bahru Plaza Pte Ltd will sell the 20-storey office block, Central Plaza, to Bakersfield Pte Ltd for 175 mln sgd. The transaction is expected to be completed within three months from today. UOL said it expects to reap a gain of 79 mln sgd or 9.97 cents per share from the sale, which will be reflected in next year's financial results. "The transaction will enable the company and its subsidiaries to reduce its borrowings and position itself to take advantage of investment opportunities as and when they arise," it said in a statement.

Stock News: Dayen may gain on new contract

Water recycling firm Dayen Environmental Ltd may advance after it said it won a 10.2 mln usd contract from Cambodia's water supply utility, Phnom Penh Water Supply Authority. Yesterday, Dayen closed down 0.015 sgd at 0.56.

Stock News: Keppel Land sells stake in Shanghai office tower for 45.8 mln sgd

Keppel Land Ltd said it has agreed to sell its 30 pct stake in Sing-Mas Investments Pte Ltd to Ascendas Land International Pte Ltd for 45.8 mln sgd. Sing-Mas is a joint venture between Keppel Land, Sing Holdings Ltd and Hong Lim Investments Pte Ltd, and owns 97.6 pct of Ocean Towers in Shanghai through a China subsidiary. The other two shareholders will also be selling their stakes in Sing-Mas to Ascendas. When the sale is completed, Keppel Land said it will book a net profit of about 27.5 mln sgd.

Monday, October 09, 2006

Stock Downgraded: Genting price target reduced to 0.42 by ML

Merrill Lynch said it has cut its target price for Genting International PLC to 0.42 sgd from 0.43 to factor in the reduction in its estimated net asset value (NAV) to 0.27 sgd from 0.28 per share. The brokerage said it reduced its NAV estimate for the stock due to the change in the mark-to-market valuation of Genting's 29.8 pct holding in London Clubs, after London Clubs' share price fell from 1.36 stg to 1.28 last week on concerns that the planned takeover by Harrah's Entertainment announced in September might not proceed. However, Merrill Lynch said it is keeping its "buy" call on the stock on the view that Genting International could win the bid to build the proposed Sentosa integrated resort. "Our top pick remains Genting International, which we believe will not only submit the most comprehensive bid but will likely commit the largest financial investment of more than 2.5 bln usd," the brokerage said in a note. At 9.19 am, Genting International was up 0.02 sgd or 5.48 pct at 0.385 on volume of 7.12 mln shares.

Stock Upgraded: DBS Grp target price raise to 23.1 by JP Morgan

J P Morgan says it has raised its target price for DBS Group Holdings Ltd to 23.10 sgd from 19.80 sgd because it expects the bank's earnings over the next three years to be slightly higher than it previously thought. "We are increasing our target price for DBS stock by 17 pct," J P Morgan said in a note, "as we increase our earnings estimates by 2-4 pct for 2006-2008, and [our] normalized return of equity assumption to 12.5 pct from 12.3 pct." J P Morgan now forecasts that DBS will make 2.22 bln sgd in net profit this year, 2.27 bln sgd next year and 2.42 bln sgd in 2008. The brokerage is keeping its "overweight" rating for DBS. "Domestic-reflation-led growth, with lower exposure to exporters, coupled with margin resilience makes for a good defensive play," J P Morgan said. It said DBS was its top pick among banks here. "We believe the stock is set to outperform on both [an] absolute and [a] relative basis, as it continues the run, after underperforming [the] Singapore finance index since 2001," the brokerage said. At 10.16 am, DBS was down 0.20 sgd or 0.99 pct at 20.00, on volume of 872, 000 shares.

Stock Upgraded: Genting with target price raise to 0.45 by CIMB-GK

CIMB-GK Research says it has raised its target price for Genting International to 0.45 sgd from 0.43 sgd to factor-in the higher prices of Stanley Leisure and London Clubs. CIMB-GK is keeping its "outperform" rating for the stock, in view of the good chance that the company and its partner have of winning the bidding to build a casino resort on Sentosa island here. "We reiterate our belief that Genting International stands the best chance of success, with its impressive Universal Studios proposal and gaming know-how," CIMB-GK said in a note. "Winning the Sentosa bid would propel (its) target price to 0.51 sgd," it said. At 10.57 am, Genting International was up 0.015 sgd or 4.11 pct at 0.38, on hefty volume of 22.14 mln shares.

Stock Upgraded: ST Engg target price rise to 3.4 by OCBC Investment Research

OCBC Investment Research says it has raised its target price for ST Engineering Ltd to 3.40 sgd from 3.20 sgd. OCBC has a "buy" rating for the stock. "Putting the first half behind us, we are confident that ST Engineering will produce a strong second half, coupled with positive earnings momentum going into 2007," OCBC analyst Kelly Chia said in a note. "Although [its] share price has risen almost 8 pct since Sept 22, ST Engineering's attractive dividend pay-out ratio and long-term earnings visibility puts the share price in a favorable position for [a] further run-up," Chia said. OCBC said that the industrial conglomerate's improving operational efficiency, with the string of acquisitions it has made (the most recent being 80 pct of of MAK Technologies Inc) and its exciting opportunities would would allow for good earnings momentum across all business segments in future. At 11.03 am, ST Engineering was 0.05 sgd or 1.68 pct lower at 2.93, on volume of 578,000 shares.

Stock News: Datacraft firmer on re-rating hopes as earnings rise

Computer network systems integrator Datacraft Asia Ltd edged higher, bucking the decline in the broad market, after Citigroup said it believes the stock should be re-rated amid strong signs earnings are recovering. "Datacraft is a fundamental turnaround story, and we believe the stock deserves to be re-rated, particularly in view of its earnings quality - evident from the sharp decline in receivables days and gross margin improvement over the past few years," Citigroup said in a note to clients. The outlook for Datacraft's operations in China is also upbeat. "As China's banking industry liberalizes, foreign banks are investing in infrastructure as part of their plans to scale up. We believe Datacraft is well positioned to benefit since it already has an established relationship with several foreign banks in Asia," Citigroup said. Citigroup rates Datacraft a "buy" with a target price of 1.38 usd. In August, Datacraft reported that its net profit in the three months to June rose 85 pct year-on-year to 5.33 mln usd, backed by better margins and lower taxes, and said it was optimistic on the outlook for the September quarter. Datacraft is a unit of UK-listed South African IT services company Dimension Data Holdings PLC. Datacraft was up 0.005 sgd at 0.995, off a high of 1.01, with 1.53 mln shares traded.

Stock News: Man Wah secures orders worth 11 mln usd

Hong Kong-based sofa maker Man Wah Holdings Ltd said it has secured orders worth 11 mln usd, or about 85.8 mln hkd, following its participation in trade fairs in the US and China. It said the orders are equivalent to 16 pct of the group's year to March 2006 sales of 536 mln hkd.

