Thursday, November 23, 2006

Stock Upgraded: Sino Env target price raised to 1.78 by UOB Kay Hian

UOB Kay Hian said it has lifted its target price for Sino Environment to 1.78 sgd per share from 1.396 previously as it expects the company to secure more desulphurization deals going forward after it was recently awarded its maiden desulphurisation contract by Xinjiang Changji Power Plant in China. "While the contract value of 62.5 mln yuan is not significant, we believe this is a sign of more contracts to come as Sino Environment teams up with a major power plant operator to win more desulphurization projects," UOB said. "We value the China market for desulphurization facilities at 90 bln yuan over the next five years as new and existing power plants comply with government regulations to reduce sulphur dioxide emission," it added. To factor in the contributions from the initial desulphurization contract, UOB Kay Hian said it has lifted its 2007 net profit estimate for Sino Environment by 4.5 pct and its 2008 net profit estimate by 9.7 pct. At 10.56 am, Sino Environment was up 0.06 sgd or 3.7 pct at 1.68 with 1.5 mln shares traded.

Stock Upgraded: AusGroup target price raised from 0.7 to 0.8 by Westcomb

Westcomb Securities has upgraded its target price for AusGroup Ltd to 0.80 sgd from 0.70, saying it expects wholly-owned unit Cactus' earnings to continue benefiting from the robust demand in the oil and gas industry. AusGroup provides engineering services to the oil and gas sector. "We are of the view that Cactus will perform exceedingly well on the back of the robust demand for subsea systems as well as related offshore components for oil and gas exploration activities," Westcomb said in a note to clients. "Cactus has increased its staff strength and added yard capacity in Singapore to cope with the rising orders from its key customers," it added. Westcomb expects AusGroup's net profit to rise from 11.28 mln aud in the year to June 2006 to 20.2 mln in the current fiscal year and to 24.4 mln in the following year. Growth will be driven largely by contributions from Cactus, which became a fully-owned subsidiary last month. AusGroup bought an initial 76.6 pct stake in Cactus in May. At 11.30 am, AusGroup was up 0.035 sgd or 7 pct at 0.535 with 27.22 mln shares traded.

Stock Upgraded: Advanced Holding target price raised from 0.46 to 0.54 by Westcomb

Westcomb Securities said it has upgraded its rating for Advanced Holdings Ltd to "buy" from "hold" and increased its 12-month target price to 0.54 sgd from 0.46 following the firm's first clean fuel contract. Advanced Holdings has said it secured a 3.5-mln-usd contract to supply clean fuel process equipment to a new grassroot refinery China, and expects to secure another 2.5 mln usd worth of contracts from the same firm in the next few months. "Given its exclusive agreements with DuPont and MECS [Monsanto Enviro-Chem Systems Inc] for the marketing of alkylation process equipment and technologies, and with Axens for the distribution of a range of hydrogenation processes and technologies, Advanced is in an advantageous position to secure more contracts for clean fuel process equipment in China," Westcomb said. It also increased its earnings estimates for the firm, and now expects Advanced to record a net profit of 60.2 mln sgd next year instead of 53.6 mln. At 2.05 pm, Advanced Holdings was up 0.005 sgd or 1.52 pct at 0.335 with 2.67 mln shares traded.

Stock Upgraded: China Dairy upgraded from fully valued to hold by DBS Vickers

DBS Vickers Securities has upgraded its call on China Dairy Group Ltd to "hold" from "fully-valued" and raised its 12-month target price to 0.59 sgd from 0.55 on the back of an expected increase in demand for dairy products. "According to global management consulting firm, McKinsey & Co, sales of dairy products are projected to almost double to 19.6 bln usd in 2010 from 10 bln in 2005," DBS said in client note. "With strong presence in its home market Shaanxi province, and its current focus on building up its presence in neighbouring provinces such as Henan, Shanxi and Gansu, we believe the group would be able to ride on the dairy market boom," it added. DBS also believes that while the company's shares are trading at a discount to its peers, the current disparity is harsh. "We see a stark contrast and believe a 25-40 pct discount would be more applicable, given the overall market growth potential and China Dairy's regional presence," it said. At 2.22 pm, China Dairy was up 0.01 sgd or 1.77 pct at 0.575 with 1.29 mln shares traded.

