DJ MARKET TALK: S'pore MAS Likely To Focus On Growth In October - CS 

0030 GMT [Dow Jones] The Singapore economy still faces some strong headwinds from external factors, Credit Suisse economist Michael Wan says. Comments from the government suggest there could still be some global macroeconomic pain yet to weigh on the export-focused domestic economy. "The MAS will have to look at the tail risks very carefully as a lot of the slowdown in Europe is yet to feed through to the local economy," Wan says. "Moving forward in October, there will be a bias toward focusing on growth rather than inflation
 
 

*DJ Singapore MAS Official: Property Market Has Stabilized
 
 

*DJ Neptune Orient Lines Target Cut To S$0.90 From S$0.95 By Maybank-Kim Eng
 
 

*DJ Singapore MTI Official: Don't Expect Technical Recession
 
 

*DJ Mapletree Commercial Trust Started At Hold, Target S$1.16 By Jefferies
 

F & N / AP BREW

S$8.49-FRNM.SI / S$52.50-APBW.SI

 Int’l Herald Tribune quoted a foreign broking house

analyst as expecting Thai Beverage to launch a bid

for F&N, in which it presently owns 24%.

 We believe it is “too late” for such a move, given what

has already taken place:

a. F&N has agreed to accept Heineken’s $50 a

share offer for its direct 7.3% and indirect

32.4% stake in APB, subject to shareholders

approval at a EGM to be convened. While Kirin’s

stance is not known, Thai Bev is expected to vote

against.

b. Kindest Place, controlled by son-in-law of

Charoen S, and which already has a 8.6% stake

in APB, has offered $55 a share only for F&N’s

direct stake in APB, an offer that closes on Aug 16.

If successful, it will own just under 16% of APB,

which will help ensure its continued listing.

 Furthermore, there is no such a thing as a fast-tract

general offer.

 Many are also counting on Heineken to raise its bid

above $50. However, analysts covering Heineken

believe the $50 a share offer is already rich (vis-a-vis

other recent deals in the sector) and Heineken’s share

price has fallen 5% from the high reached on Aug 3rd,

after F&N accepted its offer.

 F&N’s high thus far is $8.55, still lower than $8.88 Thai

Bev paid OCBC, Great Eastern and Lee Rubber

for the initial 22% stake.

CREATIVE TECH

S$3.39-CREA.SI

 While no surprise, Creative is probably the only

“quality” name to get on SGX’s watch list, as its

US$83.96 mln loss for year ended June ’12 makes it

the 3rd consecutive year of losses.

 And what is even more disappointing is the downbeat

statement on prospects : continued operating loss

in the current quarter ending Sept ’12; and no update

on (a) sales of SoundBlaster Axx; and (b) Hanzpad

- is launch later this year (delayed from May) on track?

 The psychologically important $3.38-3.40 technical

support is under threat, as highlighted 2 weeks ago.

KEPPEL CORP

S$11.23-KEPC.SI

 KEPPEL CORP ($11.23, down 7) has secured a

US$950 mln contract from Petrobras for the

fabrication and integration of topside modules on two

FPSOs: P-66 and P-69. Maintain BUY.

1. Venture’s ($7.77, up 4 cents) 2Q ’12 profit fell 20%

yoy to $33.6mln, dragging 1H 12 profit down 17% to

$69mln, accounting for 43% of full year consensus

profit estimate of $159mln. Given that 2H of the year

is usually stronger for the company, we believe the

performance was in line with expectations.

Management expects to launch several new products

from existing and new customers towards the end of

this year with growing contributions expected from

2013. Despite the payment of $151mln in dividends,

cash continues to increase from $338mln to $399mln.

We believe last year’s 55 cents dividend would be

sustained this year, giving an attractive yield of 7.1%,

hence maintain BUY.

2. Sino Grandness’s (46.5 cents, up 1 cent) 2Q ’12

profit rose 53% yoy to Rmb83mln, bringing 1H 12

profit up 64% to Rmb140mln, a record for the

company. The performance blew pass consensus

expectations and 1H 12 already accounts for 74% of

full year consensus expectations of Rmb189mln

reflecting the better than expected performance of the

canned fruit and beverage division. While 2H is

traditionally a stronger period for the company due

to the holiday season sales, this year’s 2H in terms of

profitability may not match 1H ’12’s record

Rmb140mln due to the need to expense off one-time

professional fees as well as amortization of interest

expense for the issue of their convertible bonds to

Goldman Sachs. And coupled with the strong runup

in share price ahead of its results release, we expect

the stock to consolidate its gains, hence maintain our

HOLD recommendation.

