Corporate News

F& N: Some bonds fail to get votes.

coupons at the extraordinary resolution tabled at the meeting yesterday for the

holders of the various bonds and notes held by F& N Treasury. Specifically, the

required quorum was not achieved at the meeting of the holders of the sevenyear

bonds they hold an outstanding S$80m worth of 3.15% bonds due 2018.

The extraordinary resolution for the five-year bonds on the other hand -

S$220.0m of 2.48% bonds due 2016 - was passed without amendment. The

meeting for the holders of the seven-year bond has thus been adjourned and is

expected to be reconvened on 29 November. The vote fell through for higher-rate(Source: The Business Times)

GLP: Sets up US$3b fund 2QFY14 net profit falls 26% yoy.

Properties announced the establishment of a US$3b China Logistics Fund,

even as net profit fell 26% yoy to US$145m in 2QFY14. This was on the back

of revenue falling 19% yoy to US$140m (2QFY13: US$173m). The fund, which

is the largest of its type in the world, is focused on the development of logistics

infrastructure in China. GLP will seed the fund with land to support 1.8m sqm

of leasable area. In addition, a US$1b credit facility has been secured from

China Merchants Bank to fund development activity in China. As the asset

manager, GLP will retain a 56% stake in the fund.

Times)Global Logistic(Source: The Business

Oxley: Buys prime freehold land in Kuala Lumpur.

overseas acquisition in Kuala Lumpur in May, Oxley Holdings, which has been

making headlines for its choice global investments, is adding yet another

trophy to its stash. The latest is a plot of prime freehold land measuring about

12,575sqm, located within the Kuala Lumpur City Centre area. Oxley picked up

the site, which houses six bungalow buildings at 149-159 Jalan Ampang, for

RM446.7m (S$174m) from an estate sale. The group intends to redevelop the

land, subject to obtaining all the necessary approvals.

Times)Following its first(Source: The Business

Parkson Retail Asia: 1QFY14 net profit down 11% yoy.

Asia's net profit for 1QFY14 slipped 11.4% yoy to S$10.26m. Revenue was

4.1% lower yoy at S$108.73m on the back of a challenging retail environment.

The group expects operating results to improve in the coming quarters,

boosted in part by the year-end holiday season. (Source: The Business Times)

Thai Beverage: 3Q13 net profit tumbles.

fell to Bt4.08b (S$161.01m) from Bt15.68b baht a year ago. Revenue came in

at Bt35.04b, down from Bt37.58b in 3Q12. Thai Beverage net profit for 3Q13(Source: The Business Times)

UE: 3Q13 net profit down 2% yoy at S$12.5m.

net profit of S$12.5m for 3Q13, down 2% yoy. Revenue more than quadrupled

to S$732m due to consolidation of the results of WBL, which it took over earlier

this year. The higher revenue was also due to increased rental income from

the group's properties and engineering and construction subsidiary UE E& C.

The lower margins were caused by losses incurred by WBL's listed technology

subsidiary Multi-Fineline Electronix. WBL was also hit by lower car sales and

lower recognition of property sales. United Engineers reported(Source: The Business Times)Parkson Retail

What?s in the Pack

Rotary Engineering- Key takeaways from results briefing (RTRY

SP/BUY/S$0.66/Target: S$0.88)

Rotary reported a stronger set of results for 9M13. Net profit rebounded to S$16m from a loss in 9M12, mainly due to higher revenue and lower?

Rex International- Encouraging progress from Rexonic well stimulation

(REXI SP/BUY/S$0.66/Target: S$1.27)

In the results briefing, we were encouraged by news that Rexonic has signed contracts to provide the eco-friendly Rexonic solution to three MNCs till 2016.

Overseas Education- 9M13 results in-line. Potential upside to student

capacity at new campus

(OEL SP/BUY/S$0.81/Target: S$0.94)

Maintain BUY with a slightly higher target price of S$0.94, based on our 3-stage DCF model. The implied 2014F PE is 15.8x.

Olam International- 1QFY14: Seasonally weak quarter.

(OLAM SP/HOLD/S$1.50/Target: S$1.60)

Maintain HOLD with target price of S$1.60 based on FY15F PE and a 30% discount to Olam?s long-term forward PE of 16.1x (or equivalent to 1SD below

long-term mean PE).

Singapore Telecommunications- 2QFY14: Overseas businesses suffer from

currency depreciation. (ST SP/HOLD/S$3.78/Target: S$3.68)

Maintain HOLD. Our target price is S$3.68, based on sum-of-the-parts methodology.

