Singapore Economic Update : NODX retreated in Mar

Singapore’s non-oil domestic exports (NODX) fell 6.6% yoy in Mar (+8.9% in Feb), below our forecast (-4.9%) and market estimate (+0.5%). The decline was due to lower electronics (-16.1% yoy) and non-electronics NODX (-2.4% yoy). Mom, NODX contracted 8.9%, on a seasonally-adjusted basis. This, however, does not derail our expectation that NODX will expand 5-6% in 2H14 (estimated 3-4% for 1H14), amid an undemanding yoy base and a stronger pick-up in global demand. 

We maintain our 2014 NODX-growth forecast of 3-5% (-6.0% in 2013).

Neo Group Limited - Capacity expansion heightens potential for growth

Stellar FY14 result, expect expansion to continue

■ Neo Group’s revenue hit record high at S$52.4m (+25.6% yoy), underpinned by the strong 27% growth in its food catering business.

■ Net profit grew by 111.9% yoy to S$6.4m in FY14 (FY13: S$ 3.0). The strong growth in net profit was mainly attributable to the strong top line expansion as well as an improving EBIT margin due to the economy of scale.

■ Supported by the strong EPS of 4.4 Scts, Neo Group proposed to pay out cash dividend of 2.67 Scts per share (60% pay-out ratio).

■ We expect the group’s bottom line to continue expanding, driven by the new capacity that will come online in 2HFY15 as well as the continued improving operating efficiency from cost control.

Top pick for the day - Malaysia’s FBMKLCI

A big push is underway?

After consolidating for the past two weeks, the FBMKLCI may be ready to kick on from here.

The longer term trend for the FBMKLCI is still up as long as price stay above the 1,825 levels, thus allowing a push above the 1,872 closing high and likely a push above the 1,882 intra-day high in the coming days if not weeks.

TSMC - Expect a strong 20nm ramp and GM uptick; raise PT to NT$140

With a 3% increase in our FY14 earnings estimate and a shift of our investment horizon to Dec-14, we raise our PT on TSMC to NT$140 (15x FY15E earnings, the long-run average P/E) due to an earlier-than-expected inventory cycle, strong 20nm demand pickup in the next two quarters and a potential gross margin pickup in 2014 despite a rise in depreciation expense. We also model an increase in dividends in 2015 after eight years of flat payouts, now that capex intensity is declining. We expect the Street to raise estimates following TSMC’s analyst meeting on April 17.

Tiger Airways Holdings - March 2014 Operating Stats: Carriage growth continues to lag capacity growth

March operating statistics disappoint

Capacity grew 24.0% yo- y to 1,109m ASK, exceeding the y-o-y RPK growth of 14.6%. Thus, load factor faced a 6.5-ppt y-o-y reduction to 79.2%. YTD, carriage growth of 16.3% y-o-y to 9.3bn RPK has lagged a 25.5% growth in ASK, with a 6.2-ppt decline in load factor to 78.1%.

ASEAN PropertyPulse - Due diligence on for Pru Tower; 15% land price correction; Another Chinese developer in Danga Bay

Prudential Tower

■ KOP in due diligence on Prudential Tower; long KPLD, short KREIT

■ UOL’s win implies a 15% land price correction

■ Greenland Group buys Danga Bay land for RM600m

Sabana Shari'ah Compliant REIT - 1Q14: Weakest Quarter Since IPO; Downgrade To SELL

Property Portfolio

Sabana reported its weakest quarterly results since IPO as lower occupancies, weaker margins, higher property expenses and higher finance costs led to a 22% yoy and 14% qoq drop in DPU. Key downside risk are the master leases comprising 58% of NLA due to expire in 2014-15, while potential upside catalyst would come from Sabana filling the 23% vacant space at its multi-tenanted properties. 

Downgrade to SELL (from HOLD) with a DDM-based target price of S$1.02.

Singapore Press Holdings - Key Takeaways From Luncheon Presentation

Overall, a set of disappointing results. 2QFY14 registered a mixed bag of one-off items, the largest being a S$52.9m gain from the partial divestment of 701Search, a regional online classified business. Advertising revenue contraction widened to 7.3% yoy in 3QFY14 from -2.9% yoy in 1QFY14. Property business was stable. 

Maintain HOLD. Target price: S$4.00. Entry price: S$3.80.

Traders' Corner - Pacific Radiance, M1, Lian Beng Group & Ley Choon Group

Daily Chart

Pacific Radiance (PACRA SP,T8V)

Technical BUY with +12.1% potential return

Last price: S$1.07

We maintain our technical BUY (featured on 20 Mar 14 and the technical target of S$1.11 was achieved on 2 Apr 14) with a revised target price of S$1.20. The stock appears to form an interim "tweezer bottom" after rebounding from a potential resistance-turned-support level at S$1.025, which is also near to its rising 35-day EMA. Watch to see if the stock could retest its previous high of S$1.115 as its 14-day Stochastics indicator has formed a bullish crossover near its oversold region. Protective (trailing) stops could be placed at S$1.01.

Our institutional research has a fundamental BUY with a target price of S$1.22.

Top pick for the day - Gold

Going nowhere

Gold appears to be stuck within a very large sideways pattern. We expect prices to trade sideways (but within a large range) for the at least a few more months before the sideways triangle pattern terminates.

Keppel Land - OW: Post-results lunch with investors

■ Investor discussions largely focused on strategy and outlook for residential in Singapore and China

■ Sales momentum in China dependent on project launches; expectations of some possible selective easing of restrictions

■ TP unchanged at SGD3.95; reiterate OW