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Strategy, 3015
December
October 2013
2014
Morning Matters – 15 October 2014
Trek 2000 International, Ezion Holdings, Lian Beng, Sembcorp Marine, Ezion Holdings
To access today’s reports, please click on the links below:
Ezion Holdings (BUY) - Oil Prices Hold No Fear For Ezion - 14 October 2014
Lian Beng (BUY) - Kicking Off FY15 With On a Strong Note – 14 October 2014
Sembcorp Marine (BUY) - Largest Contract YTD Worth USD696m – 14 October 2014
Trek 2000 (Initiating Coverage) - Trek’s Toy Story – 14 October 2014
Scoop of The Day
We initiate coverage on Trek (TREK SP) with BUY and a SGD0.61 TP, based on a 16x FY15F P/E which results in a 49% upside.
Trek has managed to boost its wireless Flucard sales on a big scale given its partnership with Mattel China. We expect orders to
surge in FY15, which could lead to revenue and NPAT rising by 40% and 267% CAGRs from FY13 to FY16F. We believe this has
been a long time coming for Trek, on top of positive drivers like consumer SSDs and its e-platform Cloud Stringers.
Analyst: Jarick Seet, +65 6232 3891
Other Stories
Ezion Holdings (EZI SP, BUY, TP: SGD2.45)
Oil Prices Hold No Fear For Ezion
Company Update
While Ezion’s (EZI SP) share price retreated 12% last month on oil price-related jitters, we maintain BUY with a SGD2.45 TP (from
SGD2.50), still a 52.2% upside. We reiterate that operations, backed by long-term contracts and oil majors’ opex, are well-insulated
from oil price fluctuations. With a larger operational fleet today, rig delays have had a smaller impact too. We think the market is not
pricing in its 41-58% growth over FY14F-15F.
Analyst: Lee Yue Jer, CFA, +65 6232 3898
Previous Report: Ezion Holdings (BUY) - Doubly Recession Proof Growth At Value Multiples (9 September 2014)
Lian Beng (LBG SP, BUY, TP: SGD1.17)
Kicking Off FY15 With On a Strong Note
Results Review
Lian Beng (LBG SP) reported a strong set of 1QFY15 (May) results, with revenue growing 10.8% y-o-y to SGD167.6m and PATMI
surging 58.5% y-o-y to SGD12.0m. The surge in profits is largely attributable to the recognition of profits from property development
projects amounting to SGD5.1m. Its construction orderbook remains strong at c.SGD1.0bn, providing visibility. We expect nearterm catalysts to aid in unlocking its value. Maintain BUY, with a SOP-based TP of SGD1.17 (85.5% upside).
Analyst: Sarah Wong, +65 6232 3883
Previous Report: Lian Beng : One-Off Boost From Sale Of Midlink Plaza (11 September 2014)
Sembcorp Marine (SMM SP, BUY, TP: SGD4.50)
Largest Contract YTD Worth USD696m
Company Update
SembMarine (SMM SP) has secured a USD696m contract to convert a shuttle tanker into an FPSO for OOGTK Libra GmbH & Co
KG, bringing YTD order wins to SGD3.66bn. Maintain BUY and SGD4.50 TP, implying a 23% upside, as we believe positive
surprises could arise from the repair segment as well as rebounding operating margins. At 6-8x EV/EBITDAs and 11-13x P/Es for
FY14F-16F, valuations are undemanding.
Analyst: Lee Yue Jer, CFA, +65 6232 3898
Previous Report: Sembcorp Marine (BUY) - Oversold On Drillship And Oil Price Jitters (9 October 2014)
While you were sleeping
US Wrap: U.S. markets closed mixed on Tuesday as the S&P 500 and Nasdaq added 0.16% and 0.32% respectively, while the
Dow Jones Industrial Average was down 0.04%. Semiconductor manufacturer Intel was the best performer within the DJIA Index
as it added 2.13% to USD32.14. The company reported third quarter earnings which exceeded analysts’ expectations. Following
Ebola panic within the airline operators sector on Monday, Delta Air Lines and Southwest Airlines recovered their losses during the
panic yesterday as both companies surged 6.1% and 3.9% respectively. The U.S. 10-year Treasury bond is now yielding 2.20%,
down 8 basis points.