SUMMARY

3. After having disappointed the market last quarter (3Q

to Mar ’12) by reporting an 8% yoy decline in profit to

Rmb241mln we understand that China Minzhong

(65.5 cents, up 1/2 cent) will not disappoint the

market for 4Q ended June ’12 (to be announced on

27 Aug ’12) after having delivered the crops that were

delayed by the late arrival of the winter period. This

suggests a strong 44% growth for 4Q ended June ’12

to Rmb140mln, a strong reversal from 3Q ’12’s 8%

decline and would pull full year to June ’12

performance up 15% to Rmb649mln versus 9 month

to Mar ’12 growth of only 8%. And the current

weather havoc that is impacting the central and

northern parts of China will not impact them as they

are situated in the South and besides its also the

company’s lull period now. We understand that

management is targeting to grow another 10-15%

(better than consensus expectations of 5-10% growth)

next year, underpinned by their new processing facility

and strong contributions from the high margined King

Oyster Mushrooms (via their recently announced

industrialized farming method). We maintain BUY.

4. China’s weaker than expected July ’12 data (industrial

output, retail sales and investments) coupled with the

continued moderation in inflation data for July ’12

(1.8% versus June’s 2.2% and government’s target of

4%) buoyed Asian markets yesterday with China up

0.6%, Hong Kong, Indonesia and Japan up 1%, Taiwan

and Korea up 1.5 to 2%, Malaysia up 0.4% as investors

bet that China’s government will announce more

policy easing measures soon to underpin growth.

Today’s Focus

• Keppel Corp – Secured US$950m contract from Petrobras; SembCorp Marine next in line.

• Ezion – Growth and visibility stretches into FY14; maintain BUY, TP raised to S$1.42.

• MIIF - Yield may not be sustainable; downgrade to HOLD, TP cut to S$0.58.

Singapore

Wired Daily

Page 2

2Q12 core net loss of US$6m for NOL was within

estimates. Cost saving initiatives is bearing fruit. 3Q peak

season results will likely be better. Beyond 3Q, visibility is

limited, as the unfavourable containership demand-supply

mismatch will continue to pressure rates, especially in the

low season. Maintain HOLD with TP of S$1.23.

Bharti’s earnings were 37% below consensus estimate

due to intensified competition. Bharti is expected to

remain aggressive in maintain its revenue share. As a

result, SingTel’s FY13F/14F earnings were trimmed by

2%/3%. Maintain HOLD with lower TP of S$3.25 (Prev S$

3.29). Near-term cost pressures from mobile advertising in

Singapore is a concern.

StarHub’s net profits of S$86.8m (+11% y-o-y, -2% q-oq)

were broadly in line with consensus estimates of

S$84m. StarHub paid cash tax for the very first time. In

the past, StarHub had never paid any cash taxes due to

certain tax credits. It has also ruled out capital

management, citing new reasons: capex needs for 4G

and enterprise business in the longer term. Maintain

HOLD for 5.6% yield assuming higher DPS of 21 Scts in

FY13F. StarHub is not cheap at 19x FY12 PE versus 14x

historical average.

Core profit of S$31m for Venture was below forecast due

to higher proportion of lower margin products

New product launches/customers in 2H should drive

growth in 2013. No change to forecast; maintain HOLD

and TP of S$8.15. The stock has rebounded to $7.77,

which is just slightly above the $7.70 short-term

resistance. Technically, we continue to see downward risk

to $7.15 or even as low as $6.80.

Yangzijiang’s 2Q12 net profit was slightly below on lower

forex gain. YTD order wins stands at US$295m, while

orderbook is at US$3.8bn. Yangzijiang has outstanding

options for 26 units of 10k TEU containership worth

US$2.6bn with Seaspan and Peter Dohle, where some

could materialise in 2H, though possibly at lower prices.