Stock News: Darco Water wins 13 projects worth 12.85 mln sgd

Darco Water Technologies Ltd said it has secured 13 new projects worth 12.85 mln sgd, the largest of which is a 4.4 mln sgd wastewater treatment contract for Showa Kankyo System's hard disk drive manufacturing facility in Singapore. The other 12 contracts are smaller, environmental engineering-related deals, it said.

Stock News: Singapore Petroleum to abandon exploration well in Indonesia

Singapore Petroleum Co Ltd (SPC) said it will abandon exploration activities at the Wortel-2 appraisal well, part of the Sampang production sharing contract in Indonesia, after the drill stem test did not recover significant hydrocarbons. SPC holds a 36 pct stake in the oil discovery contract, which it is jointly exploring with partners Santos Ltd, Cue Energy and PT Petrogras. "There are plans for further appraisal drilling, including a third well, Wortel-3 appraisal well, to determine the full potential of the Wortel gas discovery, subject to partners' and governmental approval and rig availability," the company said in a statement.

Stock News: GP Batteries to raise about 131 mln sgd from loan syndication

GP Batteries International Ltd said it will raise about 131 mln sgd from a loan syndication, partly to finance existing debts. It said it has signed a three-year syndicated term loan facility agreement with international banks to raise 60 mln sgd and 45 mln usd. The amounts are higher that the original planned sizes of 55 mln sgd and 30 mln usd, respectively, due to oversubscription. BNP Paribas and DBS Bank Ltd were mandated as the lead arrangers for the borrowings. It said that nine other international banks participated in the syndication.

Stock News: United Food sells plant for 18.54 mln yuan

China-based meat supplier United Food Holdings Ltd said it has sold a slaughtering plant in Jianping, Liaoning Province, China for 18.54 mln yuan. The company said proceeds from the sale of the plant, left idle since slaughtering activity was suspended at the end of 2004, will be used to provide additional working capital.

Stock Upgraded: AusGroup price target rise to 0.71 by UOB Kay Hian!

AusGroup Ltd may gain after UOB Kay Hian Securities lifted its 12-month target price for shares of the engineering services provider for the oil and gas industry to 0.71 sgd from 0.55, saying its acquisition of Cactus Engineering & Trade Pte Ltd is expected to boost the group's earnings from the current financial year and onwards. The brokerage reiterated its "buy" recommendation for the stock. AusGroup rose 0.045 sgd or 12.5 pct to close at 0.405 on volume of 28.57 mln shares on Friday

Saturday, October 07, 2006

Stock Buy Call: Ho Bee with price target of 1.3 by Westcomb

Westcomb Financial Group said it has initiated coverage on property developer Ho Bee Investment Ltd with a "buy" rating and a target price of 1.30 sgd per share. In a note to clients, Westcomb said Ho Bee's prospects were bright given its reputation as a luxury home developer on Sentosa, which will help facilitate sales of its future launches in the high-end and mid-tier residential segments. "We are of the view that there is further capital upside, of about 10 pct to 15 pct, in the high-end and mid-tier home markets over the next 12 months, " it said. Westcomb also said Ho Bee, currently the largest luxury home developer at Sentosa Cove, is a recommended play because it believes land surrounding the Sentosa integrated resort will appreciate in value, regardless of who wins the bid for the project. "With land acquisition plans in the pipeline that will further enhance RNAV (revised net asset value), and as the beneficiary of higher land values, regardless of the winning bidder for the Sentosa resort project, we are expecting a re-rating of Ho Bee shares," it said. Westcomb expects Ho Bee's net profit growing to 73.73 mln sgd this year from 38.07 mln last year, further rising to 154.02 mln next year. Ho Bee ended the morning up 0.03 sgd at 2.97 pct at 1.04 with 5.60 mln shares traded.

Stock News: SembCorp Industries higher on UBS's call

SembCorp Industries was higher after UBS Investment Research described the stock as its top pick among conglomerates here because the company's earnings are backed by its marine division's big order book, dealers said. In early afternoon trading, SembCorp Industries was up 0.04 sgd or 1.2 pct at 3.38, on volume of 917,000 shares. Unit SembCorp Marine Ltd was unchanged at 3.44, with 884,000 shares traded. "We like SembCorp Industries, for which earnings are backed by a 7 bln-sgd order book at SembCorp Marine and by utilities (about 50 pct of earnings), offering a mix of mature assets with steady cash flows and growth assets in strategic locations," UBS said its October Singapore Analyser report. UBS rates SembCorp Industries "buy 1", with a target price of 4.02 sgd. UBS rates SembCorp Marine "buy 2", also with a target price of 4.02 sgd.

Stock Buy Call: AusGroup with price target of 0.71 by UOB Kay Hian

UOB Kay Hian said it has raised its 12-month target price for AusGroup Ltd, an engineering services provider for the oil and gas industry, to 0.71 sgd from 0.55 as its acquisition of Cactus Engineering & Trade Pte Ltd is expected to boost the group's earnings from the current financial year and onwards. Cactus is a Singapore-based company that specialises in manufacturing subsea well-head control equipment. "We expect Cactus to boost AusGroup's years to June 2007, 2008 and 2009 earnings by 50 pct, 72 pct and 91 pct respectively," it said. UOB Kay Hian raised its year to June 2007 net profit estimate for AusGroup to 19.9 mln aud, and sees the company's bottom line further improving to 26.2 mln the following year. The brokerage reiterated its "buy" recommendation for AusGroup, noting that the stock is trading at 5.8 times its year to June 2007 price to earnings ratio, and at 2 times price to book value, below the company's three-year compounded annual growth rate of 22 pct. At 3.43 pm, AusGroup was up 0.005 sgd or 1.39 pct at 0.365 on volume of 5. 41 mln shares.

Stock Upgraded: Labroy Marine with price target of 2.5 by DBS Vickers

DBS Vickers Securities has raised its target price for Labroy Marine Ltd to 2.50 sgd from 2.40 as it expects stronger earnings after the company secured new contracts from Norway's Standard Drilling ASA. Labroy said Standard Drilling has exercised its option to order the third and fourth jack-up rig at a contract value of 153.5 mln usd each, which is a 5 pct premium to the first two job orders. "We expect margins for these two contracts to be higher given higher contract price and economies of scale as it overcomes the initial learning curve," DBS Vickers said in a note. Consequently, the brokerage increased its net profit forecasts for 2007 and 2008 by 15 pct to 119.2 mln sgd and 19 pct to 140.9 mln, respectively. It kept its 2006 forecast at 69.2 mln sgd. Labroy reported net profit of 54.6 mln sgd for 2005. "Potential catalyst for re-rating will come from new jack-up orders from offshore drilling operators," said DBS Vickers which has a "buy" call on the stock. At 9.34 am, Labroy was up 0.02 sgd or 1.07 pct at 1.89 on volume of 2.33 mln shares.

