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THE EDGE ISSUE - JUL 23 - JUL 29, 2007
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evideo
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26-Jul-2007 05:51
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The Edge - Brokers' Digest (July 23 - July 29, 2007)
Courtesy: http://my-personal-finance.blogspot.com/ Bukit Sembawang Estates (July 19: $12.70) TP: $16.41 MAINTAIN OUTPERFORM. Traditionally known as a mid-range developer., BSE recently shifted its focus to hig-end projects. Since July 2005, it has acquired eight freehold sites with a total GFA (gross floor area) of 982,898 sg ft, with most located in prime locations. We believe gross margins for upcoming launches could be high, at 40% to 60%. We have rolled over our revised NAV (RNAV) estimate to CY2008 from CY2007, to better reflect earnings streams from its residential development projects. Accordingly, our target price has been lifted from $14.36 to $16.41, with upside of 23%. - CIMB-GK (July 16) SembCorp Industries (July 19: $5.65) TP: $7.50 MAINTAIN BUY. There was a good turnout for SCI's corporate presentation during our Pulse of Asia conference on July 11 with management focusing on growth drivers for both utilities and marine. In addition, SCI's RNAV will benefit from our recent upgrade in subsidiary SMM (SembCorp Marine)'s target price from $5 to $7.90. Besides organic growth, utilities will see growth coming from new beachheads, developing greenfield and acquiring brownfield projects and new M&A opportunities. Marine's earnings will be underpinned by its $9.1 billion order book, with visibility starting to extend into 2010. Our target price has been raised to $7.50. Management has also highlighted that its dividend payout policy can comfortably be 50% to 60%. - DBS Vickers Securities (July 18 ) Synear Food Holdings (July 19: $1.92) TP: $2.42 BUY (initiating coverage). Synear Food is China's leading quick-freeze food producer, with strength in savory and sweet dumplings. With the last three years' net profit CAGR growing at 82%, Synear has been one of S-Chip's leading success story. We expect 2006 to 2011 five-year EPS CAGR to grow at 20%, through new product initiatives and expansion into second-tier cities, riding on the growing per-capita consumption of frozen processed food in China. We value the company with a target price of $2.42 based on 25x 2008 PER, which equals 1x PEG 2007 to 2009 CAGR, with 27% upside. Synear is one of the higher-quality S-Chip companies with a strong brand name, and deserves to trade at similar levels to its Hong Kong-listed peer. - CLSA Asia-Pacific Markets (July 16) Epure Int'l (July 19: $2.24) TP: $2.64 MAINTAIN BUY. Epure has placed 30 million new shares (7.5% of the existing share capital) and 21.4 million old shares (5.4%) at $2.16 each. The placement price was at a 9.6% discount to the last closing price before suspension. The 328 million renminbi ($65.6 million) raised would largely be sued to acquire environmental equipment firms and construction project management companies. The share price of Epure has risen only 5% in the past month, clearly a laggard in the sector. To reflect strong order book momentum, we have raised our FY2008-09 revenue forecasts by 2%. We expect fully diluted EPS to surge 36% in FY2008. Based on a higher PEG of 1.5x,in line with the sector average, we raised our target price to $2.64. - Citigroup Research (July 13) SNP Corp (July 19: $1.06) TP: $1.26 MAINTAIN BUY. SNP's 1H2007 net profit grew 39% y-o-y to $18.2 million, boosted by a $10.8 million net gain from the disposal of an office property in Hong Kong. Net gearing improved to 1.15x in 1H2007. We are maintaining our 2007 and 2008 net profit forecasts. Apart from a recovery in pop-up printing, additional capacity from its Shanghai plant will also help to drive growth. The