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The Edge - Brokers' Digest (Sep 17 - Sep 23, 2007) Post Reply Rate topic
decarn Member	23-Sep-2007 13:12        decarn About Contact  Quote this Post!
x 0   x 0  Alert Admin	Pension Master, nope I'm not. Just your average investor. :)
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Pension Elite	16-Sep-2007 22:20        Pension About Contact  Quote this Post!
x 0   x 0  Alert Admin	decarn , are you a broker of BB??
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scotty Senior	16-Sep-2007 22:15        scotty About Contact  Quote this Post!   Mood:
x 0   x 0  Alert Admin	Thanks. Useful info.
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decarn Member	15-Sep-2007 22:15        decarn About Contact  Quote this Post!
x 0   x 0  Alert Admin	BH Global Marine (Sept 13: 75.5 cents) TP: 85 cents UPGRADE TO BUY. BH Global announced the purchase of a plot of land adjacent to its current headquarters for $2.5 million. This increases total gross floor area threefold. The new property is scheduled to be fully operational by 3Q2008. Management intends to accommodate a new warehouse and office blocks on the new premises. It has also confirmed that, with the addition of the new warehouse, the company's warehousing capabilities will be doubled. Our fair value estimate (FVE) remains unchanged at 85 cents, based on 12x peg to FY2008 earning. Our FVE of 85 cents implies a 16.4% upside to the previous closing price. - Phillip Securities Research (Sept 11) Fraser and Neave (Sept 13: $5.35) TP: $6.30 MAINTAIN BUY. F&N's most recent launch, Solei @Sinaran, is 95% sold at the average selling price of $1,450 psf. As the group progressively recognizes contributions from projects sold out over the last 12 month, we should witness good profit growth in the next one to two years. The group has appointed Lee Hsien Yang, ex-Singtel CEO, as its non-executive chairman with effect from Oct 15. Despite the volatility of the market in recent weeks, we remain positive on this counter. Target price is $6.30 based on sum-of-the-parts valuation, with a 10% premium on its property RNAV (potential upside from Singapore and regional landbanks). - DBS Vickers Securities (Sept 12) Jaya Holdings (Sept 13: $1.90) TP: $2.15 MAINTAIN BUY. Jaya is acquiring a 100% stake in Nantong Dongjian Shipyard, China, for $7.3 million. With this, it will have a ship building presence in Singapore, Batam and China. It is leveraged on the strong outlook for offshore support vessels given its positioning as both a charter and a shipbuilder. Jaya is one of the cheapest oil and gas plays, with one of the highest dividend yields. Our target price of $2.15 is based on average net profit in FY2008-2009 using 15x for charter earnings and 12x for shipbuilding earnings. Assuming a dividend payout ratio of 60%, the shares offer a very attractive yield of 5.6% as well. They are trading cum dividend of 6.5 cents (ex-date Nov 5). - DBS Vickers Securities (Sept 11) C&G Industrial Holdings (Sept 13: 58.5 cents) TP: 95 cents MAINTAIN BUY. We have raised FY2007-2008 earnings estimates by 4% and 5%, respectively. As we expect stronger seasonality in 2H, there's scope to increase FY2007 estimates. In addition, the commencement of PSF (key feedstock) production in 4Q will further boost 2H2007 earning. We have mainly raised our FY2008 forecast to reflect revenue from the sale of a portion of PSF. Management has indicated that although most of the PSF produced in FY2008 (more than 70%) will be for internal usage, it will sell the rest at a premium. C&G is trading at 8x FY2007 PER, an attractive 31% discount against its comparables. Target price is 95 cents. - Kim Eng Research (Sept 13) Hiap Seng Engineering (Sept 13: 91.5 cents) TP: $1.20 STRONG BUY (initiating coverage). Hiap Seng Engineering is a major engineering services provider. Since FY2005, the group's revenue has been growing at an average of 62.97%. In view of the bullish oil and gas industry, its past track record and strong order book of about $220 million, we are anticipating similar growth in FY2008 and FY2009. Net profit increased 15.62 times, from a mere $990,000 in FY2005 to $15.46 million in FY2007. The group has been producing healthy and consistently increasing profit margins, which indicates that it has been conscientious at minimizing its costs and expenses. Our fair value estimate of $1.20 implies a 33.33% potential upside. - Phillip Securities Research (Sept 12) KSH Holdings (Sept 13: $1.90 I believe it is a print error, the correct price should be $1.18) TP: $1.66 BUY (initiating coverage). KSH, a construction, property development management group, derives 93% of its revenue from construction in Singapore and Malaysia, and the remaining from property development and management in China. As at June 30, 2006, it has secured six contracts worth more than $30 million. Its strong order book stands at $405 million as at September this year. Based on estimated net earnings of $11.5 million in FY2008, $16.5 million in FY2009 and $20.4 million in FY2010, KSH is currently trading at PERs of 8.5x for FY2008, 6x for FY2009 and 4.8x for FY2010. At this level, RNAV per share works out to $1.66, providing an upside of 48%. - Westcomb Securities (Sept 11) City Developments (Sept 13: $14.90) TP: $19.50 MAINTAIN OUTPERFORM. The highly anticipated Beach Road Site has been awarded to a consortium led by CDL. The winning bid was reportedly at around $1.69 billion, believed to be around $500 million below the highest bid. CDL will need to dedicate a minimum of 40% of the site's FGA to office use and a further minimum of 30% for hotel development. We use a blended cap-value of $3,500 psf, pegging the development to current rates for high-end residential, hotel and office properties, but expect the possibility of further cap-value reversion closer to completion date. Our target price, still based on a 20% premium to end-CY2008 is revalued net asset value, is raised from $19.10 