Bumitama Agri-Revision on FFB production growth guidance to 17% from

25% on weaker-than-expected recovery in production

(BAL SP/BUY/S$0.985/Target: S$1.23)

Maintain BUY and target price of S$1.23, based on 14x 2014F PE. We like BAL for its young age profile and best OER to support its 5-year net profit CAGR of 32%.

ST Engineering (STE SP, S63) ?

Technical SELL with +4.2% potential return

The stock is likely to trend lower as it has hit our SELL target of S$3.95 mentioned on 24 Oct 13 in the last trading session?

SingHaiyi Group (SINX SP, 5CE) ?

Technical BUY with +39.1% potential return

The stock looks poised to rebound as it is still trading above its 200-day EMA and has closed above its 50-day EMA. A higher low has?.

Indofood Agri Resources (IFAR SP, 5JS) ?

Technical BUY with +11.1% potential return

The stock is likely to trend higher as it has closed above S$0.85 which was the bullish trigger level mentioned on 22 Oct 13...

Corporate News

CRT: DPU of 3.26 cents beats forecast by 4.6%. Buoyed by an upturn in consumer sentiment, Croesus Retail Trust's (CRT) DPU of 3.26 cents for the 144 days ended 30 Sep 13 beat its IPO forecast by 4.6%. Income available for distribution beat its forecast by 8.3%, at 1,140m yen (S$14.3m). The upside was largely due to property tax rebates and a decrease in current income tax. This was offset by a difference in hedge rates between actual and forecast for the period. Ggross revenue for the period met expectations, at 1,998m yen. Net property income was 1,269m yen, or 3.1% higher than forecast. Overall, property expenses were 4% below forecast. (Source: Business Times)

CSE Global: Net profit up 5.8% yoy in 3Q13. CSE Global recorded net profit of S$11.4m in 3Q13, up 5.8% yoy. Revenue came in 6.3% lower yoy at S$122m mainly due to lower revenues in the Americas and EMEA  (Europe, Middle East and Africa) regions. However, net margins in these regions improved substantially due to the lower level of zero-margin revenue in the Middle East and the higher level of more profitable offshore activity in the Americas. (Source: Business Times)

Olam: Sells Australian almond orchards for A$200m. In its second sale-and-leaseback transaction, Olam International is selling nearly 12,000ha of almond orchards in Victoria, Australia, for A$200m (S$233m) cash. The deal was made with a group of investors led by Zurich-based Adveq Real Assets Harvested Resources, an asset manager that invests in private-equity and real asset funds. Olam will lease the land and related farming and irrigation infrastructure for 18 years, with the option of renewal. It expects to book a post-tax capital gain of A$45m from the deal. (Source: Business Times)

Oxley Holdings: 1QFY14 net profit surges to S$250.8m. Oxley Holdings' net profit for the three months ended September hit a record S$250.8m, compared with S$6.6m a year ago. Revenue soared to S$686m from S$50m a year ago. Oxley declared an interim one-tier tax exempt cash dividend of 3 cents per share. (Source: Business Times)

Petra: Chocolate maker 3Q13 net profit up 3.5% yoy. Petra Foods posted a 3.5% yoy rise in 3Q13 net profit to US$14.8m, helped by higher sales from its branded consumer division. Revenue from the division rose 10.4% yoy to US$126.9m on higher sales from Indonesia, which grew 8% yoy to US$92m other regional markets including the Philippines, Malaysia and Singapore grew 17% yoy to US$35.3m. Indonesia accounts for 72% of revenue. Petra says it has cornered more than half the market for its brands in Indonesia. (Source: Business Times)

Tat Hong: 2QFY14 net profit down 53% yoy at S$8.2m.

From the Regional Morning Notes

Bumitama Agri- 3Q13: Net profit of Rp169b (+9.1% qoq, -5.2% yoy), below expectation, on lower-than-expected FFB production due to dry weather in 2011.

(BAL SP/BUY/S$0.99/Target: S$1.23)

FY13F PE (x): 19.6

FY14F PE (x): 15.9

Results below expectation. Bumitama Agri (BAL) reported 3Q13 net profit of Rp169b, bringing 9M13 net profit to Rp475b. However, excluding the one-off items, ie withholding tax on interim dividend in 9M13 and gain on hedging in 9M13, its adjusted 9M13 net profit would have been Rp490b.

Maintain BUY and target price of S$1.23, based on 14x 2014F PE. We like BAL for its young age profile and best OER to support its 5-year net profit CAGR of 32%.

ComfortDelGro Corporation- 9M13: No surprises, managing tough environment well.