Stock Buy CAll: SPH price target at 4.78 by DBS Vickers

DBS Vickers Securities says it has raised its rating for Singapore Press Holdings (SPH) to "buy" from "hold" and increased its target price to 4.78 sgd from 4.42 because of its attractive valuation and the boost to the company's earnings expected from its development of the Times Industrial Building here. "The proposal to develop its Times development site should boost group earnings [in the years] to August 2007-2009, amid a rising mid- [to] high-end residential market," DBS Vickers said in a note. The brokerage has raised its estimate of net profit for the company for the year to next August by 16 pct to 440.8 mln sgd to factor-in earnings from this development, and for the year to August 2008 to 482.7 mln sgd. DBS Vickers also said it had raised its valuation for SPH's Paragon building to 1.65 bln sgd, or 1.05 sgd per share, because it expects rents for retail premises here to continue to rise. At 9.51 am, SPH was up 0.06 sgd or 1.46 pct at 4.18, on volume of 2.46 mln shares.

Stock Buy Call: China Sky with price target of 1.82 by ML

Merrill Lynch said it has initiated coverage of China Sky Chemical Fibre Co Ltd with a "buy" rating and a target price of 1.82 sgd given expectations of robust earnings going forward. "We project China Sky will grow third-quarter earnings by 50-60 pct year-on-year, and (we) see strong result delivery as a price catalyst in the near term," Merrill Lynch analyst Eddy Loh said in a note. He said China Sky, being the largest producer of nylon fiber in China, will benefit from the continued strong demand for the product in the mainland. "China Sky is well-positioned to outpace industry growth by grabbing market share from both foreign imports and domestic competition," Loh said. Merrill Lynch projects China Sky will post a net profit of 490 mln yuan this year compared to 321 mln in 2005, and sees the figure further rising to 634 mln yuan next year and to 744 mln in 2008. At 10.40 am, China Sky was up 0.05 sgd or 4.46 pct at 1.17 on volume of 19.80 mln shares.

Stock Outperform Call: Want Want with price target of 1.9 USD by CIMB-GK

CIMB-GK Research has upgraded its rating on Want Want Holdings Ltd to "outperform" from "neutral" and its target price to 1.90 usd from 1.45 on the back of better earnings projections for 2007 and 2008. "We kept our 2006 forecast intact and boosted 2007-2008 forecast by 12 pct and 11 pct to factor in the recovery of margins and higher sales assumptions," CIMB-GK said in a client note. "We see positive sales momentum in coming quarters outpacing cost pressures and also anticipate maiden contribution from its non-food and beverage segment in late 2007 arising from sales of property related projects, " it added. The brokerage expects Want Want's net profit to grow to 124.3 mln usd this year from 113.8 mln last year, and further to 159.9 mln next year, and to 182.7 mln in 2008. At 11.29 am, Want Want was up 0.08 usd or 4.94 pct at 1.70 on volume of 552,000 shares.

Friday, October 06, 2006

Stock News: BBR Holdings unit wins 32 mln usd deal in Sri Lanka

Construction firm BBR Holdings (S) Ltd said its unit Singapore Piling & Civil Engineering Pte Ltd has secured a 32 mln usd contract from Asia Hotels & Properties Ltd to build a 35-storey residential tower in Colombo, Sri Lanka. The construction of the residential tower called "The Emperor," which will have 38,450 square meters in gross floor area and consist of 172 units, will be completed in 38.5 months, it said. BBR Holdings said the deal is not expected to have any material financial impact on its consolidated net tangible assets per share and consolidated earnings per share this year.

Stock News: Kingsmen Creatives end-Sept confirmed contracts at 86 mln sgd

Kingsmen Creatives Ltd, an interior design company specializing in exhibitions and showrooms, said that it has about 86 mln sgd worth of confirmed contracts as of end-September. These include the i-Space Exhibition and Nanotechnology Exhibition worth about 10 mln sgd and over 7 mln sgd worth of interior projects at Vivo City. It said that the contracts will contribute positively to its financial performance this year.

Stock News: CapitaLand to issue up to 500 mln sgd worth of convertible bonds

Property developer CapitaLand Ltd said it will issue up to 500 mln sgd worth of bonds convertible into new ordinary shares, partly to repay debt. The issue will comprise a principal amount of 350 mln sgd with another 150 mln sgd available when an over-allottment option is exercised. Other uses for the net proceeds will be to finance new investments and for working capital CapitaLand said. It has tapped JP Morgan (SEA) Ltd as the sole bookrunner and lead manager of the issue, which will be priced on October 6 after a bookbuilding exercise. Further terms of the convertible bonds will be disclosed after pricing. The closing date of the issue is expected to be on or about Novemer 15.

Stock News: Hengxin Technology unit expands capacity

Hengxin Technology Ltd said its wholly owned unit in China, Jiangsu Hengxin Technology Co Ltd, has raised production capacity of its radio frequency coaxial cables for mobile communications to 36,000 kilometers annually from 33,000 kilometers. The upgrade cost 1.2 mln yuan in investments in machinery and installation, which was funded internally, the company said. "The increase in production capacity is expected to contribute positively to our group's earnings per share and net tangible asset for the current financial year," Hengxin said in a statement.

Thursday, October 05, 2006

Stock Upgraded: Keppel Land target price raised to 5.33 by Credit Suisse

Credit Suisse said it has lifted its target price for Keppel Land to 5.85 sgd per share from 5.33 previously as it sees the property developer as "the best proxy" to the rising Singapore office market. "Its net asset value is the most sensitive to office rents -- triple that of City Developments. Given its dominance over the newer financial district, its properties are likely to benefit from premium rents, we believe," Credit Suisse said. Keppel Land and its partners Cheung Kong Holdings and Hong Kong Land Holdings built Singapore's most modern building, One Raffles Quay, and the same group is developing the new Business and Finance Centre. "It is (also) a play into the mid to high-end Singapore residential segment where we see most upside. We believe downside risks are limited for its China residential exposure, given that its projects are targeted at local and the middle- to upper-middle market segment where genuine demand remains healthy," Credit Suisse said. "Keppel Land valuations at current levels remain attractive and we recommend a switch from City Developments to Keppel Land. We rate City Developments 'neutral' with an 11.20 sgd target price," it added. At 9.03 am, Keppel Land was up 0.05 sgd at 5.05 with 196,000 shares traded, while City Developments was up 0.20 at 10.20 with 152,000 shares traded.

Stock News: Food Empire unit loses trademark battle vs McDonald's

Food Empire Holding Ltd's unit Future Enterprises has lost its battle with McDonald's Corp after the High Court dismissed its petition to allow its MacCoffee brand to be registered in Singapore as a trademark, the Business Times reported, citing court documents. The dispute over MacCoffee arose when McDonald's objected to Future Enterprises' attempt to update the brand's mark, saying it was too similar to its McCafe. The newspaper reported that Future Enterprises has lodged an appeal against the High Court's decision and the case will heard by the court of appeal in February next year. The court's verdict will only affect the company's use of the MacCoffee trademark in Singapore, according to the report.