See important disclosures at the end of this report
1
15 October 2014
Morning Matters
Chart: Singapore STI Index
Table: Singapore Market Indices
Value
1day
change
1day %
change
YTD %
change
0.9%
3,400
3,250
Description
Market indices
Straits Times Index
3,194
(7.8)
-0.2%
3,200
SG Midcap Index
740
(0.8)
-0.1%
2.6%
3,150
SG Small Cap Index
511
(2.3)
-0.4%
-5.7%
SG Catalist Index
805
(8.1)
-1.0%
-25.2%
3,350
3,300
3,100
3,050
3,000
2,950
Sector indices
2,900
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Description
Value
1day
change
STI Futures Oct14
3,192
(8.0)
Baltic Dry Index
948
WTI crude (USD/bbl)
Gold (USD/oz)
82
1,230
(6.0)
0.5
(2.5)
Oct-14
1day %
change
-0.3%
-0.6%
0.5%
-0.2%
USD/EUR
0.79
0.16%
USD/JPN
107
-0.16%
USD/SGD
1.28
-0.15%
SG China Index
219
0.0
0.0%
-2.5%
SG Consumer Index
324
1.9
0.6%
-32.7%
SG Healthcare Index
1,222
7.6
0.6%
6.0%
SG O&G Index
669
(1.8)
-0.3%
-13.4%
SG Real Estate Index
727
1.9
0.3%
2.8%
SG REITs Index
747
2.6
0.3%
4.6%
SG Technology Index
428
(5.7)
-1.3%
12.3%
SG Telecom Index
978
-
0.0%
1.1%
SG Utilities Index
454
(12.9)
-2.8%
-2.9%
Analysing The News
COMPANY
NEWS
COMMENT
RATING
Hotel Properties
(HPL SP)
HPL has entered into a 70:30 JV to purchase a
freehold property located at 31 London Street,
Paddington, in the UK for GBP111m. The
purchase is expected to be completed by the
end of the year. HPL and its JV partner intends
to, subject to planning permission, re-develop
the property. In the event that permission is
granted for re-development, the vendor, Royal
Mail Group, will be entitled to a further GBP20m
in consideration.
HPL has a diverse portfolio of hospitality
assets across Asia. The group is also
stepping up its investments in overseas
markets to further build up recurring income
and a development pipeline. HPL has the
highest concentration of prime, commercial
real estate in Orchard Road and we believe
that the group will look to redevelop its
ageing assets following a recent buyout
offer by its major shareholders. We believe
the stock is worth SGD6.00-8.00 under a
re-development scenario.
BUY (TP:
SGD6.00 SGD8.00)
15 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
Tee International
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
Dividend SGD0.005 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
10 Nov 14
Recent Stories
To access the following reports, please click on the link:
OSK|DMG: Morning Matters - Scoop of The Day: Lian Beng - 14 October 2014
OSK|DMG: Morning Matters - Scoop of The Day: Parkson Retail Asia - 13 October 2014
Vard Holdings (NEUTRAL) - Lower Oil Prices Hurting Deepwater Investments - 10 October 2014
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
27 Nov 14
15 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
Lian Beng Q1 15
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
MapleTree Logistics Trust Q2 15
SG Results
Hutchison Port Holdings Q3 14
Keppel Corp Q3 14
Mapletree Industrial Trust Q2 15
Suntec REIT Q3 14
SGX Q1 15
SG Results
AIMS AMP Capital Q2 15
Sheng Siong Group Q3 14
SG Results
Ascendas REIT Q2 15
Cambridge Industrial Trust Q3 14
Cache Logistics Trust Q3 14
Frasers Centrepoint Y14
SG Results
CapitaCommercial Trust Q3 14
Ezra Holdings Y14
GuocoLeisure Q1 15
GuocoLand Q1 15
Wing Tai Holdings Q1 15
Starhill Globnal REIT Q3 14
Tiger Airways Holdings Q2 15
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
Raffles Medical Group Q3 14
SG Results
CDL Hospitality Trust Q3 14
Healthway Medical Group Q3 14
OSIM International Q3 14
SG Results
SG Results
Eu Yan Sang Q1 15
Indofood Agri Resources Q3 14
MTQ Corp Q2 15
OCBC Q3 14
Parkway Life REIT Q3 14
UOB Q3 14
SG Results
CapitaLand Q3 14
DBS Group Q3 14
Gallant Venture Q3 14
Hi-P International Q3 14
Jaya Holdings Q1 15
SMRT Corp Q2 15
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
a wholly-owned subsidiary of RHB Capital Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group) DMG &
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 15 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 15 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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