(CD SP/BUY/S$1.895/Target: S$2.35)

FY13F PE (x): 15.5

FY14F PE (x): 14.7

Good solid showing. 9M13 net profit of S$203m (+6.3%) is within our expectations, accounting for 77% of our full-year estimate. The group?s 9M13 operating margin was flat yoy at 12.0%. Despite cost pressures on staff (+9.0% yoy) and maintenance (+8.8% yoy), areas such as fuel and materials & consumables declined 1.5% yoy and 12.1% yoy respectively to help offset the cost pressures. The significant rise in staff cost is attributable to: a) the headcount increase as a result of acquiring Metroline, and b) higher foreign worker levy. Maintain BUY on CD with a DCFbased target price of S$2.35.

First Resources- 3Q13: Net profit of US$51.4m is above expectation on lower effective tax rate. Outstanding results with good CPO price and production growth.

(FR SP/BUY/S$2.06/Target: S$2.40)

FY13F PE (x): 14.6

FY14F PE (x): 13.0

FR reported a net profit of US$51.4m (+36.4% qoq, -20.0% yoy) for 3Q13  and US$152.7m (-6.9% yoy) for 9M13. Its 9M13 results account about 85% of our full-year forecast. Results were above our expectation mainly on lower-thanexpected effective tax rate coming from tax adjustment by subsidiaries. Maintain BUY with a target price of S$2.40, based on 15x  2014F PE. We like FR for its hands-on management team, young age profile and efficiency.

RH Petrogas- 9M13: Weaker revenues registered due to the decrease in average oil price and decline in production.

(RHP SP/BUY/S$0.65/Target: S$1.60)

FY13F PE (x): n.m.

FY14F PE (x): 55.6

Top-line hampered by decline in production. RHP?s 9M13 revenue of

US$57.8m was lower by 4.3% qoq and 4.3% yoy due to the decrease in

average oil price for the period and decline in production due to its field?s

operational issues and oilfield?s natural production decline. Given that oil

prices have been on a short-term downtrend, we believe that RHP?s

revenue in 4Q13 would likely remain weak unless it is able to increase

production.

Maintain BUY with target price of S$1.60 based on NPV and risking model.

Our valuation is based on the NPV of the company?s current

production/near-production fields, plus risked estimates of its 2C resources

and prospective resources, less net debt adjusted for its committed capex

and new funds raised from its recent private placement exercise.

Yangzijiang Shipbuilding- 3Q13: Net income declines 6% yoy due to a

higher tax rate.

(YZJ SP/BUY/S$1.17/Target: S$1.39)

FY13F PE (x): 7.5

FY14F PE (x): 8.3

6% earnings decline mostly due to higher tax rate. Yangzijiang

Shipbuilding?s (YZJ) 3Q13 revenue was Rmb3.67b (+2% yoy), of which

shipbuilding revenue was Rmb3.32b (+0.4% yoy). Overall gross margin

(including investment business) edged up yoy to 29.6% (3Q12: 29.4%) due

primarily to a slightly higher percentage of high-margin investment

business (9.5% of total revenue in 3Q13 vs 8.5% in 3Q12). Shipbuilding

margin was 22% (3Q12: 23% 2Q13: 21%). Pre-tax profit still gained 6%

yoy but net income declined 6% yoy on a significant increase in the

effective tax rate to 29% (3Q12: 22%) due to a higher tax rate in Changbo

(25% vs 15%) and a withholding tax on Chinese subsidiaries' distributable

profit in 3Q13. YZJ remains our only BUY within Chinese shipyard sector.

We lift target price to S$1.39 (from S$1.32), based on 1.3x 2014F P/B.

Singapore Airlines- Key takeaways from analysts? meeting.

(SIA SP/HOLD/S$10.28/Target: S$11.40)

FY14F PE (x): 26.0

FY15F PE (x): 20.8

Expect further yield pressure in 2HFY14. 2H is generally a period of lower

yield and the airline has guided the same for this year. SIA noted that half

the 3.5% decline in 2Q?s pax yields was due to the stronger Singapore

dollar, with the rest of the decline coming from lower local yields.

Essentially SIA has been cutting prices to meet the competitive pressures.

Given the guidance, we lower our FY14 yield forecast by 3.5% to 11.0 S

cents. Maintain HOLD with a lowered target price of S$11.40 (previous

S$11.50).

  Crane supplier Tat Hong Holdings announced a net profit of S$8.2m for 2QFY14, down 53% yoy. Revenue was down 14% yoy at S$185.3m. The company said the results were due to a decline in profit contribution from Australian operations as well as S$5.2m of unrealised foreign exchange losses. Excluding foreign exchange effects, net operating profit would have improved 43% qoq. Tat Hong declared an interim dividend of 1 cent a share, down from 1.5 cents a year ago.