Stock News: Cosco won 106 mln usd contracts!

Cosco Corp (Singapore) Ltd extended its gains after the company said 51 pct-owned unit Cosco Shipyard Group had secured conversion contracts together worth 106 mln usd. In early trading, Cosco stock was up 0.05 sgd or 2.39 pct at 2.14, with 1.28 mln shares traded. "We expect to see more conversion projects in 2007 as ship owners comply with strict International Maritime Organization safety regulations," Cosco Corp president Ji Hai Sheng said in a written statement. "These conversion projects will contribute significantly to the group's earnings."

Stock News: China Paper to build 80 mln plant!

Integrated paper manufacturer China Paper Holdings Ltd edged higher after it said that it will spend about 80 mln yuan to build an enhanced wastewater treatment plant to comply with new government regulations on the environment. The firm said the plant will be funded internally, and construction will start on Jan 1, 2007, to be completed by June next year. In early morning trade, China Paper was up 0.03 sgd or 9.84 pct at 0.335 on brisk volume of 5.32 mln shares.

Stock Upgraded: Cosco target price raise to 2.57 by CIMB-GK

CIMB-GK Research has raised its target price for Cosco Corp (Singapore) Ltd to 2.57 sgd from 2.17 after its unit Cosco Shipyard Group (CSG) won conversion contracts together worth 106 mln usd. CIMB-GK estimates the latest contract will bring CSG's order book to 785 mln sgd, of which 80 pct may be recognized next year. "Cosco's order book visibility is growing much better than anticipated. The bread and butter business is looking much more exciting than previously thought,' CIMB-GK said. On the back of the new contracts, CIMB-GK said it has lifted its earnings estimates for 2007 and 2008 by 16 pct and 3 pct, respectively. "Cosco's contract win momentum is not spent yet. We anticipate this based on the massive capacity expansion coming through on its Zhoushan (China) yard (that will) increase group capacity by 30 pct by mid-2007," CIMB-GK said, adding Cosco may also secure an order for a full jack-up oil rig soon. At 9.44 am, Cosco was up 0.02 sgd or 0.96 pct at 2.11 with 3.42 mln shares traded. SembCorp Marine Ltd, which holds a stake in both CSG and Cosco Singapore, added 0.04 sgd at 3.26.

Stock News: K1 Venture to sell 5% stake in Good TEchnology to Motorola!

K1 Ventures said it will sell its 5 pct stake in mobile computing software firm Good Technology Inc to Motorola Inc. The company did not disclose the terms of the deal, which is expected to close in early 2007 subject to regulatory approval. But it did say certain closing conditions could have an impact on the timing and amount of cash that will be distributed to the owners of Good Technology, which would also impact the gains that will be recognized from the deal.

Stock News: ST Engineering won 165 mln usd contract!

ST Engineering was higher after the company said its US shipyard unit, VT Halter Marine Inc, had won a 165 mln-usd contract modification deal with the US Navy for the Egyptian Navy's fast missile craft (FMC) project. In early afternoon trading, ST Engineering was up 0.05 sgd or 1.67 pct at 3.04, on volume of 945,000 shares. The company said the total value of contracts it has been awarded for work on the FMC project was now about 194 mln usd.

Stock Downgraded: Interra Resources downgraded from Buy to Hold by Net Research!

Net Research has downgraded its rating for Interra Resources Ltd to "hold" from "buy" and lowered its fair value to 0.29 sgd after the company reported a net loss for the third quarter. The brokerage did not say what its previous fair value estimate was. "We do not foresee Interra to report positive earnings for the full year results in view of the 2.4 mln usd net loss sustained in third quarter 2006," Net Research said in a client note. The firm, which extracts crude oil from oil wells in Indonesia and Myanmar, said the loss was largely due to an impairment write-down of 8.8 mln usd in assets. "However, any subsequent reversal of impairment due to improvement in collection of receivables can favorably boost the earnings," the brokerage added. At 2.30 pm, Interra Resources was up 0.015 sgd or 5.09 pct at 0.31 with 1.36 mln shares traded.

