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Giken Sakata (S) Ltd – FY14 analyst briefing highlights‏

Shared By Stock Fanatic on Friday, October 31, 2014 | 31.10.14

OCBC Research attended Giken Sakata (S) Ltd’s (“GSS”) FY14 results briefing this morning. Here are some key takeaways:

Traders' Corner - Genting Singapore, Innovalues, Biosensors International and Tiger Airways

Daily Chart
Genting Singapore (GENS SP, G13)
Technical BUY with 10.0% potential returns
Last price: S$1.055
Target price: S$1.16
Protective stop: S$0.99

BUY with a target price of S$1.16 with protective stops placed at S$0.99. The technical sell on 2 Oct 14 with a target of S$1.04 has been achieved recently. Currently the stock looks poised to rebound should there be a follow through of the potential bullish engulfing pattern. Watch the stock to see if it continues to trade above the 15-day EMA after the MACD indicator has formed a bullish crossover with a higher low.

Expected timeframe: 2 weeks to 2 months

Our institutional research has a fundamental BUY with a target price of S$1.32.

Top pick for the day - MSCI Asia Ex-Japan

Is the rebound over?

This title appears appropriate for both the ST and LT view for the MSCI Asia Ex-Japan (MXASJ) right now

ASEAN Grocery Retailing - Here Is Your Shopping List

We expect ASEAN (total population: >600m) to be an important economic growth region going forward. Grocery retailing fulfils basic needs and consumers will look toward upgrading this experience as income levels increase. This is an irreversible structural trend that will take-off over the next decade regardless of short-term economic cycles, in our view. Our Top 5 picks include three grocery retailers and two branded consumer firms.

MTQ Corp - First Victory In Bahrain

MTQ delivered a healthy 2QFY15 with SGD5.4m in PATMI (-3% YoY, +28% QoQ) and strong cash flow. It crossed a significant milestone when management reported a profitable quarter in Bahrain amid healthy organic growth in Neptune. Lower utilisation in the Singapore facility and slow starts in the Binder Group marred an otherwise spotless quarter, prompting us to lower FY15/16F earnings by 22/18%. 

Our TP drops to SGD1.74 (vs SGD2.16), implying a 35.1% upside. Maintain BUY.

SIA Engineering - SIAEC And Boeing Eyeing India; Upgrade To HOLD

SIAEC is reportedly in talks to enter the Indian MRO market via a JV with Boeing. We reckon the JV will very likely team up with Air India, the largest operator of Boeing aircraft. If tax levies are reduced, the JV will be able to leverage on India’s lower labour costs and provide long-term growth. 

Upgrade to HOLD. Target price: S$4.90. Entry price: S$4.50-4.60.

Indonesia Strategy - Trading Opportunity In CPO To Emerge In December

Over the past five years, the JAKAGRI Index, which consists of CPO plantation companies, has delivered capital appreciation of an average 4.7% in December. Analysing the 3Q14 performances of CPO companies, most managed to deliver net income that declined less than 15% qoq. This is better than expected as CPO price has declined 11.4% qoq in 3Q14. SGRO and DSNG delivered better-than-expected results in 9M14 on the back of strong production growth.

Jardine Cycle & Carriage Ltd - Performance vs Astra starting to revert after extended outperformance

Starting mid March, JCNC outperformed Astra by over 15% (in USD). We see a weakening Rp as the major driver of this differential. While the rupiah ahs not shown signs of strengthening yet, we think that the relative performance has run its course. An evaporation of JCNC's discount to NAV was the trigger for us to downgrade the stock recently. (see our JCNC downgrade note)

This performance reversal appears to have begun. JCNC has underperformed Astra by 5% this week. We see a further relative move of 10% or so, and recommend switching from JCNC to Astra.

Shipyards & Oil Services - Gas Malaysia ups gas tariff for non-power sector by RM0.45 / MMBtu; Samsung Heavy buys back

Singapore/Malaysia Offshore & Marine News
Gas Malaysia ups natural gas tariff for non-power sector from Nov 1 in Peninsular Malaysia to an average of RM19.77 per MMBtu from RM19.32. The revised tariff would take effect on Nov 1 but there will be no change to the selling prices for customers under category A, which represent the residential segment. Additionally, the tariff increase does not apply to Liquefied Petroleum Gas (LPG). (The Star, Oct 29)

ASEAN Oil Services - Post the fall, is there a rise? PACRA, EZI key OWs; stick with Malaysia (SAKP,DLG); avoid builders (SMM)

Based on the recent 20%+ oil price fall, we have seen 15-35% price correction in the sector

With – 
(1) global E&P capex cuts likely in ‘15E (JPM est cut of 2.5%) and Petronas to cut ‘15 capex; and 

(2) low oil prices – we review our views and 

 (1) identify ‘nuggets of opportunity’ (PACRA, EZI), 

(2) reiterate our positive stance on Malaysia (SAKP, DLG), and 

(3) avoid builders (SMM, MMHE).

United Overseas Bank - Strong trading gains pad it up

Shared By Stock Fanatic on Thursday, October 30, 2014 | 30.10.14

UOB’s 3QFY14 net profit of S$866m beat our expectations (S$788m) and consensus (S$736m), primarily due to strong trading gains and partially due to the pick-up in several fee income streams. 3Q14/9M14 net profits were 27%/79% of our full-year estimates. While the positives were all on the non-interest income side, UOB’s relatively high provisioning vs. peers took some gloss off the good results. 

We tweak our EPS forecasts, and roll forward our GGM-based target price (1.32x CY15 P/BV) to S$23.79. While a beat, the trading gains in 3Q lend a tone of unsustainability. Also, a second consecutive quarter where provisioning (45-50bp) looks high vs. peers, leaves a niggling fear on credit quality and pulls us back from an upgrade. Maintain Hold.
**** Recommendation ****

Intra-Day Summary

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