*DJ Olam International: Priced US$500 Mln of 5-Year Notes at 5.75% Coupon
 

 

NEW YORK - The S&P 500 closed at its highest level since December 2007 on Thursday after the Federal Reserve's aggressive action to bolster the economy encouraged investors to dive back into the market.
Based on the latest available data, the Dow Jones industrial average was up 206.51 points, or 1.55 per cent, at 13,539.86. The Standard & Poor's 500 Index was up 23.43 points, or 1.63 per cent, at 1,459.99. The Nasdaq Composite Index was up 41.51 points, or 1.33 per cent, at 3,155.83. - REUTERS
 
 
 

• STI - Pullback ended 2980, 3200 by year-end.Commodity, O&M and FAI plays to benefit as risk-on interest ticks up.
• Global Premium Hotel - Household name in the Economy hotel space; fair value S$ 0.29.
• IHH Healthcare - Replaces NOL as constituent of the Straits Times Index.

Singapore

Wired Daily

Page 2

IHH Healthcare will be a constituent of the Straits Times Index

(STI) following the conclusion of the half-yearly review. IHH

Healthcare replaces Neptune Orient Lines in the STI. Several

changes were made to other indices in the FTSE ST Index

Series including the FTSE ST Maritime and FTSE ST Catalist. In

the FTSE ST China Top Index, CWT will replace China

Minzhong Food. In addition, new quarterly reviews of the

indices, including the STI, will be introduced in June and

December to fast-track the inclusion of eligible IPO stocks. The

first quarterly IPO review will occur in December 2012. All

changes from the latest review are effective from the start of

trading on 24 September 2012.

Super Group will delist its Taiwan Depository Receipts (STDRs)

which are listed on the Taiwan Stock Exchange due to low

liquidity. The number of units of the company’s STDRs

outstanding and in circulation on the Taiwan Stock Exchange

has been less than 10m units for three consecutive months

since 14 March 2012.

The Liem family that runs Tuan Sing Holdings could be

interested in exiting Gul Technologies, market sources told BT,

as shares of Gul shot up 35% yesterday amid speculation of a

potential general offer. Gul's major shareholders are Tuan

Sing's TS Technologies and the Liems' vehicle, Nuri Pacific,

which holds a 42.96% stake.

Office rents in Raffles Place are expected to decline by 12-

15% in 2012 and 2013, before returning to growth in 2014.

While demand has held up well in Singapore, largely thanks to

foreign corporates keen to capitalise on growth in South-east

Asia, landlords remain under pressure to reduce rents because

of still-cautious demand and rising shadow space, according

to a report by DTZ Research. Prime rents in Singapore have

dipped 3% since the end of last year, despite being still the

third highest, at US$945 per square metre (psm) per annum,

based on DTZ's survey of 33 markets in the Asia-Pacific.

