MORNING BUZZ 10 March 2015
Market Indicators 5‐Mar
6‐Mar
9‐Mar
Mkt. T/O (S$ mil) 1,216.1
Market Colour 938.3
1,130.7
Stock Advances 189
237
164
The STI continued its downward momentum yesterday to reach 3404.6, down 12.9 Stock Declines 282
248
338
points. Post ex‐dividends of 0.7c, Noble (S$1.00; ‐5.2%) surrendered last Friday’s gains to close at a dollar. Other notable losers included blue‐chip stocks such as Major Indices DJ Ind Avg 18,135.7
S & P 500 2,101.0
Nasdaq Comp 4,982.8
Hang Seng 24,193.0
17,856.8 17,995.7
2,071.3
2,079.4
4,927.4 4,942.4
24,164.0 24,123.1
CapitaLand (S$3.46; ‐2.3%) and SingTel (S$4.11; ‐1.7%), though Genting (S$0.960; +3.8%) recovered some of its losses after several sessions of selling. As we had anticipated post the strong US data, the REIT space saw profit taking and retreated ‐1.2% on average across the board. As the closing date of Keppel Corp’s offer for Keppel Land (S$4.52; unch) draws near, the potential downside may outweigh the STI Index upside if Keppel Land does not manage to get privatized at S$4.60. 3,404.57 (‐0.38%) On the US equity market front, the markets pared some of last Friday’s losses to edge up slightly. Demand for gold continued to slide as each ounce traded at US$1167, down 5.4% for the month. We note that the currencies of several emerging markets have been declining as the dollar marches on, and we will Source: Bloomberg continue to keep watch on the stocks with such exposure. Commodities
Coverage Updates Current % Chge from Price Close Gold (SPOT) US$ / OZ Oil (NYMEX CWTI|) US$ / bbl Baltic Dry Index 1,167.10
‐0.61% 49.95
0.24% 568.00
0.53% 
Serrano (SERR SP; NOT RATED): An interior fit‐out specialist – Page 3 Stocks to Watch Exchange Rates 
GSH Corporation: Consortium launch sale of strata office units 
Triyards Holdings: Grows orderbook with deals worth US$100 million 
Yongnam Holdings: Win S$159 million tender for JTC Food Hub @ Senoko USD : SGD 1.3811 / MYR : SGD 0.3755 Source: Bloomberg Interest Rates 3‐mth Sibor 0.836%
SGS (10 yr) 2.395%
KGI Fraser Research Team KGI Fraser Securities Pte. Ltd. Please see important disclosures at the end of this publication MORNING BUZZ

GSH Corporation (GSH SP): Consortium launch sale of strata office units GSH Corporation‐led consortium, which includes TYJ Group Pte Ltd (an investment vehicle of the Group’s Executive Chairman Mr. Sam Goi), and Vibrant DB2 Pte Ltd (an investment vehicle of Vibrant Group Limited and DB2 Group), to launch sale of more than 100 strata office units at GSH Plaza. It available for sale from end of March 2015 for between S$2,850 to S$3,500 per square foot. Triyards Holdings (ETL SP): Grows orderbook with deals worth US$100 million Triyards Holdings said it has secured deals for two ice‐class Multi‐Purpose Support Vessels (MPSVs) as well as a turret fabrication job worth over US$100mil ($138mil). Contract wins extend Group's earnings visibility beyond FY16. KGI’s take: This orders to provide upside catalyst to the stock. We note that Triyards’ stock price Yongnam Engineering & Construction Pte. Ltd., a wholly‐owned subsidiary of order win will help visibility for its yards but we are looking at more liftboat has been closely correlated to Ezion’s over the past few weeks. Yongnam Holdings (YNH SP): Win S$159 million tender for JTC Food Hub @ Senoko Yongnam Holdings Ltd, has formed a 51%:49% joint venture with Jian Huang Construction Co. Pte Ltd, and the joint venture has secured a S$159mil contract for the JTC Food Hub @ Senoko. This project will see the JV undertake the building and development of a new seven‐storey ramp‐up development in the Senoko Food Zone. Source: The Business Times / Bloomberg / Straits Times KGI Fraser Securities Pte. Ltd. 2