Stock News: Advanced Holding won 3.5 mln usd contract!

Advanced Holdings Ltd said it has won its first clean-fuel contract worth 3.5 mln usd to supply alkylation process equipment to a new grassroot refinery in China. The company said it expects to win more orders from the Chinese oil firm in the next few months, for total contracts of over 6 mln usd. The name of the Chinese oil firm was not provided. "The project has established the start of our clean-fuel business, and we believe this will set the stage for our future clean-fuel process technologies and equipment contract wins in China and elsewhere," Advanced Holdings managing director Kar Wong said in a statement. "We anticipate immense opportunities for clean-fuel refinery technologies and equipment, especially in view of the China government's race to implement the Euro IV emission standard in Beijing by 2008 and naitonwide in China by 2010," he added.

Stock Upgraded: Swissco Int target price raised to 0.81 by CIMB-GK

CIMB-GK Research said it has lifted its target price for Swissco International, a provider of offshore support vessels to the oil and gas industry, to 0.81 sgd per share from 0.71 previously to factor in the enhanced value of its stake in 14.9 pct-owned associate Swiber Holdings Ltd. The share price of Swiber, which started trading on the Singapore Exchange two weeks ago, has more than doubled from its IPO price of 0.355 sgd to as much as 0.805 sgd earlier this week. "Swissco's 14.9 pct stake in Swiber is worth 43.7 mln sgd," CIMB-GK noted. "We maintain our 'outperform' rating on Swissco based on (its) exposure to buoyant spot (charter) rates, capacity expansion, potential vessel divestments and takeover possibility," it added At 9.16 am, Swissco was up 0.025 sgd or 4.55 pct at 0.575 with 5.42 mln shares traded. Swiber was unchanged at 0.795 with 125,000 shares traded.

Stock Buy Call: Epure with target price of 1.08 by DBS Vickers

DBS Vickers says it has started covering Epure International Ltd with "buy" rating and a target price of 1.08 sgd."Epure is well poised to capitalize on the opportunities in the waste water treatment sector, underpinned by China's growing awareness on [sic] environment protection," the brokerage said in a note. "With its proven track record, strong management team and reputable brand name, we believe that Epure can differentiate itself by focussing on larger-scale and greater-technical-complexity projects," it said. It said that Epure's orders, worth 419 mln yuan at the end of the third quarter, provided clear earnings visibility for this year. At 9.18 am, Epure was up 0.055 sgd or 6.75 pct at 0.87, on volume of 4.42 mln shares.

Stock Upgraded: A_REIT target price raised to 2.5 by CIMB-GK

CIMB-GK says it has raised its target price for Ascendas Real Estate Investment Trust (A-REIT) to 2.50 sgd from 2.43 sgd to reflect higher yields from the trust's new deal to develop a partial build-to-suit distribution facility at Changi LogisPark here. Ascendas REIT has said the cost of development is 32.5 mln sgd and that the site will be developed into a two-storey distribution center and office facility scheduled for completion in early 2008. CIMB-GK said in a note: "Assuming stabilized occupancy of 87 pct and [a] gearing level of 40 pct, we estimate the investment yield of this development property to be as high as 8 pct, in line with the high-yielding nature of such projects." The brokerage has therefore increased its forecast of distribution per unit for A-REIT by 2.2 pct to 0.139 sgd for the financial year ending March 2009. It is keeping its "outperform" rating for A-REIT. At 9.57 am, A-REIT was up 0.03 sgd or 1.29 pct at 2.36, on volume of 826,000 shares.

Stock News: Penguin Boat Int secured 20 mln sgd deals!

Penguin Boat International Ltd may advance after it said that its unit Penguin Shipyard International Pte Ltd has secured 20 mln sgd worth of deals to build four 36-meter aluminium crewboats. The new orders increased its order book to 38 mln sgd, it said. Penguin fell 0.005 sgd to close at 0.175 yesterday.

Stock News: Sunpower won 3 mln contract!

Sunpower Group Ltd may edge higher after it said that it won a 3 mln usd deal to install pressure vessels for CTCI Overseas Co Ltd, a unit of Taiwan-listed CTCI Corp. Sunpower said the deal, the third one secured from CTCI this year, has boosted the company's overseas contracts to 17.2 mln usd to date. Sunpower was unchanged at 0.155 sgd at the close of trading yesterday.

