– 13 October 2014 Morning Matters Scoop of The Day

Strategy, 3013
December
October 2013
2014
Morning Matters – 13 October 2014
To access today’s reports, please click on the links below
Vard Holdings (NEUTRAL) - Lower Oil Prices Hurting Deepwater Investments – 10 October 2014
Scoop of The Day
Parkson Retail Asia (PRA SP) has decided to take up the mandatory offer by Joint Offerors in its 47.5%-owned Sri-Lankan
associate. PRA will receive cash of SGD27.6m, and book a one-time gain of SGD0.6m over the book value. PRA originally
invested around SGD13.5m in ODEL back in 2012. We do not see a major impact on the company, given that the associate only
contributed 1.4% of FY14 net profit. On the other hand, the proceed further boosts PRA's net cash position (SGD150.1m), allowing
them to continue paying out healthy dividends (SGD5.5 cents per share for June FY14). We expect the company to be on the
lookout for other investment opportunities in the region.
Analyst: James Koh, +65 6232 3839
Previous Report: Parkson Retail Asia Results Review (NEUTRAL) - Outlook Remains Challeging (22 August 2014)
Other Stories
Vard Holdings (VARD SP, NEUTRAL, TP: SGD0.80)
Lower Oil Prices Hurting Deepwater Investment
Company Update
We turn more negative on Vard (VARD SP) as oil prices are likely to remain near the lower end of Saudi Arabia’s guidance, ie
discouraging deep water investments. Stay NEUTRAL, with 10x blended FY14F/FY15F P/E SGD0.80 TP, as we cut FY14-15
expected order wins to NOK12bn-11bn and dial margin assumptions down on a higher mix of new staff and lower-margin contracts.
These slash our EPS estimates by 15%/21%.
Analyst: Lee Yue Jer, CFA +65 6232 3898
Previous Report: Vard Holdings Results Review (NEUTRAL) - Long Road To Recovery (23 July 2014)
While you were sleeping
US Wrap: U.S. markets closed lower on Friday as the S&P 500 declined 1.15%, while the Dow Jones Industrial Average and
Nasdaq were down 0.69% and 2.33% respectively. According to the Labor Department, U.S. import prices declined 0.5% in
September, against economists’ forecast for a figure of 0.7%. Security software maker, Symantec, tumbled 6.4% to USD21.94 after
it mentioned that it plans to split itself into two separately traded companies. The U.S. 10-year Treasury bond is now yielding
2.28%, down 3 basis points.
See important disclosures at the end of this report
1
13 October 2014
Morning Matters
Chart: Singapore STI Index
Table: Singapore Market Indices
Value
1day
change
1day %
change
YTD %
change
3,400
3,250
Description
Market indices
Straits Times Index
3,224
(35.4)
-1.1%
1.8%
3,200
SG Midcap Index
746
(8.6)
-1.1%
3.4%
3,150
SG Small Cap Index
520
(6.4)
-1.2%
-4.1%
SG Catalist Index
830
(13.6)
-1.6%
-22.8%
222
(2.8)
-1.2%
-1.5%
3,350
3,300
3,100
3,050
3,000
Sector indices
2,950
2,900
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
SG China Index
SG Consumer Index
326
(2.0)
-0.6%
-32.4%
1,226
(19.2)
-1.5%
6.3%
1day
change
1day %
change
SG Healthcare Index
SG O&G Index
675
(14.4)
-2.1%
-12.7%
3,221
(36.0)
-1.1%
SG Real Estate Index
732
(7.6)
-1.0%
3.4%
Baltic Dry Index
963
(11.0)
-1.1%
SG REITs Index
749
(5.8)
-0.8%
4.9%
WTI crude (USD/bbl)
85
(1.1)
-1.3%
SG Technology Index
1,230
7.1
0.6%
437
(3.3)
-0.7%
14.7%
SG Telecom Index
985
(14.6)
-1.5%
1.8%
SG Utilities Index
471
(4.5)
-1.0%
0.6%
Description
STI Futures Oct14
Gold (USD/oz)
USD/EUR
Value
0.79
-0.13%
USD/JPN
107
0.38%
USD/SGD
1.27
0.22%
Analysing The News
COMPANY
NEWS
COMMENT
RATING
Sembcorp
Marine (SMM
SP)
Sembcorp Marine announced that its whollyowned subsidiary Jurong Shipyard Pte Ltd has
secured a USD696m contract to convert a
shuttle tanker into a floating, production,
storage and offloading (FPSO) vessel for
OOGTK Libra & Co KG.