COMPANY UPDATE
Serrano Limited Singapore Monday, 24 October 2011
( SERR SP; SERR.SI ) Not Rated
Pri ce a s of 2 Ma r 2015
0.210
12M ta rget pri ce (S$)
‐
Previ ous ta rget pri ce (S$)
‐
Ups i de (%)
‐
Trading data
Ma rket Ca p (S$m)
31.5
Is s ued Sha res (m)
150.0
Ave Da i l y Tra ded (3‐Month) Vol / Va l 0.0m / S$0.0m
52 week l o / hi
S$0.20 / S$0.25
Free Fl oa t
30.9%
Major Shareholders
Wa h Heng Des i gn Corp
37.1%
Wi ns ton Chi a
13.1%
12‐Mth SERR SP (Blue) vs. FSSTI
3,500
0.28
3,400
0.26
Source: Bloomberg Renfred TAY
[email protected] +65 6236 2557 Feb‐15
0.18
Jan‐15
0.20
3,000
Dec‐14
0.22
3,100
Nov‐14
0.24
3,200
Oct‐14
3,300
An interior fit‐out specialist
We met up with the management of Serrano (listed on the catalist board
in October 2014) recently to gain further understanding about its business
and its growth plans. Serrano is one of Singapore’s leading provider of
interior fit‐out solu ons for the residen al, hospitality, retail and
commercial sectors in Singapore and across Southeast Asia. They also
make and supply a range of furnishings including modular kitchen systems
and oﬃce systems under its “Wholesale and Retail Furnishings” business.
Landmark projects around the region. Serrano has a solid interior fit‐out delivery track record throughout the region. The interior fit‐out business focuses on manufacturing and installing home furnishing solu ons such as doors and doorframes, kitchen cabinets, wardrobes and vanity cabinets. Some of its landmark fit‐out projects in Singapore include, D’leedon, The Interlace, Reflec ons at Keppel Bay, ICON @ Tanjong Pagar, Ritz Carlton Residences, Somerset Serviced Residence, and the Youth Olympic Village at NTU. Notable projects overseas also include, Traders Hotel and the Star City Thanlyin township development (phase 1) in Yangon, The River and The Met condominiums in Bangkok and the Estella condominium in Ho Chi Minh City. Modular design of paneling products. One of the key advantage Serrano has, for its interior fit‐out business, is its ability to break down the design of the final paneling products into modular parts. These parts can be economically and eﬃciently produced in large quan es at its Vietnam factory and be flat‐packed and shipped to project sites to be installed. Such a system should augment Serrano’s capabili es in terms of turnaround me, economies of scale and cost savings, which should allow them to undertake large scale fit‐out projects and make compe ve bids. Growth plans. Serrano’s new lis ng status should help increase its ability to win big projects. As of 1 Dec 2014, Serrano has an outstanding order book of S$93.4m (see figure 4) that extends to 2018. Serrano is also looking to increase its overseas revenue streams in countries such as Myanmar, Thailand, Cambodia and Vietnam by leveraging on its track