Stock Upgraded: Cosco target price raise to 2.00 by JP Morgan

JP Morgan has lifted its target price for Cosco Corp (Singapore) Ltd to 2.00 sgd from 1.53 previously as it sees strong potential for the company to secure more orders for offshore oil exploration platforms. "We believe Cosco is poised for double-digit growth as it is well equipped to emerge as a strong player in the global ship-repair and offshore industry. Cosco's inherent cost advantage and its steady climb up the offshore learning curve should sustain its competitive edge and extend its growth potential," JP Morgan said in a note clients. JP Morgan believes the market has not fully priced in the importance of Cosco's latest 120 mln usd drillship hull contract for the 620 mln usd floating, drilling, production, storage and offloading vessel of Norwegian MPF Corp, which it said "affirmed Cosco's engineering expertise and enhanced its credibility in the rigbuilding and conversion arena." At 9.33 am, Cosco was up 0.04 sgd or 2.31 pct at 1.77 with 2.04 mln shares traded

Stock News: Singapore Airlines may get 200-300 mln sgd compensation from Airbus

Morgan Stanley said Singapore Airlines (SIA) may receive compensation from Airbus in the region of 200-300 mln sgd, which would be equivalent to 0.14-0.21 sgd per share, as a result of further delays in the delivery of A380 jumbo jets to the airline. Following production delays at Airbus, SIA said delivery of its first A380 is now scheduled in the fourth quarter of 2007 instead of this year. "While the delay is a negative for Airbus and its parent company EADS, we view it as a positive for Asian airlines, and particularly SIA, for two reasons: potential compensation by Airbus; and tightened capacity and an improved yield environment," Morgan Stanley told clients. "With falling oil prices and potential compensation from Airbus, we think SIA's share price has upside (potential to rise) to about 17 sgd a share," it added. At 10.30 am, SIA was up 0.10 sgd or 0.68 pct at 14.90 with 616,000 shares traded.

Stock Upgraded: Innovalues target price raise to 1.52

CIMB-GK Research said it has lifted its target price for Innovalues to 1.52 sgd per share from 1.18 previously on expectations of strong earnings going forward, with the company's Malaysian manufacturing facility running at full capacity. "Our recent Malaysian plant visit reinforced our positive view on Innovalues. The Malaysian plants represent 65 pct of group capacity, focusing mainly on office automation (OA) and automotive components," CIMB-GK said in a note to clients. "All three plants are operating close to full capacity on the back of seasonal demand and new customers and programmes," it added, "The Thailand and China plants are also busy with automotive and OA businesses, respectively. The Thai plant is operating at about 80 pct of capacity due to a slowdown in the HDD (hard disk drive) components business. The China facility, which focuses on OA and automotive, is running close to full capacity," the brokerage said. CIMB-GK expects Innovalues' net profit to rise from 10.1 mln sgd last year to 14.2 mln this year, to 18.4 mln next year and to 24.3 mln in 2008. At 10.42 am, Innovalues was up 0.05 sgd or 6.17 pct at 0.86 with 1.80 mln shares traded.

Stock Upgraded: Singapore Land target price raise to 8.85 by DBS Vickers

DBS Vickers Securities said it has upgraded its call on Singapore Land to "buy" from "hold" and raised its 12-month target price to 8.85 sgd per share from 6.03 on the view that the office landlord will benefit from tight office space supply and rising rents. "We are seeing the highest office rental growth in a decade, and CBD (Central Business District) office occupancy is getting tighter at 2.7 pct (vacancy rates)," DBS said in a client note. "Singland is well positioned to ride on the strong fundamentals in the office sector, with positive rental reversions over the next few years," it added. The brokerage also upgraded its revised net asset value estimates for the firm to 7.69 sgd per share from 6.03 sgd previously, due to a revaluation of Singapore Land's investment property portfolio and the upward adjustment of development profits and revaluation of its hotel portfolio. At 10.57 am, Singapore Land was up 0.35 sgd or 4.38 pct at 8.35 with 331, 000 shares traded.

Stock News: Creative higher on hopes new product will boost sales

Creative Technology was higher on hopes that the company's new product, XMod, will boost its sales, dealers said. In mid-morning trading, Creative Technology was up 0.20 sgd or 1.91 pct at 10.70, with 262,000 shares having changed hands. XMod is an interface that promises to help improve the sound output of personal computers and MP3 players. "As the Xmod is a new device, it is hard to gauge the initial impact, as users will probably need to be educated first. However, given its ease of use, and relatively affordable price of 85 usd, the XMod may throw up an interesting surprise for Creative this year, " Credit Suisse said in a note to clients. Credit Suisse expects Creative to make a net profit of 19.5 mln usd in the year to next June, the company having made a net loss of 118.2 mln usd in the year to last June, and that its net profit will rise to 39 mln usd in the year to June 2008 and to 49.4 mln usd in the year to June 2009. Credit Suisse has an "outperform" rating for Creative Technology, with a target price of 12.90 sgd per share.

Stock News: Labroy Marine confirms 307 mln usd deal to build two rigs

Labroy Marine Ltd said it will build two additional jack-up rigs worth 307 mln usd for Norway's Standard Drilling ASA, confirming an earlier story by XFN-Asia. The company said the rigs are scheduled to be delivered in 2009. In March, Labroy secured orders from Standard Drilling for two rigs together worth 475 mln sgd. Including the latest contract, the firm said its total order book for 2006 onwards now stands at 1.84 bln sgd. rading in shares of Labroy was suspended earlier today ahead of the announcement and the company said it has requested for the trading halt to be lifted. Before it was suspended, Labroy was up 0.04 sgd or 2.11 pct at 1.94 on volume of 5.57 mln shares.

Stock News: ComfortDelgro unit to run buses in Australia's Hunter Valley

Hunter Valley Buses Pty Ltd, a unit of land transport operator ComfortDelgro Corp Ltd, has signed a seven-year contract with the Australian Ministry of Transport to provide bus services in the Hunter Valley region of New South Wales, ComfortDelgro said. It said that the deal was worth about 17.6 mln aud annually. Hunter Valley Buses will be paid a contractual amount for the services while the transport ministry will take the fare revenue. ComfortDelgro said that the contract is not expected to have any material impact on its net tangible assets per share and earnings per share this year.

Stock NewS: Asiatravel total room nights jumped 42 pct in year to September

Online travel service provider Holdings Ltd said its total online room nights jumped 42 pct year-on-year in its financial year ended September. In its fourth quarter, total online room nights grew by 45 pct from a year ago. On average, total online monthly room nights increased by 55 pct in July, 52 pct in August and 29 pct in September. "The growth in September was partly impacted by the slow arrival of leisure and business travelers into Singapore during the IMF/World Bank meeting and the military coup in Thailand," Asiatravel said in a statement.