group has captured more than 50% market share in colour-magazine printing in China. Our 12-month target price of $1.26 is derived based on the DCF method and includes the projected net dividend per share of four cents. - Standard & Poor's Research (July 18) United Engineers (July 19: $4.10) TP: $5.10 BUY (initiating coverage).UEL is the largest homegrown builder, with a market capitalization of more than $900 million. UEL is currently developing a mixed development project in Buona Vista, Singapore, which was awarded by JTC in 2005. We are optimistic about the company's growth, particularly on the Vista Xchange mixed development and its expansion plan into China's wastewater-treatment business. Based on RNAV valuation, we arrive at a fair value of $5.10 per share, which represents an upside of 22% from its previous close. Our estimates show that its forward PER is 23.8x and 16.6x for FY2007 and Fy2008 respectively. - Phillip Securities Research (July 18 ) Rotary Engineering (July 19: $1.35) TP: $1.57 MAINTAIN BUY. Rotary Engineering recently secured another $150 million worth of orders in Singapore and Indonesia, significantly raising Rotary's order book to $701 million and suggesting that the order momentum continues to be robust. We have consequently upgraded our EPS between 8% and 9% for FY2008-09. The landmark project will be used as a reference to secure other higher-value order, particularly in the Middle East. We rate Rotary as one of the better proxies to the region and Singapore's increasing refinery/oil terminal capex cycle. We have raised our target price to $1.57 from $1.30. We believe the stock deserves a minimum ex-cash multiple of 17.5x 2007 PER (based on 0.8x PEG). - Kim Eng Research (July 17) STX Pan Ocean Co (July 19: $2.33) TP: $3 BUY (initiating coverage). STX Pan Ocean is primarily involved in dry bulk shipping. About 88% of STX's revenue comes from the bulk business. With its bulk fleet of 267 across different sizes, including charter-in vessels, it has one of the largest, most diversified operating fleets. We think the market may have under-anticipated the pace of demand growth, so our FY2007-08 net profit numbers are 30% and 46% above consensus, respectively. Our 12-month target price of $3 per share is based on a 2.34x FY2008 P/BV. We think it should trade above its historical range because of the favorable industry position, leading to a net EPS growth of 148%, 0.7% and 18% in FY2007 to FY2009, respectively. - Deutsche Bank (July 17) Valuetronics Holdings (July 19: 35 cents) TP: 49 cents BUY (initiating coverage). Valuetronics is an integrated manufacturing services provider. We are forecasting Valuetronics to deliver 21% bottom line CAGR over FY2007 to FY2010F, with strong orders from existing and new customers. We are also anticipating steady net margin expansion underpinned by economies of scale as its order book is expected to grow 17% in FY2008 and 25% in FY2009, and management's continued focus on maintaining healthy gross margins of between 18% and 20%. Fair value is at 49 cents, based on 8x FY2009 PER, implying a 42% upside potential. Valuetronics trades at a compelling 5.7x FY2009 PER. Management is confident of keeping to is 30% dividend payout ratio, implying a FY2009 dividend yield of 5.3%. - Kim Eng Research (July 17) |
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evideo
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22-Jul-2007 22:14
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The magazine is just a guide. Please do your own homework before you buy or sell. Don't follow blindly. |
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davidheng
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22-Jul-2007 21:41
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Don't mean to put anyone down but "they" do have different opinions. Best rely on your own research.