record in Singapore. It is also ready to explore M&A op ons that could add synergies to its exis ng business. Financials and current trading valua on. Serrano’s revenue has been growing at a CAGR of 10% between FY11‐FY14. Revenue for FY14 was S$85.2m (+3% yoy). Excluding IPO and restructuring expenses (~S$2m), FY14 net profit was S$3.4m (+4.5% yoy). Of its announced order book of S$93.4m marked on 31 Dec 2014, 19 out of 26 projects are expected to be handed over in 2015. Based on a simplis c back‐of‐the‐envelope calcula on, we es mate that Serrano could see revenue of S$70.6m from its interior fit‐out business in 2015 (see figure 5 for calcula ons). Serrano is currently trading at 2014 P/E of 9.4x and 2014 EV/EBITDA of 9.8x, excluding IPO and restructuring expenses. Please see important disclosures at the end of this publica on
MORNING BUZZ
Apendix 1: Corporate Action Dividends
Company
Results Period
Ann Date
DPS
Ex‐Date
Book Close
Payable
Share Price Yield 9‐Mar‐15
(%)
Ri ckmers Ma ri ti me
26‐Feb‐15 FY14 USD 0.006000
10‐Mar‐15
12‐Ma r‐15
27‐Ma r‐15 SGD
0.290
2.9
As i an Pa y Tel evi s i on Trus t
24‐Feb‐15 FY14 SGD 0.021300
18‐Mar‐15
20‐Ma r‐15
27‐Ma r‐15 SGD
0.935
2.3
Da i ry Fa rm Int'l Hl dgs 5‐Ma r‐15 FY14 USD 0.165000
18‐Mar‐15
20‐Ma r‐15
13‐May‐15 USD
9.530
1.7
Hongkong La nd Hl dgs 5‐Ma r‐15 FY14 USD 0.130000
18‐Mar‐15
20‐Ma r‐15
13‐Ma y‐15 USD
7.830
1.7
Ja rdi ne Ma thes on Hl dgs 5‐Ma r‐15 FY14 USD 1.070000
18‐Mar‐15
20‐Ma r‐15
13‐Ma y‐15 USD 65.820
1.6
Ja rdi ne Stra tegi c Hl dgs 5‐Ma r‐15 FY14 USD 0.190000
18‐Mar‐15
20‐Ma r‐15
13‐Ma y‐15 USD 35.400
0.5
Ma nda ri n Ori enta l Int'l 6‐Ma r‐15 FY14 USD 0.050000
18‐Mar‐15
20‐Ma r‐15
13‐Ma y‐15 USD
1.665
3.0
M1
19‐Ja n‐15 FY14 SGD 0.119000
17‐Apr‐15
21‐Apr‐15
30‐Apr‐15 SGD
3.920
3.0
Grea t Ea s tern Hl dgs 6‐Feb‐15 FY14 SGD 0.400000
21‐Apr‐15
23‐Apr‐15
7‐Ma y‐15 SGD 25.000
1.6
Grea t Ea s tern Hl dgs ‐ Speci a l
6‐Feb‐15 FY14 SGD 0.050000
21‐Apr‐15
23‐Apr‐15
7‐Ma y‐15 SGD 25.000
0.2
Keppel Corp 23‐Ja n‐15 FY14 SGD 0.360000
22‐Apr‐15
24‐Apr‐15
6‐Ma y‐15 SGD
8.750
4.1
Keppel Tel ecoms & Tpt
20‐Ja n‐15 FY14 SGD 0.035000
22‐Apr‐15
24‐Apr‐15
5‐Ma y‐15 SGD
1.775
2.0
Keppel Tel ecoms & Tpt ‐ Speci a l
20‐Ja n‐15 FY14 SGD 0.115000
22‐Apr‐15
24‐Apr‐15
5‐Ma y‐15 SGD
1.775
6.5
Ex‐Date
Book Close
Rights & Bonus Issues
Company
Rights Issue
Chi na Fi s hery Group
4 Rts Sha res @ S$0.173 ea ch Rts s ha re for every 5 exi s ti ng s ha res hel d
31‐Mar‐15
La s s eters Interna ti ona l Hl dgs
1 Ri ghts Sha re @ S$0.06 ea ch Ri ghts Sha re for every 1 exi s ti ng Sha res hel d
23‐Feb‐15
Rights Trading Period
From
To
2‐Apr‐15
8‐Apr‐15
16‐Apr‐15
25‐Feb‐15
2‐Mar‐15
10‐Mar‐15
Source: SGX Annoucement
Buyout
Company
Offer Price
Remarks
Closing Date
Offeror
euNetworks Group SGD 1.16
Ca s h
5.30 p.m. on 13 Ma r 2015
EUN Hol di ngs , LLP
Keppel Land *
SGD 4.38
Ca s h
5.30 p.m. on 12 Ma r 2015
Keppel Corpora ti on
LCD Gl oba l Inves tments Ltd
SGD 0.33
Ca s h
5.30 p.m. on 12 Ma r 2015
AF Gl oba l Pte. Ltd.
Popul a r Hl dgs
SGD 0.32
Ca s h
5.30 p.m. on 18 Ma r 2015
Gra nd Apex Hol di ngs Pte. Ltd.
Source: SGX Annoucement
Keppel Land: A Base Offer Price of SGD 4.38 in cash for each Offer Share. A higher Offer Price of SGD 4.60 in cash, if KCL is able to reach the
Compulsory Acquisition Threshold.
