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The Edge - Brokers' Digest (Oct 15 - Oct 21, 2007) Post Reply Rate topic
froggie08 Member	14-Oct-2007 20:21        froggie08 About Contact  Quote this Post!
x 0   x 0  Alert Admin	How to apply for KimEng clients? Any contact ?
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singaporegal Supreme	14-Oct-2007 19:12        singaporegal About Contact  Quote this Post! Style: Technical   Mood: Yells: "Female TA nut"
x 0   x 0  Alert Admin	Analyst reports are useful but I have learned to take their advice with a pinch of salt. It is often more important to do your own research and make your own decisions.
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limhpp Veteran	14-Oct-2007 14:32        limhpp About Contact  Quote this Post!
x 0   x 0  Alert Admin	$1.00 per issue for a year supply for KimEng clients.
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DnApeh Master	14-Oct-2007 14:12        DnApeh About Contact  Quote this Post!
x 0   x 0  Alert Admin	Do note that the market data for this issue was based on Thursday's close.
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oldtimer Member	13-Oct-2007 22:00        oldtimer About Contact  Quote this Post!
x 0   x 0  Alert Admin	$3 per issue at newstand....or $1.50 per issue for a year supply...
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pikachu Veteran	13-Oct-2007 19:24        pikachu About Contact  Quote this Post!   Mood: Yells: "Holy Cow!"
x 0   x 0  Alert Admin	Useful info. The Edge is from malaysia right? How much to subscribe?
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smltimer Senior	13-Oct-2007 12:10        smltimer About Contact  Quote this Post! Style: Technical   Mood: Yells: "So what does the crystal ball say ......."
x 0   x 0  Alert Admin	decarn......i have heard about the Edge magazine......wonder how do i subscribe. thanx
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decarn Member	13-Oct-2007 10:12        decarn About Contact  Quote this Post!
x 0   x 0  Alert Admin	Allco Commercial REIT (Oct 10: $1.14) TP: $1.65 MAINTAIN BUY. Allco has announced the acquisition of KeyPoint, a commercial asset located at the junction of Beach Road for $370 million. Based on the acquisition price, the asset is acquired at a net property income yield of 4.65%, with an income support of $10.5 million for a period of two years. Despite increasing its portfolio by 119% (excluding upward revaluations) since listing through third-party acquisitions, Allco continues to trade at a steep discount of 25% to book value, one of the cheapest SREITs offering an attractive yield of 6.3 %. Target price of $1.65 backed by DCF valuation. - DBS Vickers Securities (Oct 8) Lian Beng Group (Oct 10: 59 cents) TP: 89 cents MAINTAIN OUTPERFORM. Lian Beng Group (LBG) announced that it had clinched a $200 million construction contract to build 600 condominium units at Simon Road. This 189,811 sq ft URA site was awarded to newcomer developer, Duke Development Pte Ltd, on Oct 3 for $290 million or $437 psf per plot ratio. LBG's order book now stands at $575 million. We are upgrading our FY2008-2010 earnings estimates by 12 % -29 %. We expect FY2008 net profit to expand 232% y-o-y from $4.4 million to $15.5 million, driven mainly by its order book, margin expansion, property development profit recognition and new IR contracts. We maintain our target basis of 15 times CY2008 PE. Target price of 89 cents. - CIMB-GK Research (Oct 9) Tsit Wing Int'l Holdings (Oct 10: 28 cents) TP: 30.5 cents BUY (resuming coverage). Tsit Wing Int'l Holdings (TWI) has sought to grow via the Chinese market. We project revenue from TWI's China segment to grow by 60% for FY2007 and FY2008. TWI offers price stability with decent dividend yields. The stock has been hovering between 24.5 cents and 30.5 cents over the past year. We expect TWI to maintain a dividend payout ratio of 60 % for FY2007 (implying a dividend yield of 8.1 %) and still enjoy a comfortable net cash position for its expansion plans in China. Fair value estimate of 30.5 cents, based on eight times blended FY2007/2008 PER (or a 12 % potential upside from current price). - OCBC Investment Research (Oct 9) Asia Environment Holdings (Oct 10: 76.5 cents) TP: $1.06 UPGRADE TO BUY. Asia Environment (AENV) recorded a 7% increase in revenue to 150.8 million renminbi ($29.42 million) in 1H2007. The management attributed this growth to the increase in build-operate-transfer (BOT) projects and the sales of equipment, which amounted to 5.5 million renminbi and 3.6 million renminbi, respectively. Gross profit increased by 9 % to 51.2 million renminbi in 1H2007 while gross profit margin improved slightly to 34 %. Net profit rose smartly by 22.1 % from 22 million renminbi to 26.9 million renminbi in the same period. At 77 cents, the counter is now trading at 13 times FY2008 forecasted earnings. We are pegging our target price at 18 times FY2008F earnings, which would give us $1.06. - SIAS Research (Oct 8) MacarthurCook Industrial REIT (Oct 10: $1.21) TP: $1.39 MAINTAIN BUY. MacarthurCook Industrial REIT (MIREIT) announces its third acquisition since its IPO, bringing the total value of announced acquisitions to $126.1 million. MI-REIT completed the acquisition of 541 Yishun Industrial Park A on Oct 4. With an acquisition target of $500 million annually, we believe there will be more announcements coming up. We revise our revenue to factor in the contributions from the latest acquisition. Our forecasted distribution per unit increases to 7.48 cents for FY2008 and 7.96 cents for FY2009, translating to a yield of 6.33 % and 6.74 %. Our fair value remains at $1.39, derived from our DCF model. - Phillip Securities Research (Oct 5) Unisteel Technology (Oct 10: $1.99) TP: $2.42 UPGRADE TO BUY. Unisteel Technology has benefitted from an uptrend in seasonal demand. Its HDD segment is expected to see a strong recovery in 2H2007. Revenue contribution from its new acquisition, JC Metal, and a wider adoption of Uni-Lube coating will improve its margin in 2H2007. In fact, capacity utilisation at Unisteel for HDD fasteners improved from 70% in 2Q2007 to 90 % -95 % in 3Q2007. JC Metal's total revenue is expected to top $70 million in FY2007, and its FY2007 revenue contribution to Unisteel is estimated at $27 million as JC Metal will only contribute five months of revenue. Our target price is $2.42, or 2008 PE of 15 times. - UOB KayHian (Oct 5) China Sky Chemical Fibre (Oct 10: $2.48) TP: $3 MAINTAIN BUY. We recently visited China Sky Chemical Fibre (CSCF)'s plant in Quanzhou and noted a few developments one being the strong expected demand for super-resilient (SR) nylon fibre. An acquisition deal could be inked by year-end after the ironing out of issues that dragged negotiations. CSCF has started processing pre-oriented yarn into air-textured yarn and drawn-textured yarn for customers since June. Rolling forward our valuation to FY2008 earnings, our fair value is raised to $3 (potential upside of 20 %) on sector average forward PE of 15 times. Strong earnings contribution expected from the new SR products in 2Q2008 and strengthening of market leadership position through M&A justify the enhanced valuation. - NRA Capital (Oct 9) Sing Holdings (Oct 10: $1.17) TP: $1.64 BUY (initiating coverage). Sing Holdings is a boutique developer with more than 40 years' experience in the Singapore property market. The company has a landbank of about. 500,000 sq ft in gross floor area, which is capable of being developed into mid to high-end residential developments. Sing Holdings may be relatively small, but it has established a good standing with a number of illustrious names. The proposed sale of EastGate is expected to generate proceeds of about $60 million. Target price of $1.64, representing a potential upside of 56%. We think that the company is undervalued (FY2008 PER of 3.5 times), despite its proven track record of delivering quality products and exciting prospects. - Kim Eng Research (Oct 4) United Overseas Bank (Oct 10: $22.30) TP: $27.50 MAINTAIN BUY. We like United Overseas Bank (UOB) for its domestic exposure, especially in the housing loan market complemented by its diversified regional presence. We believe that UOB is poised to deliver sustainable earnings from stronger loan growth. Positive surprises could arise from its regional network, especially in Thailand. We estimate 3Q2007 net profit to grow by at least 20 % y-o-y. Non-interest income to remain strong for FY2007, built up from 1H2007. We expect UOB to pay total (gross) DPS of 80 cents, of which 35 cents was paid during 2Q2007. Target price of $27.50 based on the Gordon Growth Model. This yields an implied 2.1 times FY2008 adjusted book value, based on peak valuations. - DBS Vickers Securities (Oct 5) CSE Global (Oct 10: $1.31) TP: $1.60 MAINTAIN BUY. According to E-Health Insider (EHI), the Fujitsu Cerner Module has been disappointing and implementation has