to $19.50. - CIMB-GK Research (Sept 11) Hupsteel (Sept 13: 60.5 cents) TP: 71 cents BUY (initiating coverage). Hupsteel is a top industrial steel stockist. Riding on the thirst for industrial steel stemming from the boom in oil & gas, marine and construction industries, the performance has been very impressive, with its top line increasing fivefold from FY2003 to FY2007, and its bottom line jumping a staggering 22 times in the same period. Our local property and construction sector is expected to be buoyant for the next two year. We expect a rosy picture going forward for Hupsteel. We forecast another 20% in earnings growth into FY2008, which translates to an EPS of .5 cents. Our target price of 71 cents is based on 9.5x FY2008 earnings. - DMG & Partners Research (Sept 13) Soilbuild Group Holdings (Sept 13: $1.30) TP: $1.80 MAINTAIN BUY. In 1H to June 2007, Soilbuild's revenue rose 14% to $44.9 million y-o-y, while net profit was $28.7 million compared with the $2.3 million loss in 1H2006. The reported profit was mainly due to a $28 million revaluation gain of the Eightrium investment property. Stripping that number would result in a bottom line of $0.7 million. But this does not reflect the whopping $551 million property sales that will contribute to healthy earnings figures over the next few year. FY2007 projected net gearing stands at above 200%. Given that our intrinsic value of $1.80 represents a potential upside of 35% from the current price of $1.33, we maintain our "Buy" recommendation. - SIAS Research (Sept 7) Creative Technology (Sept 13: $6.10) TP: $6.10 MAINTAIN SELL. Its continuing reliance on MP3 suggests the fundamental outlook is unlikely to improve. Earnings visibility remains poor and we forecast profitability returning in FY2009. Book value contraction is another concern as we expect it to fall from US$6.30/shr (FY2005) to US$4.50/shr (FY2008E). We are cutting our FY2008 estimates from a loss of US$17 million ($25.7 million) to a loss of US$21 million before improving to US$19 million (FY2009). Net cash should reach US$80 million (FY2009), down from US$112 million (FY2007). The stock trades at 0.8x price to net tangible asset (FY2009) but 19x FY2009 PER and offers only 5% ROE. Our new target price for the Singapore-listed shares is $6.10. - Citigroup Research (Sept 7) Interra Resources (Sept 13: 27 cents) TP: $23 cents HOLD. 1H2007's top line was flat. The group saw revenue falling 5% y-o-y to US$6.27 million due to a lower weighted average oil price and lower shared production in Myanmar. 1H2007 gross profits declined 24% y-o-y to US$1.96 million, attributable to higher costs of production. Net profit for the same period declined substantially by 67% from US$0.88 million to US$0.29 million as the stakes in South East Sumatra PSC and Offshore Northwest Java PSC were divested in August 2006. Our fair NAV for the firm is pegged at $59.59 million, which translates into a fair value of 23 cents per share. At the current price of 27 cents, the counter is fully valued. - NRA Capital (Sept 13) STX Pan Ocean Co (Sept 13: $2.68) TP: $3.50 BUY. STX Pan Ocean announced the pricing for its Korea listing -- $2.80 per share, near Tuesday's close of $2.84, and above the indicated range on heavy investor demand. The dilutive effect from the stock is 20%. The stock has surged 62% since it obtained approval for its Seoul listing in mid-August. With the Baltic Dry Index (BDI) breaking all-time records and showing no signs of easing, we have upgraded our earnings to take into account favorable business condition. Even factoring in dilution, our new target price of $3.50, using a 9x FY2008PE valuation, has 25% upside, perhaps more if the BDI continues to breach crazy levels. - CLSA Asia-Pacific Research (Sept 13) Foreland Fabrictech Holdings (Sept 13: 48.5 cents) TP: 62 cents BUY (initiating coverage). Foreland is a vertically-integrated manufacturer of functional and normal fabrics. Its strong track record is reflected in its steady three-year earnings compounded annual growth rate (CAGR) of 161%, industry leading ROE of 32% and its superior gross margin of 37%. We expect strong FY2007 and 2008 net profit growth of 34% and 67%, respectively, on the back of Foreland's doubling of production capacity by FY2008 and introduction of new functional fabrics. Foreland currently trades at 8x FY2007 EPS, a discount to its peer average of 10x FY2007 EPS. We see fair value at 62 cents, in line with our PER and DCF valuations. - Kim Eng Research (Sept 6) Inter-Roller Engineering (Sept 13: 84 cents) TP: 90 cents STRONG BUY (initiating coverage). It has been awarded a $58 million contract to design, supply and install a baggage handling system for the New Doha International Airport, to be completed by September 2009. Despite the favorable macro outlook for aviation infrastructure spending, we are cautious on the stock following recent changes to the senior management and board committees and a possible change in tis dividend policy. Our 12-month target price of 90 cents is based on a 2008 PER of 14x, higher than the group's 2003 to 2006 historical average of 6.5x and below the Singapore market 2007 PER of 16.9x. - Citigroup Research (Sept 10) TPV Technology (Sept 13: $1.02) TP: $1.45 MAINTAIN OUTPERFORM. 2Q2007 net profit of US$44.1 million was ahead of our estimate of US$31.9 million. Positive surprises sprang from higher than-expected sales and lower-than-expected SGA expenses (due to forex gains) and minority interests. Interim net profit represents 42% and 44$ consensus and our full-year forecasts, respectively. It declared an interim dividend of 0.8 US cents. We have raised our FY2007 net profit forecast by 13% to factor in the 2Q numbers, and fine-tuned our FY2008-2009 EPS forecasts to reflect a higher number of shares. Our target price of HK$7.45/$1.45 continues to peg TPV at 12x CY2008 fully-diluted EPS. - CIMB-GK Research (Sept 11) Copyright Disclaimer Read More...
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