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spurs88
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22-Jul-2007 21:08
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Don't get fooled by this magazine. It is written by people who have vested interest to buy or sell. heard some ah peis and ah sohs were conned into selling FreightLink last Monday after reading the issue last Sat. This gem then suddenly shot up. Maybe these so called analysts should state how many shares they holding or are going to buy when they write the articles, so as to give the readers a fairer picture of their motives. |
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evideo
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22-Jul-2007 19:54
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Page 3
of the edge. Scomi Marine to sell CH Offshore stake? Is Malaysian offshore company Scomi Marine selling its 29.1% stake in CHO, the vessel chartering arm of Chuan Hup Holdings? SM, the single-largest shareholder of CHO, is said to have received an offer from "a player in the market" to buy the stake. The associate stake, which is just under the takeover threshold, was acquired in late 2005 at just 40cts a share. CHO closed last Friday at 86.5cts, after hitting an intraday high of 92.6cts on July 13. This brings year-to-date gains to 92%. The shares of this low-profile vessel charterer has lagged its listed peers in the O&M for much of last year, but now have started to catchup after investor latched onto its low valuations. The booming offshore mkt, fuelled by oil&gas exploration/production facilities, has seen a pickup of M&A among the SGX-listed plays. Most recently, Pan-U Marine was gobbled up by Dubai Drydocks World, which made a general offer of $2.38 a share, valuing the company at 14.3x earnings for 2007. Acceptances had reached 87.82% as of July 18. Last Oct, private equity fund Nautical Offshore Services, wholly owned by Affinity Grp, bought a 44.3% stake in Jaya Holdings from MY conglomerate Sime Darby at $1.45. This valued Jaya at 9.7x earnings to June 2007. Sebastian Heng, head of research at Kim Eng, sees fair value of $1.10 based on PER of 15x for the year to June 2008 and a price/earnings to growth ratio of 0.3x. The company, one of SG's oldest vessel charterers, owns a fleet of 17 AHTS vessels, used to tow oil/gas offshore rigs and semi-submersibles from one location to another. They are also to handle rig anchors and buoys and transport drilling hardware such as fuel oil and pipes to and from rigs. CHO owns 2 AHTS with SM and provides engrg, procurement and crew payroll services for SM's fleet of 120 tugs and barges. For the 9 months to March, CHO said revenue rose just over a third to S$50.7mil while net profit almost quadrupled to S$51.5mil, buoyed by the sale of 4 vessels. Company is in the process of ordering 7 new AHTS vessels designed for use in deepwaters. By 2010, fleet capacity will rise by 80% from current level to more than 160,000 brake horsepower. SM, MY's largest operator of O&M transport vessels, acquired the stake in CHO in 2005, when Chuan Hup sold its marine logistics biz and 29.1% stake in CHO to Habib Corp, which was subsequently renamed Scomi Marine. Chuan Hup still has a 23.7% stake in CHO and 23.2% in stake in SM. SM is one of the 3 listed companies in Scomi Grp. The latter counts Kamaluddin Abdullah, the son of MY PM Abdullah Badawi, as a substantial shareholder. The dominant biz fot Scomi Grp is providing drilling fluids and waste management services for oil/gas operators. Scomi Grp CEO Shar Hakim Zain sits on the board of CHO as does Kamaluddin, while Scomi Grp chairman Asmat Kamaluddin is also chairman of CHO. Although the Scomi Grp is well-represented on the board of CHO and is the largest shareholder, it does not manage the company. All the more reason for Scomi Grpto consider a sale of the stake if the price is right. |
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evideo
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22-Jul-2007 11:54
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If you trade on POEMS alot, you can redeem your points for 1 year subscription of the magazine. If you sign up for a lim and tan trading account, you get 1 month free subscription to the magazine. |
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tgl_sg
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22-Jul-2007 01:11
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thanks for your effort. this is some great info! :) |
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iTrader
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21-Jul-2007 23:27
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Good effort Evideo. "The Edge" is highly recommended and it does not cost much ($70+ yearly and you receive a copy every saturday). |
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nknhuang
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21-Jul-2007 22:41
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Thank you for your info and effort! Well done! Evideo |
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CatTortoise
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21-Jul-2007 21:14
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Then I will look for it on every Saturday. 
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evideo
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21-Jul-2007 21:10
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I usually post the updates on Saturday afternoon.
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CatTortoise
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21-Jul-2007 17:50
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Thanks for your info and effort! 
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EastonBay
Master |
21-Jul-2007 17:41
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 for the effort.