Maintain BUY and S$1.55 TP, supported by undemanding

valuations and attractive dividend yield of 6%.

Midas Holdings expects 2Q12 and H12 results to be

significantly lower than the corresponding prior periods.

The expected decline is mainly attributed to:

- Lower revenue;

- Higher operating expenses and finance cost; and

- Significantly wider share of loss from its

associated company, Nanjing SR Puzhen Rail

Transport Co., Ltd.

Xinren Aluminum expects its overall revenues and

earnings to be significantly lower for 1H12 as compared

to 1H11. The group was affected by (i) the overall

decrease in the average selling price and sales volume of

aluminum products; (ii) an increase in the costs of

electricity; and (iii) the lower trading margin to total sales.

Stamford Tyres is forming a $12.3m JV company with

Sumitomo Rubber Asia (Tyre) to cater to India's fastgrowing

replacement-tyre market. Under the agreement,

Sumitomo will hold a 60% stake in the JV company

Falken Tyre India (FTI), while Stamford Tyres will hold

40%.

The Singapore economy is now expected to grow 1.5 to

2.5% this year, according to Prime Minister Lee Hsien

Loong. This cuts the top end of the government's earlier

1-3% forecast, while raising its bottom end by half a

percentage point. The economy grew 1.7% in the first

half. Assuming no changes to Q1 GDP, this points to

year-on-year growth of 2% in the second quarter,

marginally above the flash estimate of 1.9% growth.

Final GDP figures for 2Q12 announced this morning saw

the economy contract by 0.7% QoQ. That translates into

a 2.0% YoY expansion. This is a upward revision from a

1.1% QoQ (1.9% YoY) decline reported in the earlier

advance GDP estimates.

China's factory output growth slowed unexpectedly in

July to its weakest in more than three years. Industrial

output growth slowed to 9.2% y-o-y in July, its weakest

since May 2009, down from 9.5% in June. Consumer

inflation eased to 1.8% in July from 2.2% in June, pulling

back further from a three-year high last July of 6.5%.

Consumer prices edged up 0.1% in July from the

previous month, compared to expectations of a 0.1%

drop.

Singapore

Wired Daily

Page 3

Share Buy-Back

Company D.O.T. Buy /Sell No.of shares S$/shr Cumulat iv e %

purchase

Overseas-Chinese Banking Corp 07-Aug-12 Share Buy-Back 100,000 9.5100 0.26

Overseas-Chinese Banking Corp 03-Aug-12 Share Buy-Back 100,000 9.4000 0.26

Second Chance Properties Ltd 03-Aug-12 Share Buy-Back 3,512,000 0.3770 0.84

Overseas-Chinese Banking Corp 02-Aug-12 Share Buy-Back 200,000 9.5100 0.26

Ho Bee Investment Limited 30-Jul-12 Share Buy-Back 400,000 1.2200 0.44

Ho Bee Investment Limited 27-Jul-12 Share Buy-Back 300,000 1.2167 0.38

Ho Bee Investment Limited 26-Jul-12 Share Buy-Back 394,000 1.2150 0.34

AEM Holdings Ltd 25-Jul-12 Share Buy-Back 2,500,000 0.0850 1.66

HG Metal Manufacturing Ltd 25-Jul-12 Share Buy-Back 20,000 0.0820 0.86

Ho Bee Investment Limited 25-Jul-12 Share Buy-Back 426,000 1.2138 0.29

Ho Bee Investment Limited 24-Jul-12 Share Buy-Back 563,000 1.2094 0.23

San Teh Limited 24-Jul-12 Share Buy-Back 242,000 0.2900 1.16

SGX Masnet

Singapore

Wired Daily

Page 4

Substantial Shareholders’ Transactions: 26 July – 2 Aug 2012

*Deemed Interest

Source: Business Times; SA: Share Allotment; ST: Share Transfer, B/R: Bonus/Rights Issue; OE: Option Exercise; PL: Placement Shares

Stock Transacted Date Substantial Shareholder/ Director

Buy/Sell/

Conv

No of

Shares

('000)