We believe that the selling on Sembcorp
Marine is overdone and valuations are
looking attractive. Sembcorp is trading at 68x EV/EBITDA and 11-13x P/E for FY1416F. Positive surprises could arise from the
repair segment as well as rebounding
operating margins. Maintain BUY with
lowered SGD4.50TP.
BUY (TP:
SGD4.50)
Myanmar is one of the potentially sizable
consumer markets to emerge among
developing economies. With 50m people
and a growing middle class with disposable
income, the country offers significant
consumer opportunity for Yoma Strategic to
grow KFC over the long term. We do not
have a rating for this stock at the moment.
NON-RATED
This vessel is expected to be completed in
3Q16 and will have the capacity to produce
50,000 barrels of oil per day and 4m cubic feet
of natural gas per day. It will be chartered to
Petrobras for work on the Libra field.
Yoma Strategic
Holdings (YOMA
SP)
Yoma have announced that they are partnering
with Yum! Brands to bring the first KFC
restaurant to Myanmar in 2015. KFC is among
the first handful of quick service restaurants that
have plans to enter the Myanmar market.
13 October 2014
Morning Matters
Important Dates
COMPANY
New entitlements:
Lian Beng Group
Lian Beng Group
UMS Holdings
Tee Land
Cordlife Group
Guocoland Limited
Guocoleisure Limited
FJ Benjamin
Parkson Retail Asia
Olam International
Olam International
Eu Yan Sang
Silverlake Axis
Silverlake Axis
ENTITLEMENT DETAILS
Dividend SGD 0 01 ONE-TIER TAX
Dividend SGD 0 0125 ONE-TIER TAX
Dividend SGD 0 01 ONE-TIER TAX
Dividend SGD 0.0075 ONE-TIER TAX
Dividend SGD 0.01 ONE-TIER TAX
Dividend SGD 0.05 ONE-TIER TAX
Dividend SGD 0.02
Dividend SGD0.0025 ONE-TIER TAX
Dividend SGD0.025 ONE-TIER TAX
Dividend SGD0.05 ONE-TIER TAX
Dividend SGD0.025 ONE-TIER TAX
Dividend SGD0.022 ONE-TIER TAX
Dividend SGD0.012 ONE-TIER TAX
Dividend SGD0.006 ONE-TIER TAX
EX-DATE
30 Sep 14
30 Sep 14
7 Oct 14
9 Oct 14
21 Oct 14
24 Oct 14
28 Oct 14
28 Oct 14
3 Nov 14
4 Nov 14
4 Nov 14
4 Nov 14
7 Nov 14
7 Nov 14
Recent Stories
To access the following reports, please click on the link:
OSK|DMG: Morning Matters – Scoop of The Day: Singapore REITs Sector - 10 October 2014
Singapore REITS (OVERWEIGHT) - MAS Kickstarts Next Growth Engine For REITs – 10 October 2014
Sembcorp Marine (BUY) - Oversold On Drillship And Oil Price Jitters – 9 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: Keppel Corp - 9 October 2014
Keppel Corp (BUY) - Still Winning Orders Despite Market Concerns - 9 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: Petra Foods - 8 October 2014
Petra Foods (BUY) - Building a Strong Position - 7 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: CapitaLand - 7 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: Singapore Office Sector - 3 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: M1 - 2 October 2014
M1 (BUY) – Still ‘Appletizing’ - 2 October 2014
Singapore Banks (NEUTRAL) - Protests in HK May Dampen Sentiment On – 2 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: Hafary - 1 October 2014
Hafary Holdings (BUY) - Enhancing Abodes, One Tile At a Time – 1 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: Nam Cheong - 30 September 2014
Marco Polo Marine (BUY) - Wedding Bells And a Baby In 14 Months - 30 September 2014
Nam Cheong (BUY) - Record Sales Amidst Wedding Bells - 30 September 2014
OSK|DMG: Morning Matters – Scoop of The Day: Riverstone Holdings - 29 September 2014
Riverstone Holdings (BUY) - Capacity Set To Expand – 29 September 2014
Libra Group (BUY) - Loaded For Expansion – 29 September 2014
OSK|DMG: Morning Matters – Scoop of The Day: Lee Kim Tah - 26 September 2014
OSK|DMG: Morning Matters – Scoop of The Day: ValueMax - 25 September 2014
ValueMax Group (BUY) - New Value Driver In Motion – 24 September 2014
billion&below – Small Cap Weekly - 23 September 2014
OSK|DMG: Morning Matters - Scoop of The Day: Far East Hospitality Trust - 23 September 2014
OSK|DMG: Morning Matters - Scoop of The Day: Singapore Property - 22 September 2014
PAYMENT
16 Oct 14
16 Oct 14
28 Oct 14
3 Nov 14
7 Nov 14
18 Nov 14
17 Nov 14
19 Nov 14