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dawnsj
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21-Jul-2007 16:43
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Thanks, Evideo, for all the effort you have put in to summarise the contents in the Edge. |
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evideo
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21-Jul-2007 15:58
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THE EDGE ISSUE - JUL 23 - JUL 29, 2007. BUY/SELL/HOLD *NEW
COVER PAGE : Fully Booked (Page 16 to 19) -With hotels booked solid, room rates rising and visitor arrivals still growing, CDL Hospitality Trust is in the sweet sport of a massive boom. COVER STORY : Checking into CDL Hospitality Trust (Page 16) COVER STORY : Vita goes from ship to shore (Page 18 ) COVER STORY : No reservations about hotel plays (Page 19) -Amara Holdings -The Ascott Group -Ascott Residence Trust -Fragrance Group -Hotel Grand Central -Hotel Plaza -Hotel Properties -Mandarin Oriental Hotel -Orchard Parade Holdings -Overseas Union Enterprises. Temasek's Hong Kong Dilemma (Page 2) Scomi Marine to sell its CH Offshore stake ? (Page 3) Singapore dollar may rise to $1.49 : Citigroup (Page 4) Non-oil domestic exports on continued tech slump (Page 4) Ace Dynamics and C2O to see windfall from Paterson Linc (Page 6) LottVision expects gaming-related investments to pay off next year (Page 8 ) SPC rise on 'robust' refining profit (Page 9) China Sports International charts leap forward (Page 10) -Jostling for a piece of China's sportswear market -China Sports International -Anta Sports Products -Li Ning -China Hongxing Contel rocks with Harmonix deal to produce guitar game controllers (Page 12) VGO Corp hopes Bread & Butter will bring in the dough (Page 12) Piping-hot AnnAik bets on refineries to drive growth (Page 14) Midas chairman puzzled by reports of arrest; says company's progress will not be derailed (Page 14) Online-Only newspaper's time has come (Page 20) Let the property market sort itself out (Page 20) Chua Ma Yu : I'm a contrarian (Page 21) Virgin to take 20% stake in FAX in August (Page 21) Bank of America's profit trails as Citigroup, JPMorgan go abroad (Page 22) Are we underestimating Taiwan ? (Page 23) Central Banks' hoards won't earn easy money (Page 23) Is the Sing dollar an attractive funding currency ? (Page 24) Asian central banks have helped restrain US interest rates (Page 24) SPEED BUMP (Page 25) -Market plummets mid-week on hike in development charge and trading curbs on small caps but recovers ground by Friday. Guocoland - Leveraging on hot property markets in China and Singapore (Page 26) HupSteel - Riding on favourable industry fundamentals (Page 26) Tan Chin Tuan's family hikes stake in Straits Trading (Page 30) Uptrend Intact (Page 36) Will the market's breakout stick ? (Page 36) CITY & COUNTRY : Joining the herd (Page CC 1) -Popular Holdings and Eastern Holdings venture from publishing to property development. Morgan Stanley mulls moving to Kowloon (Page CC 6) BROKERS DIGEST : Bukit Sembawang Estates - MAINTAIN OUTPERFORM (tp = $16.41) SembCorp Industries - MAINTAIN BUY (tp = $7.50) Synear Food Holdings - BUY (Initiating coverage) (tp = $2.42) Epure Int'l - MAINTAIN BUY (tp = $2.64) SNP Corp - MAINTAIN BUY (tp = $1.26) United Engineers - BUY (Initiating coverage) (tp = $5.10) Rotary Engineering - MAINTAIN BUY (tp = $1.57) STX Pan Ocean Co - BUY (Initiating coverage) (tp = $3.00) Valuetronics Holdings - BUY (Initiating coverage) (tp = 49 cents) PERSONAL WEALTH SECTION : US Dollar bears growl again (Page PW 1) HSBC Brazil fund bets on lower interest rates, not commodities (Page PW 2) Potential corrections already priced in ? (Page PW 3) Bridgeway's black-box fund manager with heart (Page PW 4 & 8 ) MANAGEMENT AT WORK SECTION : Laying out the foundation for change (Page MW 2) Investing in sustainability (Page MW 4) Financial One : Man on a mission (Page MW 6) Building an Asean Brand (Page MW 8 ) Satyam counting on Asia (Page MW 10) REITs still the best bet (Page MW 12) VOLUME MOVERS : Equation Corp Ltd Global Ariel Ltd Armada Group Ltd Yongnam Holdings Ltd HOT STOCKS : Allgreen - Breaks down from top (tp = $1.50, resistance at $2.00) Guocoland - Retreating from resistance (Support at $4.40, resistance at $5.40) City Developments - Temporary bounce (Support at $14.40, resistance at $17) Keppel Land - Beginnings of a decline (tp = $7.20 if break below $8.50) CapitaLand - Set for a temporary rebound (Support at $7.50, resistance at $8.00) MCL Land - Forms a top (Support at $2.60, if rebound, resistance at $3.00) |
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