Stock News: Vantage sells 3 mln shrs in Thailand's Jack Chia for 69.6 mln baht

Vantage Corp Ltd said it has sold 3.0 mln issued and ordinary shares in Jack Chia Industries (Thailand) Public Co Ltd (JCIT) for 69.6 mln baht ,or 2.9 mln sgd, in cash in the open market. This represents about 22.54 pct of the issued and paid-up share capital of JCIT as of December 31 last year. "The shares were held for investment purposes and the disposal is in line with the company's investment strategy," Vantage said in a statement. Based on the book value of the shares of about 3.5 mln sgd for the financial year ended March, the loss of disposal and loss of sale proceeds of the shares over its book value is about 0.6 mln sgd, Vantage said.

Stock News: ST Engineering may gain after buying 80 pct of MAK Tech

ST Engineering Ltd may gain after it said its unit Vision Technologies Kinetics Inc will acquire 80 pct of US-based MAK Technologies for 20 mln usd. MAK is engaged in simulation of sofware to link, simulate and visualize virtual worlds in a networked synthetic environment. "MAK Technologies will augment ST Electronics' simulation capabilities," ST Electronic president Seah Moon Ming said in a statement. Yesterday, ST Engineering closed up 0.03 sgd at 2.92.

Wednesday, October 04, 2006

Stock News: Boustead Singapore higher after winning contracts worth 35 mln

Boustead Singapore was higher in midmorning trade after winning two contracts worth 35 mln sgd, dealers said. The contracts involve the design and construction of key process equipment for a large refinery in North America and an LNG processing facility in North Africa, and aAbout 25 pct of the value of these contracts are expected to be recognized in the current year to March 2007. DBS Vickers said it is keeping its "buy" rating on Boustead, with a target price of 1.67 sgd per share. "Overall, the demand for process equipment remains strong, underpinned by the global expenditure in the oil and gas sector. As such, we believe that Boustead stands to benefit from its established brand names in the downstream refinery market," it added. Boustead was up 0.04 sgd or 2.90 pct at 1.42 with 156,000 shares traded.

Stock Upgraded: UOL target price raised to 3.94 by CIMB-GK!

CIMB-GK Research has raised its target price for UOL Group Ltd by 5 pct to 3.94 sgd per share after its 78 pct-owned Hotel Plaza announced it will sell its stake in Hotel Grand Plaza to Hong Kong's Park Hotel Group for 141.2 mln sgd. Hotel Plaza is expected to book a one-time gain of 86.6 mln sgd from the sale. "We have raised UOL's 2006 earnings per share forecast by 64 pct to 21.7 Singapore cents, on account of the 86.6 mln sgd divestment gain," CIMB-GK said in a client note. "We believe, given UOL's strong balance sheet, there is a fairly good chance that UOL may distribute the proceeds, although we have not factored this in in our forecasts," it added. CIMB-GK said UOL remains a key proxy to Singapore's asset reflation theme with its portfolio of quality investment properties and residential projects and is maintaining its "outperform" call on the stock. At 9.42 am, UOL was up 0.10 sgd or 2.86 pct at 3.60 with 498,000 shares traded.

Stock Downgraded: C&O target price cut to 0.26 by CIMB-GK

CIMB-GK Research has downgraded its call on C&O Pharmaceutical Ltd to "underperform" from "outperform" and slashed its target price to 0.26 sgd per share from 0.60 after the company issued a profit and sales warning for its its first quarter performance ending Sept 30. The China-based drug manufacturer and distributor yesterday said it expects to report lower first-quarter profit and sales figures as it reduces inventory at newly-acquired unit Shenzhen Liancheng Medicine Co Ltd, a distributor of its products, to one month from three months currently to better utilize its working capital. "The sales and profits of C&O would be adversely affected by the inventory adjustments and Liancheng's restrictions to sell other non-C&O products, at least in first half 2007, which typically form 35-40 pct of full-year earnings," CIMB-GK said in a note to clients. The brokerage has slashed its earnings forecasts for the company for the year to June 2007 by 51 pct to 71.3 mln hkd, for the following year by 33 pct to 120.2 mln, and for the year after that by 29 pct to 164.5 mln. "While the earnings weakness from the inventory adjustment could be short term, we are disappointed that the group did not articulate the potential execution risk relating to the acquisition much earlier," CIMB-GK said. " As it pans out, we do not see any earnings accretion from the Liancheng acquisition, which was management's rationale for the acquisition," it added. At 10.14 am, C&O Pharmaceutical was sharply lower, falling 0.04 sgd or 12. 5 pct to 0.28 with 7.55 mln shares traded.

Stock News: Citiraya falls on return, seen grossly overvalued

Shares in electronics waste recycler Citiraya Industries slumped when trading in them resumed after a 19-month suspension as the stock is considered grossly overvalued, dealers said. At 11.21 am, Citiraya was down 0.875 sgd or 81.02 pct at 0.205 compared to its pre-suspension price of 1.08. It was the most actively traded stock with a hefty 362.02 mln shares exchanged. The Straits Times index was up 1.54 points at 2,594.81. The trading resumption followed Citiraya shareholders' approval of a plan to restructure the company, which includes issuing and allocating 1.90 bln new shares, equivalent to 75 pct of its enlarged capital, to Equation Corp (formerly Heshe Holdings) and Oei Hong Leong Foundation for 16.01 mln sgd or 0.008485 sgd per share. "At the current price, market cap is about 500 mln sgd, which is outrageous. Fundamentally, the stock should be worth less than 0.10 sgd, " a dealer at a local brokerage said. "There is a lot of speculation now but I believe it will eventually drop to 0.10 sgd in a few weeks," he said. Trading in Citiraya was suspended in January last year at the start of a criminal investigation of senior officials of the company. Subsequently, its assistant general manager, Ng Teck Boon, was sentenced to eight years in prison for corruption. Ng was convicted in connection with a 1.82 mln sgd scam in which he bribed staff working with customers of Citiraya. The bribes were part of a ploy to divert unwanted electronic scrap to Citiraya so that the firm could resell it in other markets.

Stock News: Equation Corp lower as unit Citiraya slumps

Shares of Equation Corp, previously known as Heshe Holdings, edged lower, dragged down by the sharp fall in its 37.5 pct-owned unit Citiraya Industries Ltd, dealers said. Equation Corp was down 0.015 sgd or 7.14 pct at 0.195 on 65.21 mln shares. Top traded Citiraya Industries fell 0.88 sgd or 81.48 pct to 0.20 on hefty volume of 380.77 mln shares. Dealers said shares in electronics waste recycler Citiraya slumped when trading in them resumed after a 19-month suspension as the stock is considered grossly overvalued.