Price Per

Share $

%Issued Cap

Before

Change

%Issued Cap

After Change

Grand Banls Yachts 02-Aug-12 Shinetown Ltd Sell 447 na 7.53 7.07

M Dev 01-Aug-12 Value Capital Asset Mgt Sell 16958 na 6.98 4.58

Stats Chippac 01-Aug-12 Marathom Asset Mgt LLP Sell 1549 na 6.08 5.99

Popular Hldgs 31-Jul-12 Chou Cheng Ngok * Buy 100 0.23 56.92 56.93

Popular Hldgs 31-Jul-12 World Holdings Buy 100 na 56.92 56.93

Popular Hldgs 30-Jul-12 Chou Cheng Ngok * Buy 500 0.23 56.86 56.92

Popular Hldgs 30-Jul-12 World Holdings Buy 500 na 56.86 56.92

Petra Foods 30-Jul-12 Aberdeen Asset Mgt PLC & Subsidiaries * Buy 2369 na 5.86 6.25

Petra Foods 30-Jul-12 Aberdeen Asset Mgt Asia * Buy 2369 na 5.86 6.25

ComfortDelgro 30-Jul-12 The PNC Financial Ser. Grp * Buy 71 1.64 4.99 5

ComfortDelgro 30-Jul-12 Blackrock Inc * Buy 71 1.64 4.99 5

Popular Hldgs 27-Jul-12 Chou Cheng Ngok * Buy 141 0.22 56.84 56.86

Popular Hldgs 27-Jul-12 World Hldgs Buy 141 na 56.84 56.86

San Teh 27-Jul-12 Poh Choo Bin Buy 100 na 6.74 6.76

M Dev 27-Jul-12 Value Capital Asset Mgt Sell 18101 na 9.54 6.98

Addvalue Technologies 26-Jul-12 Merida Resources Incorp Sell 500 na 5.01 4.96

Keppel Corporation 26-Jul-12 Blackrock Inc * Buy 602 10.95 4.98 5.02

Popular Hldgs 26-Jul-12 World Hldgs Buy 540 na 56.78 56.84

Keppel Corporation 26-Jul-12 PNC Financial Servces Grp Buy 602 10.95 4.98 5.02

C&G Env Protect 26-Jul-12 C&G Hldgs (HK) Ltd Buy 18000 na 76.02 77.87

C&G Env Protect 26-Jul-12 Lam Chik Tsan * Buy 18000 na 76.02 77.87

C&G Env Protect 26-Jul-12 Lin Yan * Buy 18000 0.12 76.02 77.87

Singapore

Wired Daily

Page 5

Announced Dividends and Capital Issues: 8 Aug 2012 – 22 Nov 2012 (by Ex-Date)