been plagued by delays. This raises the prospect that CSE can benefit from Fujitsu's failure to deliver its obligation on schedule for the Southern cluster. A contract re-negotiation is positive for CSE. EHI reported that several trusts in the Southern cluster are in favour of adopting CSE's RiO solution. At $1.29, CSE is currently trading at around 13 times 2008E PE, with our target price of $1.60 representing an expected total return of 27 %. New contract wins from the Southern cluster as well as the oil and gas sector could add upside surprises to our 2008E forecasts. - Citigroup Research (Oct 5) SSH Corp (Oct 10: 40 cents) TP: 60 cents BUY. SSH trades in and distributes more than 15,000 line items such as stainless steel, steel pipes and top-quality valves to the marine, petrochemical, infrastructure and oil and gas sectors. In January last year, SSH established a new business unit to supply steel plates and structural steel tubular pipes to the oil and gas industry. The order book currently stands at $38 million, with deliveries in May 2008. We believe that SSH's sizeable contract win worth $80 million from Shell Houdini would open up numerous potential business opportunities, including ExxonMobil's cracker. Our target price of 60 cents is based on 15 times PER FY2007/2008F blended earnings. - OCBC Investment Research (Oct 8) Valuetronics Holdings (Oct 10: 30.5 cents) TP: 47 cents MAINTAIN OUTPERFORM. The company is on track to report record quarterly earnings next month. Order flow from major customers remains good, with the exception, of KitchenAid. Business momentum is coming from a combination of organic growth and new programme wins. Valuetronics has also been securing new customers, though contributions remain small. We have kept our FY2008FY2010 net profit forecasts intact. At 2.4 times EV/EBITDA, the stock remains cheap against its competitors, and offers a yield of 6 %. Our target price of 47 cents conservatively pegs the stock at a low eight times CY2008 PE, despite its high ROES and strong balance sheet to account for its small size and lack of a listing track record. - CIMB-GK Research (Oct 9) HTL Intl Holdings (Oct 10: 84 cents) TP: 47 cents MAINTAIN SELL. 2Q2007 gross margins hit its lowest for more than two years, dropping below the 30 % mark for the. first time since 3Q2004. The margins were largely affected by the increase in raw leather hides prices, exacerbated by a 5 % reduction in the China export VAT refund rate. On the macro front, subprime woes will likely affect the US housing market and demand for furniture goods. At the company level, it continues to face an uphill struggle to maintain margins. We have further downgraded our earnings by just 30% to factor in increases in raw material prices and freight costs. Keeping our eight times FY2008 PE valuation, our new target price is 47 cents. - CLSA Asia-Pacific Markets (Oct 5) StarHub (Oct 10: $3.10) TP: $3.64 MAINTAIN OUTPERFORM. Singapore's population boom (+4.4% y-o-y) on immigration influx and wage growth ( + 8 % y-o-y) helped drive Singapore's mobile and broadband penetration rates to 113 % and 75 %, respectively, in July. We reiterate our view that StarHub offers the best exposure to Singapore's telco services consumption growth story. We reiterate our view that consensus is due to upgrade its 5.6% CY2008 yield expectations towards our expectation of a 10% yield. Upgrading target price to $3.64 as we roll forward our DCF valuation (WACC: 6.9 %, terminal growth: 1 %) to CY2008 basis. Starhub is our preferred Singapore telco pick over the next 12 months. - CIMB-GK Research (Oct 5) Yangzijiang Shipbuilding Holdings (Oct 10: $2.61) TP: $3.04 BUY (initiating coverage). Yangzijiang is the largest private containership builder in China and among the Top 10 in the world. Backed by a record order book of 35.8 billion renminbi (or $6.97 billion), representing nine times its FY2007 revenue, this underpins earnings visibility till FY2010. Yangzijiang's FY2009 earnings will capture the full impact of the new shipyard. The recent re-rating of regional shipyards, led to a doubling of PE to 24 times on FY2008 earnings. We have imputed a target PE of 28 times on FY2009 earnings for Yangzijiang, which is in line with the industry average of Singapore and China-listed peers. This will give rise to a 12-month forward valuation of $3.04. - DBS Vickers Securities (Oct 8) Copyright Disclaimer Read More...
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