Friday, November 03, 2006

Stock Upgraded: Hyflux upgraded from reduce to neutral by UBS

UBS Investment Research has upgraded its rating for Hyflux Ltd to "neutral 2" from "reduce 2" and increased its target price to 2.70 sgd per share from 2.30 after the company announced it won a contract in Algeria. Hyflux has a 10.2 pct stake in a consortium that won a 205 mln usd, 25-year contract to build and operate a seawater desalination plant in Algeria. More importantly, UBS said a subsidiary of Hyflux will undertake all the engineering, procurement, and construction work for the project, which it estimates is worth 328 mln sgd. "The project will probably commence in mid-2007 and revenue recognition is likely to be in 2008 and 2009. "We estimate it would amount to an additional 20 mln sgd in earnings in those years," UBS said in a client note. "We revise up our EPS (earnings per share) estimate for 2008 from 0.15 sgd to 0.19 sgd." UBS expects Hyflux's net profit to grow to 38 mln sgd this year from 21 mln last year, then to 56 mln in 2007, and to 98 mln in 2008. At 11.17 am, Hyflux was up 0.04 sgd or 1.54 pct at 2.64 with 195,000 shares traded.

Stock Upgraded: Venture upgraded from sell to neutral by ML

Merrill Lynch has upgraded its rating on Venture Corp Ltd to "neutral" from "sell", citing the company's improving fundamentals, with progress into high mix, high-value businesses supporting better margins. "Venture Corp's fundamentals have been improving gradually starting second quarter this year, and we anticipate continuous margin improvement for the second half of this year onwards," the brokerage said in a note. Hence, Merrill Lynch said it is expecting Venture to post a solid second half, with revenue of 1.62 bln sgd, up 9 pct from the first six months of the year and net profit of 129 mln sgd, up 27 pct from the first half, led by a seasonal pick up in printing and imaging, stronger-than-expected data storage orders and more design driven businesses for test and measurement segment. The brokerage also raised its net profit estimates by 9 pct to 231 mln sgd for 2006 and by 4 pct to 246 mln for 2007 to factor in higher margins. But Merrill Lynch said it remains cautious about integration risk associated with Venture's acquisition of GES International. At 11.21 am, Venture was down 0.20 sgd or 1.37 pct at 14.40 on volume of 1.17 mln shares.

Stock Result: Norelco UMS Holdings

Norelco UMS Holdings Ltd third quarter to September results:
Sales - 43.90 mln sgd vs 38.14 mln
Pretax profit - 12.94 mln sgd vs 3.41 mln
Net profit - 13.09 mln sgd vs 3.06 mln
EPS - 3.20 cents vs 0.75
Nine months to September results:
Sales - 128.40 mln sgd vs 115.64 mln
Pretax profit - 23.65 mln sgd vs 11.16 mln
Net profit - 22.43 mln sgd vs 10.07 mln
EPS - 5.48 cents vs 2.46

Stock Upgraded: ST Engg target price raised to 3.3 by ML!

Merrill Lynch said it has upgraded its target price for ST Engineering to 3.30 sgd per share from 3.18 previously after the company posted modest growth in its third quarteearnings. Yesterday, ST Engineering reported that its third quarter net profit rose 10 pct year-on-year to 114.99 mln sgd, in line with the 100-116 mln sgd forecast made by analysts polled by XFN-Asia. "The outlook remains positive for ST Engineering, in our view," Merrill Lynch said in a note to clients. "The third-quarter results were not spectacular, but we believe that management is making excellent progress in establishing a long-term earnings platform for the group. "The integration of recent acquisitions has encountered no problems thus far and management is optimistic that profit contribution should gradually increase over the next year," it said. Merrill Lynch said it has slightly increased its 2007 and 2008 net profit estimates for ST Engineering to 476 mln sgd and 513 mln, respectively, to factor in contributions from the 635 mln usd Airbus contract. At 11.27 am, ST Engineering was down 0.02 sgd or 0.66 pct at 3.02 with 637,000 shares traded.