KGI Fraser Securities Pte. Ltd. MORNING BUZZ
Apendix 2: Financial Calendar Monday
Tuesday
Wednesday
9‐Mar
Thursday
10‐Mar
11‐Mar
Friday
12‐Mar
13‐Mar
*Q3: Novo Grp
Q3: Del Monte Pacific
*Q4: Sound Global (Released on Sun, 15‐
Mar)
16‐Mar
17‐Mar
18‐Mar
SG: Prices of Private Residential Units Sold by Developers
19‐Mar
*Q4: Lung Kee Bermuda
*Q4: TPV Technology
23‐Mar
24‐Mar
25‐Mar
20‐Mar
26‐Mar
27‐Mar
SG (Feb 2015): Index of Industrial Production SG (Feb 2015): CPI
30‐Mar
Q2: Second Chance Properties
1‐Apr‐15
31‐Mar
2‐Apr
3‐Apr
Q4: China Sky Chemical
Good Friday
6‐Apr
7‐Apr
8‐Apr
*Q2: EMAS Offshore
* Tentative
Source: Company; Bloomberg
KGI Fraser Securities Pte. Ltd. 9‐Apr
10‐Apr
MORNING BUZZ
Disclaimer This report is provided for information only and is not an offer or a solicitation to deal in securities or to enter into any legal relations, nor an advice or a recommendation with respect to such securities. This report is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation and the particular needs of any recipient hereof. You should independently evaluate particular investments and consult an independent financial adviser before dealing in any securities mentioned in this report. This report is confidential. This report may not be published, circulated, reproduced or distributed and/or redistributed in whole or in part by any recipient of this report to any other person without the prior written consent of KGI Fraser. This report is not intended for distribution and/or redistribution, publication to or use by any person in any jurisdiction outside Singapore or any other jurisdiction as KGI Fraser may determine in its absolute discretion, where the distribution, publication or use of this report would be contrary to applicable law or would subject KGI Fraser and its connected persons (as defined in the Financial Advisers Act, Chapter 110 of Singapore) to any registration, licensing or other requirements within such jurisdiction. The information or views in the report (“Information”) has been obtained or derived from sources believed by KGI Fraser to be reliable. However, KGI Fraser makes no representation as to the accuracy or completeness of such sources or the Information and KGI Fraser accepts no liability whatsoever for any loss or damage arising from the use of or reliance on the Information. KGI Fraser and its connected persons may have issued other reports expressing views different from the Information and all views expressed in all reports of KGI Fraser and its connected persons are subject to change without notice. KGI Fraser reserves the right to act upon or use the Information at any time, including before its publication herein. Except as otherwise indicated below, (1) KGI Fraser, its connected persons and its officers, employees and representatives may, to the extent permitted by law, transact with, perform or provide broking, underwriting, corporate finance‐related or other services for or solicit business from, the subject corporation(s) referred to in this report; (2) KGI Fraser, its connected persons and its officers, employees and representatives may also, to the extent permitted by law, transact with, perform or provide broking or other services for or solicit business from, other persons in respect of dealings in the securities referred to in this report or other investments related thereto; and (3) the officers, employees and representatives of KGI Fraser may also serve on the board of directors or in trustee positions with the subject corporation(s) referred to in this report. (All of the foregoing is hereafter referred to as the “Subject Business”.) However, as of the date of this report, neither KGI Fraser nor its representative(s) who produced this report (each a “research analyst”), has any proprietary position or material interest in, and KGI Fraser does not make any market in, the securities which are recommended in this report. Each research analyst of KGI Fraser who produced this report hereby certifies that (1) the views expressed in this report accurately reflect his/her personal views about all of the subject corporation(s) and securities in this report; (2) the report was produced independently by him/her; (3) he/she does not carry out, whether for himself/herself or on behalf of KGI Fraser or any other person, any of the Subject Business involving any of the subject corporation(s) or securities referred to in this report; and (4) he/she has not received and will not receive any compensation that is directly or indirectly related or linked to the recommendations or views expressed in this report or to any sales, trading, dealing or corporate finance advisory services or transaction in respect of the securities in this report. However, the compensation received by each such research analyst is based upon various factors, including KGI Fraser’s total revenues, a portion of which are generated from KGI Fraser’s business of dealing in securities. Copyright 2015. KGI Fraser Securities Pte. Ltd. All rights reserved.
KGI Fraser Securities Pte. Ltd.