Stock News: Singapore Airlines says delivery of first A380 delayed to Q4 2007

Singapore Airlines Ltd (SIA) said the delivery of its first A380 aircraft will be delayed to the fourth quarter of 2007 and subsequent aircraft will arrive in 2008 and beyond. SIA was originally due to receive its first A380 early this year, but last month Airbus acknowledged that further delays in the program were possible. Airbus today confirmed a further delay to delivering the 19 A380 aircraft that SIA had ordered. "The delays are disappointing; all the more so because the flight test and certification programme is proceeding well, and the delays are down to production issues," the Singapore flag carrier said in a statement. SIA said it is assessing the impact of the delays on forward capacity growth and looking at options to mitigate the situation. Compensation will be provided under the confidential agreement between Airbus and SIA, it added. Nevertheless, SIA will still be adding new capacity, with its orders of 19 Boeing 777-300ER aircraft. The first Boeing 777-300ER aircraft will be delivered in November and another five before the end of this year, it said.

Stock downgraded: Magnecomp Int target price cut to 0.96 by UOB Kay Hian!

UOB KayHian said it has cut its target price for Magnecomp International to 0.96 sgd from 1.20 in view of the earnings volatility for the company's HDD suspension assemblies. It noted that significant improvement in sales volume will only be felt from the first quarter of next year, although average selling price is expected to recover in the fourth quarter this year when the new 160 gigabyte/platter 3.5-inch programme from Western Digital goes into mass production. In view of this, UOB KayHian has revised its 2006 net loss forecast from 7. 6 mln sgd to 14 mln sgd, but is keeping its "buy" call on the stock. At 2.22 pm, Magnecomp was flat at 0.785 sgd on trade of 14,000 shares.

Stock News: Biosensors higher on approval to market stents in Japan

Biosensors International Group Ltd was higher in midafternoon trade after the company announced that the Japanese Ministry of Health, Labor and Welfare has allowed its unit, Biosensors Japan Co Ltd, to market its bare metal S-Stent in Japan, dealers said. Biosensors was up 0.065 sgd or 7.43 pct at 0.94 with 9.92 mln shares changing hands. "With this approval, we can now market our S-Stent in Japan while awaiting the launch of our BioMatrix drug-eluting stent in Japan," Biosensors International chairman and chief executive Yoh-Chie Lu said in a statement. Citing industry statistics, the company said Japan's coronary stent market is estimated to be worth more than 600 mln usd. Biosensors has been producing and marketing its S-Stent in Europe since 2001.

Stock News: Sinwa KS higher on hopes of more rig orders

Sinwa KS Ltd was higher midafternoon on hopes the company will secure more contracts in the oil and gas exploration rig market after having formed a joint venture with KS Energy Services recently, dealers said. Sinwa was up 0.025 sgd or 7.94 pct at 0.34 with 5.86 mln shares traded, while KS Energy was down 0.04 or 1.63 pct at 2.41 with 723,000 shares traded. Last month, KS Energy Services and Sinwa KS Ltd won a 109.5-mln-usd deal to charter a jack-up rig to an unnamed state oil company in Central America for five years. Sinwa KS and KS Energy announced on Sept 21 that they were forming an equally-owned joint venture company to buy the rig and charter it to the customer. "We believe Sinwa's offshore ambitions will not be restricted to this single rig contract as management is currently exploring opportunities for other offshore equipment supply projects," Kim Eng Securities unit Kelive Research said. Kelive rates Sinwa a "buy" with a target price of 0.46 sgd per share.

Stock News: Boustead Singapore wins 35 mln sgd contracts

Boustead Singapore said it has won two contracts worth 35 mln sgd. The contracts involve the design and construction of key process equipment for a large refinery in North America and an LNG processing facility in North Africa. About 25 pct of the value of these contracts are expected to be recognized in the current year to March 2007.

ComfortDelgro sells stake in China joint venture for 5.1 mln yuan

ComfortDelgro Corp Ltd said its wholly-owned unit ComfortDelgro (China) Pte Ltd has sold its entire stake in joint venture company, Beijing ComfortDelgro Ya Tai Intelligence Transportation Technology Co Ltd to its venture partner Yatai Anxun Network Electronic Technology Co Ltd for 5.1 mln yuan. The sale of its 60 pct interest was the result of Yatai Anxun being unable to get approval from the Beijing Authorities to transfer their operating license to the joint venture company, ComfortDelgro said in a statement.

Stock News: Hotel Plaza may rise on sale of Hotel Grand Plaza

Hotel Plaza Ltd may edge up after it said it has agreed to sell Hotel Grand Plaza (Singapore) Pte Ltd to Park Hotel Strategic Investments Ltd for 141.2 mln sgd. Hotel Grand Plaza owns the 10-storey Parkroyal Hotel, which has 330 rooms, on Coleman Street. The company said the divestment will enable it to unlock the value of its investment in Hotel Grand Plaza and significantly reduce its gearing level. Yesterday, Hotel Plaza closed up 0.02 sgd at 1.35.

Stock Buy Call: Ezra by Kim Eng

Ezra Holdings Ltd may advance after Kim Eng Securities started covering the stock with a "buy" call and a target price of 4.05 sgd because it expects the company to benefit from rising charter rates for anchor handling, tug and supply vessels. "We expect the stock to outperform over the next 12 months, driven by positive earnings and news flow," Kim Eng said in a note. Ezra closed up 0.11 sgd at 3.06 yesterday.

Tuesday, October 03, 2006

Stock News: FJ Benjamin to open 20 Gap stores in Indonesia

Singapore's FJ Benjamin Holdings Ltd, a franchise partner of US specialty retailer Gap Inc, said it plans to open 15 Gap, BabyGap and GapKids stores and five Banana Republic stores in Indonesia by 2011. It said the stores will be in Jakarta, Surabaya, Bandung and Bali, with Jakarta to have the first Gap and Banana Republic stores in March 2007. Apparel retailer Gap owns the Gap, Old Navy and Banana Republic brands. The move follows the signing of an agreement between FJ Benjamin Lifestyle Pte Ltd, the Singapore subsidiary of FJ Benjamin Holdings, and GPS Strategic Alliances LLC, a wholly owned subsidiary of Gap Inc. The agreement will run until 2011, concurrently with similar agreements signed in January 2006 for Singapore and Malaysia. Angie Chong, CEO of FJ Benjamin Malaysia Sdn Bhd, FJ Benjamin Lifestyle Sdn Bhd and FJ Benjamin Lifestyle Pte Ltd, will oversee the launch and growth of the brands in Indonesia.