Company Type Particulars Ex Date Paid/ Payable

JARDINE CYCLE & CARRIAGE LTD DIVIDEND USD 0.18 ONE-TIER TAX 10-Aug-12 24-Sep-12

FISCHER TECH LTD DIVIDEND SGD 0.006 ONE-TIER TAX 13-Aug-12 30-Aug-12

METAL COMPONENT ENGG LTD RIGHTS 1RS1W FOR 1SH OFFER OF 1 FOR 1 @ SGD 0.01 13-Aug-12

RAFFLES MEDICAL GROUP LTD DIVIDEND SGD 0.01 ONE-TIER TAX 13-Aug-12 31-Aug-12

SINGAPORE POST LIMITED DIVIDEND SGD 0.0125 ONE-TIER TAX 14-Aug-12 31-Aug-12

SOUP RESTAURANT GROUP LIMITED DIVIDEND SGD 0.0035 ONE-TIER TAX 14-Aug-12 31-Aug-12

DAIRY FARM INT'L HOLDINGS LTD DIVIDEND USD 0.065 15-Aug-12 10-Oct-12

HONGKONG LAND HOLDINGS LIMITED DIVIDEND USD 0.06 15-Aug-12 10-Oct-12

HSBC ADR 10 DIVIDEND USD 0.45 15-Aug-12 04-Oct-12

JARDINE MATHESON HLDGS LTD DIVIDEND SCRIP OPTION USD 0.35 15-Aug-12 10-Oct-12

JARDINE STRATEGIC HLDGS LTD DIVIDEND SCRIP OPTION USD 0.07 15-Aug-12 10-Oct-12

MANDARIN ORIENTAL INTL LTD DIVIDEND USD 0.02 15-Aug-12 10-Oct-12

SWING MEDIA TECHNOLOGY GRP LTD DIVIDEND SCRIPDIVSCHEME SGD 0.002 15-Aug-12 05-Oct-12

ELEC & ELTEK INT CO LTD DIVIDEND USD 0.09 ONE-TIER TAX 17-Aug-12 06-Sep-12

TRANSIT-MIXED CONCRETE LTD DIVIDEND SGD 0.01 ONE-TIER TAX 17-Aug-12 07-Sep-12

GREAT EASTERN HLDGS LTD DIVIDEND SGD 0.1 ONE-TIER TAX 21-Aug-12 05-Sep-12

CSC HOLDINGS LTD DIVIDEND SGD 0.0009 ONE-TIER TAX 23-Aug-12 07-Sep-12

NY01100F 160901 INTEREST 0.0375 23-Aug-12 03-Sep-12

NY03100A 180901 INTEREST 0.04 23-Aug-12 03-Sep-12

NY05100N 200901 INTEREST 0.0325 23-Aug-12 03-Sep-12

NY07100X 220901 INTEREST 0.03125 23-Aug-12 03-Sep-12

NY09100H 240901 INTEREST 0.03 23-Aug-12 03-Sep-12

NZ07100S 270301 INTEREST 0.035 23-Aug-12 03-Sep-12

NZ10100F 300901 INTEREST 0.02875 23-Aug-12 03-Sep-12

CAPITAMALLS ASIA LIMITED DIVIDEND SGD 0.01625 ONE-TIER TAX 29-Aug-12 13-Sep-12

OSIM INTERNATIONAL LTD DIVIDEND SGD 0.01 ONE-TIER TAX 29-Aug-12 12-Sep-12

OSIM INTERNATIONAL LTD DIVIDEND SGD 0.01 ONE-TIER TAX 29-Aug-12 12-Sep-12

SAKARI RESOURCES LIMITED DIVIDEND USD 0.02 TAX EXEMPT 30-Aug-12 13-Sep-12

CAPITARETAIL CHINA TRUST DIVIDEND 010112 - 300612 SGD 0.0482 05-Sep-12 26-Sep-12

POPULAR HOLDINGS LIMITED DIVIDEND SGD 0.008 ONE-TIER TAX 07-Sep-12 26-Sep-12

NOVO GROUP LTD. DIVIDEND SGD 0.01 ONE-TIER TAX 10-Sep-12 04-Oct-12

FRAGRANCE GROUP LIMITED BONUS OFFER OF 1 FOR 1 14-Sep-12

TOTAL ADR 10 DIVIDEND APPROXIMATE USD 0.587795 19-Sep-12 18-Oct-12

GP INDUSTRIES LIMITED DIVIDEND SGD 0.015 ONE-TIER TAX 20-Sep-12 04-Oct-12

N507101E 121001 INTEREST 0.025 20-Sep-12 01-Oct-12

N507101E 121001 ENTITL. REDEMPTION 100% 20-Sep-12 01-Oct-12

N508100V 130401 INTEREST 0.01625 20-Sep-12 01-Oct-12

N509100N 141001 INTEREST 0.01375 20-Sep-12 01-Oct-12

N511100W 160401 INTEREST 0.01125 20-Sep-12 01-Oct-12

N710100Z 170401 INTEREST 0.02375 20-Sep-12 01-Oct-12

NA12100N 420401 INTEREST 0.0275 20-Sep-12 01-Oct-12

SINGAPORE EXCHANGE LIMITED DIVIDEND SGD 0.15 TAX EXEMPT 26-Sep-12 12-Oct-12

LIAN BENG GROUP LTD DIVIDEND SGD 0.01 ONE-TIER TAX 03-Oct-12 19-Oct-12

LIAN BENG GROUP LTD DIVIDEND SGD 0.01 ONE-TIER TAX 03-Oct-12 19-Oct-12

K1 VENTURES LIMITED DIVIDEND SGD 0.005 ONE-TIER TAX 31-Oct-12 14-Nov-12

NX09100W 190601 INTEREST 0.025 22-Nov-12 03-Dec-12

NX11100X 210601 INTEREST 0.0225 22-Nov-12 03-Dec-12

Source: SGX