13 Nov 14
13 Nov 14
13 Nov 14
21 Nov 14
27 Nov 14
27 Nov 14
13 October 2014
Morning Matters
Diary of Events
US Data
13-Oct-14
US Data
14-Oct-14
15-Oct-14
US Data
MBA Mortgage Applications (Oct 10)
16-Oct-14
US Data
Initial Jobless Claims (Oct 11)
Continuing Claims (Oct 4)
SG Data
SG Data
SG Data
SG Data
SG Data
SG Results
SPH REIT Y14
SG Results
SG Results
SPH Y14
SG Results
Ascendas REIT Q2 15
M1 Q3 14
Keppel REIT Q3 14
SG Results
CapitaCommercial Trust Q3 14
CapitaMall Trust Q3 14
Keppel Corp Q3 14
First REIT Q3 14
22-Oct-14
US Data
MBA Mortgage Applications (Oct 17)
23-Oct-14
US Data
Initial Jobless Claims (Oct 18)
Continuing Claims (Oct 11)
24-Oct-14
US Data
New Home Sales (Sep)
New Home Sales MOM (Sep)
20-Oct-14
21-Oct-14
17-Oct-14
US Data
US Data
US Data
SG Data
SG Data
SG Data
Automobile COE Open Bid Cat A (Oct 22)
Automobile COE Open Bid Cat B (Oct 22)
Automobile COE Open Bid Cat E (Oct 22)
SG Data
SG Data
SG Results
Frasers Commecial Trust Y14
Keppel Land Q3 14
SG Results
Hutchison Port Holdings Q3 14
Keppel Corp Q3 14
MapleTree Logistics Trust Q2 15
Mapletree Industrial Trust Q2 15
SGX Q1 15
SG Results
AIMS AMP Capital Q2 15
Sheng Siong Group Q3 14
SG Results
Cambridge Industrial Trust Q3 14
Cache Logistics Trust Q3 14
SG Results
GuocoLeisure Q1 15
GuocoLand A1 15
Wing Tai Holdings Q1 15
Ezra Holdings Y14
Suntec REIT Q3 14
Starhill Globnal REIT Q3 14
Frasers Centrepoint Y14
US Data
27-Oct-14
US Data
28-Oct-14
29-Oct-14
US Data
MBA Mortgage Applications (Oct 25)
30-Oct-14
US Data
Initial Jobless Claims (Oct 26)
Continuing Claims (Oct 19)
31-Oct-14
SG Data
SG Data
SG Data
SG Data
SG Data
SG Results
SG Results
Raffles Medical Group Q3 14
Healthway Medical Group Q3 14
OSIM International Q3 14
CDL Hospitality Trust Q3 14
SG Results
SG Results
Capitaland Q3 14
DBS Group Q3 14
OCBC Q3 14
MTQ Corp Q2 15
Eu Yan Sang Q1 15
Indofood Agri Resources Q3 14
UOB Q3 14
SG Results
SMRT Corp Q2 15
Jaya Holdings Q1 15
CapitaLand Q3 14
Hi-P International Q3 14
Gallant Venture Q3 14
Soilbuild Construction Q3 14
US Data
DMG & Partners Research Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
DISCLAIMERS
This research is issued by DMG & Partners Research Pte Ltd and it is for general distribution only It does not have any regard to the specific
investment objectives, financial situation and particular needs of any specific recipient of this research report You should independently evaluate
particular investments and consult an independent financial adviser before making any investments or entering into any transaction in relation to
any securities or investment instruments mentioned in this report
The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty
nor accept any responsibility or liability as to its accuracy, completeness or correctness Opinions and views expressed in this report are subject
to change without notice
This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities
DMG & Partners Research Pte Ltd is a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment
Bank Berhad, Malaysia which have since merged into RHB Investment Bank Berhad (the merged entity is referred to as “RHBIB” which in turn is
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Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited
DMG & Partners Securities Pte Ltd and their associates, directors, and/or employees may have positions in, and may effect transactions in the
securities covered in the report, and may also perform or seek to perform broking and other corporate finance related services for the
corporations whose securities are covered in the report This report is therefore classified as a non-independent report
As of the day before 13 October 2014, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd, do
not have proprietary positions in the subject companies, except for:
a) Nil
b) Nil
As of the day before 13 October 2014, none of the analysts who covered the stock in this report has an interest in the subject companies covered
in this report, except for:
Analyst
Company
a) Nil
b) Nil
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