Stock Buy Call: SP chemical Ltd by DBS Vickers

DBS Vickers Securities said it has upgraded its rating on SP Chemicals Ltd to "buy" from a "hold" and increased its target price to 0.80 sgd from 0.59 per share given the stock's attractive valuations. "A higher utilization rate, energy cost savings from the Co-Gen plant and anticipated lower benzene costs derived from lower oil prices bode well for the group," DBS said in a client note. The brokerage has revised upwards its 2006 and 2007 net profit forecasts for the firm 23.7 pct and 38 pct to 233.7 mln yuan and 290.6 mln, respectively. "Valuations are attractive as the stock is only trading at 4.8 times and 3.9 times 2006 and 2007 forecast PE," it said. At 10.18 am, SP Chemicals was up 0.01 sgd or 1.61 pct at 0.63 with 532, 000 shares traded.

Stock Upgraded: Capitaland target price to 5.68 sgd by CIMB

CIMB-GK Research said it has raised its target price for CapitaLand Ltd to 5.68 sgd from 5.36 sgd, on the assumption of higher selling prices for the property developer's high-end residential developments and higher fair value for CapitaLand's listed units. The brokerage said that the target price was pegged at a 20 pct premium to the stock's revised net asset value (RNAV), which was raised to 4.74 sgd from 4.46. "(We) maintain an outperform call on the back of CapitaLand's leadership position in the property fund management business, its focus on capital recycling and its continued expansion in high-growth markets," CIMB-GK said in a client note. It noted that the consortium of CapitaLand and Kerzner will likely come out with a competitive bid for the Sentosa integrated resort and casino. "Kerzner/CapitaLand's 60:40 joint venture plans to invest 1.5-2 bln usd on the project and we estimate an attributable gain of 1.4 bln sgd, or 0.49 sgd per share for CapitaLand," it said. At 10.32 am, Capitaland was down 0.10 sgd or 1.92 pct at 5.10 on volume of 2.17 mln shares.

Stock Upgraded: Longcheer target price raised to 2.03 sgd by CIMB

CIMB-GK Research said it has raised its target price for Chinese mobile phone designer Longcheer Holdings to 2.03 sgd from 1. 65 sgd previously as it expects sales of handsets in the China market to significantly increase as mobile phone penetration grows in rural areas. "The current strength in operating numbers provides gives us reassurance that the existing business model still has some way to run, sustained by increasing mobile penetration into less sophisticated rural markets that are driven by handset feature and price comparisons and less by brand," CIMB said in a note to clients. In addition to domestic handset sales, CIMB said Longcheer is looking to export some of its handset models and is finalizing an order with a distributor in North America. Longcheer also expects to provide a sample order for mobile TVs by the end of the year, CIMB said. To factor in increased domestic orders and emerging export orders, CIMB said it has raised its years to June 2007 through 2009 net profit forecasts for Longcheer by 6-8 pct. At 10.36 am, Longcheer was up 0.075 sgd or 9.15 pct at 0.895 with 7.0 mln shares traded.

Stock News: Chip Eng Seng unit, WP Mauritius to develop residential property

Construction firm Chip Eng Seng Corp Ltd said its unit CEL Development Pte Ltd and WP Mauritius Holdings have entered into a joint venture agreement for a residential property development project here. The joint venture CES-West Coast Pte Ltd (CESW) will develop Westpeak Condominium, which was acquired in April for 206.09 mln sgd. CEL and WP Mauritius, a wholly-owned investment vehicle of Lehman Brothers Real Estate Partners II, will have equal stakes in CESW.

Ultro Technologies to issue 34 mln new shares at 0.046 sgd/share

Ultro Technologies Ltd said it will issue 34 mln new ordinary shares at 0.046 sgd each to raise about 1.54 mln sgd to repay debt, fund a legal suit and for working capital. The company said the shares were priced at an 8.8 pct discount to the volume-weighted average price of Ultro shares for trades done on the Singapore Exchange between Sept 29 and Oct 3 when trading was halted, and represent 14.4 pct of the firm's enlarged issued share capital. Proceeds will be used to retire bank borrowings from the United Overseas Bank Ltd, fund the legal suit between unit CP Solutions Pte Ltd and General Electric Co, while the balance will be used as working capital, Ultro said in a statement. Pending the deployment of the proceeds, Ultro said it may deposit the funds with financial institutions or invest them in short-term money markets or debt instruments.

Stock News: ASL Marine won 51.4 mln sgd contract

ASL Marine Holdings Ltd may gain after it said it won new shipbuilding contracts worth a total of 51.4 mln sgd to construct four Azimuth stern drive tugs and one offshore maintenance vessel for a European customer. The vessels are expected to be completed in 2008 and will be used in liquefied natural gas terminal operations in the Middle East. Yesterday, ASL closed down 0.005 sgd at 0.91.

Stock Buy Call: SIA Engg by Goldman Sachs

SIA Engineering Co Ltd may gain after Goldman Sachs started covering the stock with a "buy" rating and a 12-month price target of 4.40 sgd, citing its attractive valuation. "While we forecast earnings to grow at a solid CAGR (compounded annual growth rate) of 13 pct over 2006 to 2009, we believe the stock's key attraction is its low valuation," Goldman Sachs said in a note to clients. Yesterday, SIA Engineering closed up 0.12 sgd at 3.64.

Monday, October 02, 2006

Stock upgraded: Keppel Corp by Daiwa

Daiwa Institute of Research says it has raised its six-month estimate for the fair value of Keppel Corp stock to 15.60 sgd per share from 15.10 sgd to factor-in higher valuations for the company's oil-related assets. But Daiwa is keeping its "hold" rating for Keppel Corp. "At the current share price, we see little upside potential to our target price, and believe the stock is fully valued in the near term," Daiwa said in a note to clients. "We think there may be further downward pressure on the share price if oil prices remain at current levels over the next few months," it said. However, the research house regards the medium-term outlook for Keppel Corp as bright because it expects demand for offshore oil and gas rigs to remain strong over the next 3-5 years, in view of high energy prices and the aging of the world's fleet of rigs. At 9.05 am, Keppel Corp was down 0.10 sgd or 0.68 pct at 14.70, with 37, 000 shares traded.

Stcok upgraded: Venture with price target of 13.8 by OCBC

OCBC Investment Research said it has lifted its fair value for Venture Corp to 13.80 sgd from 12.60 on the back of a more upbeat outlook for electronic contract manufacturers from the second half of the year onwards. It is keeping its "buy" recommendation on Venture. "Venture Corp's diversified portfolio appears to be on track to produce a good performance in the seasonally stronger half," OCBC Investment analyst Carey Wong said in a note. He said the company may get some margin boost from its niche products/others divisions, which manufactures higher-margin products like medical, automotive and other measuring devices. Wong raised his 2007 revenue forecast for Venture by 5.7 pct to 4.3 bln sgd to factor in higher contributions from the proposed acquisition of GES International Ltd and other recent acquisitions. OCBC Investment also raised its 2007 net profit forecast for Venture by 6. 1 pct to 269.2 mln sgd. At 9.21 am, Venture was up 0.50 sgd or 3.97 pct at 13.10 on volume of 160, 000 shares.

Stock Buy Call: ST Eng with price target of 3.18 by ML

Merrill Lynch said it has resumed coverage of ST Engineering with a "buy" rating and a 12-month target price of 3.18 sgd per share given the firm's strong yield and decent growth prospects. "The dividend yield remains a key highlight as the group remains committed to a 100 pct payout ratio, translating to a yield of over 5 pct," Merrill Lynch said in its client note. The brokerage added it expects ST Engineering's earnings to grow as recent acquisitions are integrated into core operations and contribute to earnings. "We forecast an earnings CAGR (compounded annual grow rate) of eight pct over 2006-2008," it said. Merrill Lynch expects the firm's net profit, before exceptionals, to grow to 434 mln sgd this year from 396 mln last year, then to 474 mln next year, and to 508 mln in 2008. At 10.13 am, the stock was up 0.03 sgd or 1.05 pct at 2.88 with 557,000 shares traded.

Stock Outperform Call: Best World by CIMB-GK

Best World International Ltd, a developer and distributor of beauty and lifestyle products, was higher after CIMB-GK Research said it was keeping its "outperform" rating for the stock because of the firm's expansion. In early trading, Best World was up 0.005 sgd or 0.84 pct at 0.60, on volume of 65,000 shares. "In our recent update with management, we came away assured that Best's regional expansion and new product line-up are relatively on track," CIMB-GK said in a note. It said that the company's penetration of Taiwan and Hong Kong and the launch of a car ionizer would enable Best World to attain growth of 32 pct in its earnings per share next year. CIMB-GK is keeping its target price of 0.90 sgd for Best World, saying that the stock offers an attractive yield.

Stock Buy Call: Wing Tai Holding with price target of 2.22 by UOB Kay Hian

UOB Kay Hian says it has raised its rating for property developer Wing Tai Holdings Ltd to "buy" and increased its 12-month target price to 2.22 sgd per share in anticipation of a sustained upswing in the high-end residential market here and a recovery in the broader housing market. The research house did not give its previous rating and target price for the stock. UOB Kay Hian said in a note that prices of luxury residences here had risen to an average of 1,670 sgd per square foot, the highest in nine years, and that interest by foreign buyers should continue to bolster demand for high-end residences. It said that the range of developments in which Wing Tai will begin selling units in the financial year ending next June placed it in a favourable position to exploit the recovery in the property market. "We raise our [year to June] 2007 net profit forecast from 53.8 mln sgd to 122.7 mln sgd, and hence also lift our revised net asset value estimate from 1.53 sgd to 2.02 sgd to factor-in the higher earnings," it said. At 10.52 am, Wing Tai was up 0.07 sgd or 3.7 pct at 1.96, on volume of 2. 18 mln shares.

Stock Buy Call Sim Lian with price target of 0.7 by Kim Eng

Sim Lian Group Ltd was higher as it is seen to benefit from the expected upswing in Singapore's property market, dealers said. It announced last week that it will buy a 46,472 square feet site in Telok Kurau that can be redeveloped into a residential condominium with a plot ratio of 1.4 times. Kim Eng Securities noted the firm has been aggressively building its landbank amid a more upbeat residential property market, and it expects Sim Lian to have a strong earnings base from its residential developments up to the year to June 2010. Sim Lian had also ventured into residential development in Malaysia that will help diversify some of the property cycle risks in Singapore, and also provide another source of development profits for the company in the next few years, Kim Eng said. The brokerage advises a "buy" on the stock with a target price of 0.70 sgd. At 12.12 pm, Sim Lian was up 0.015 sgd or 2.7 pct at 0.57 with 107,000 shares changing hands.

Stock News: FJ Benjamin in talks to sell office building

FJ Benjamin Holdings Ltd said it is in talks with an unidentified buyer to sell its the building that houses its corporate headquarters on Orange Grove Road. The market value of the property is about 37 mln sgd. Proceeds from the sale will be used to repay debts and fund the group's working capital requirements, it said.

Stock News: Ntegrator secures 3.12 mln sgd contract from Vietnam telco

Ntegrator International Ltd said it has won its third contract from Viettel Corporation, Vietnam's second largest telecommunications company, worth 3.12 mln sgd. The contract to provide Viettel with an internet protocol digital subscriber line access multiplexer, complete with a network management system, is expected to be completed by year-end.

Stcok News: Singapore Press unit buys Hardware Zone for 7.1 mln sgd

Singapore Press Holdings said its unit SPH Magazines has agreed to buy online magazine publisher Hardware Zone for 7.1 mln sgd. `Hardware Zone's online magazine business strategy will complement SPH Magazines' strong print magazine business and this will augment SPH Magazines' profile in the region as a major publisher with multi-platforms to offer its readers and advertisers," SPH said.

Stock New: Linair Tech plans rights issue of 28.80 mln shares at 0.13 sgd/shr

Linair Technologies Ltd has proposed a 3-for-1 renounceable non-underwritten rights issue of up to 28.80 mln new shares at 0. 13 sgd each, with one free detachable warrant for every two right shares subscribed. Each warrant carries the right to subscribe to one new Linair share at an exercise price of 0.17 sgd. Linair said the rights issue price represents a discount of 29.7 to its closing price of 0.185 sgd today. Assuming the rights issue is fully subscribed, the company said it expects to raise net proceeds of 3.5 mln sgd, which will be used to expand its business in China, the Middle East, and Vietnam, as well as for product development.

Stock news: CapitaLand to delist Raffles Holdings; makes 0.06 sgd exit offer

Property developer CapitaLand Ltd has formally proposed to voluntarily delist its 58.51 pct-owned unit Raffles Holdings Ltd from the Singapore Exchange, offering to pay Raffles Holdings shareholders an exit price of 0.06 sgd per share in cash, the two companies said in a joint statement yesterday. The exit offer price, which values Raffles Holdings at 128.1 mln sgd, represents a premium of 37 pct over the unaudited residual net tangible assets of the RHL Group as of end-September, after adjusting for the capital distribution and special dividend. The offer is conditional upon the distribution of 0.37 sgd per share from a capital reduction exercise and payment of 0.33 sgd per share in special dividend by Raffles Holdings, expected on Oct 17. CapitaLand will also make an offer to acquire Raffles Holdings' outstanding options. Raffles Holdings completed the sale of its remaining asset - Raffles City Complex - on Sept 1 and has received a net aggregate amount of 2.13 bln sgd in cash from RCT Trust, a special purpose sub-trust jointly owned by CapitaCommercial Trust and CapitaMall Trust, both of which are real estate investment trust units of its parent CapitaLand. Raffles Holdings requested for a trading halt today, citing the release of price-sensitive information