Share Buy-Back

Company D.O.T. Buy/Sell No.of shares S$/shr

Kinergy Ltd 13-Sep-12 Share Buy-Back 200,000 0.1840

Sembcorp Industries Ltd 13-Sep-12 Share Buy-Back 130,000 5.4992

GK Goh Holdings 13-Sep-12 Share Buy-Back 17,000 0.7350

Overseas-Chinese Banking Corp 13-Sep-12 Share Buy-Back 100,000 9.2900

Global Testing Corporation 13-Sep-12 Share Buy-Back 341,000 0.0640

Wilmar International 13-Sep-12 Share Buy-Back 7,388,000 3.0000

CDW Holdings 13-Sep-12 Share Buy-Back 100,000 0.0950

Viking Offshore and Marine 13-Sep-12 Share Buy-Back 50,000 0.1100

CDW Holdings 12-Sep-12 Share Buy-Back 200,000 0.0960

GK Goh Holdings 12-Sep-12 Share Buy-Back 135,000 0.7300

Global Testing Corporation 12-Sep-12 Share Buy-Back 363,000 0.0641

Overseas-Chinese Banking Corp 12-Sep-12 Share Buy-Back 100,000 9.3600

Viking Offshore and Marine Ltd 12-Sep-12 Share Buy-Back 513,000 0.1100

Avi-Tech Electronics Limited 11-Sep-12 Share Buy-Back 250,000 0.0750

CDW Holdings 11-Sep-12 Share Buy-Back 350,000 0.0957

Food Empire Holdings 11-Sep-12 Share Buy-Back 43,000 0.4200

GK Goh Holdings 11-Sep-12 Share Buy-Back 41,000 0.7250

Global Testing Corporation 11-Sep-12 Share Buy-Back 865,000 0.0639

Overseas-Chinese Banking Corp 11-Sep-12 Share Buy-Back 100,000 9.3300

Viking Offshore and Marine Ltd 11-Sep-12 Share Buy-Back 20,000 0.1090

GK Goh Holdings 10-Sep-12 Share Buy-Back 87,000 0.7250

Pan-United Corporation Ltd 10-Sep-12 Share Buy-Back 100,000 0.6500

Global Testing Corporation 10-Sep-12 Share Buy-Back 907,000 0.0630

Overseas-Chinese Banking Corp 10-Sep-12 Share Buy-Back 100,000 9.3100

Avi-Tech Electronics Limited 10-Sep-12 Share Buy-Back 237,000 0.0750

CDW Holdings 10-Sep-12 Share Buy-Back 150,000 0.0940

HG Metal Manufacturing Ltd 10-Sep-12 Share Buy-Back 433,000 0.0830

Kinergy Ltd 07-Sep-12 Share Buy-Back 48,000 0.1750

Overseas-Chinese Banking Corp 07-Sep-12 Share Buy-Back 31,000 9.3300

GK Goh Holdings 07-Sep-12 Share Buy-Back 95,000 0.7250

CDW Holdings 07-Sep-12 Share Buy-Back 472,000 0.0934

Viking Offshore and Marine Ltd 07-Sep-12 Share Buy-Back 50,000 0.1090

Macquarie Int'l Infra Fund Ltd 07-Sep-12 Share Buy-Back 2,500,000 0.5300

Wee Hur Holdings 07-Sep-12 Share Buy-Back 442,000 0.2756

Sarin Technologies 07-Sep-12 Share Buy-Back 100,000 0.9000

Source: SGX Masnet

Singapore

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Substantial Shareholders’ Transactions: 31 Aug – 6 Sep 2012

Stock Transacted Date Substantial Shareholder/ Director

Buy/Sell/

Conv

No of

Shares

('000)

Price Per

Share $

%Issued Cap

Before

Change

%Issued Cap

After Change

Jiutian Chemical 06-Sep-12 Anyang Longyu (HK) Dev * Buy 500 na 28.52 28.55

Pacific Healthcare 06-Sep-12 Pacific Investments Buy 100 na 7.55 7.58

Contel Corp 05-Sep-12 Joanne Ng Sell 7150 na 7.46 6.12

Memstar 05-Sep-12 Hong Pian Tee Buy 611 0.06 0.08 0.1

Perennial China Retail Trt 05-Sep-12 Kuok Khoon Hong * Buy 500 0.48 16.96 17

Perennial China Retail Trt 05-Sep-12 Pua Seck Guan * Buy 500 0.48 3.97 4.01

Raffles Education 05-Sep-12 Chew Kok Chor Buy 20 0.31 0.06 0.06

8Telecom Int'l 04-Sep-12 Ye Tianyun Buy 105 0.14 2.56 2.59

KS Energy 04-Sep-12 Richard James Wiluan * Buy 40 na 55.39 55.4

KS Energy 04-Sep-12 Rija Holdings * Buy 40 na 55.39 55.4

KS Energy 04-Sep-12 Kris Taenar Wiluan * Buy 40 na 55.39 55.4

LHT Holdings 04-Sep-12 Neo Koon Boo Buy 1000 0.14 22.25 22.72

LHT Holdings 04-Sep-12 Yap Mui Kee Buy 1010 0.14 11.52 12

LionGold Corp 04-Sep-12 Dato Md Wira Dani * Buy 900 1.26 5.11 5.22

Pacific Healthcare 04-Sep-12 Pacific Investments Buy 68 na 7.53 7.55

Pacific Healthcare 04-Sep-12 Willian Cheong * Buy 68 0.1 11.9 11.92

Perennial China Retail Trt 04-Sep-12 Kuok Khoon Hong * Buy 393 0.48 16.92 16.96

Perennial China Retail Trt 04-Sep-12 Pua Seck Guan * Buy 393 0.48 3.93 3.97

Sakari Resources 04-Sep-12 PTT Mining , PTT Public Co Ltd Buy 26185 na 8.74 11.04

ABR Holdings 03-Sep-12 Ang Yee Lim Buy 190 0.63 40.07 40.16

BRC Asia 03-Sep-12 Lau Eng Tiong * Buy 900 0.13 8.16 8.27

BRC Asia 03-Sep-12 Lau Eng Lin * Buy 900 0.13 8.16 8.27

BRC Asia 03-Sep-12 Lau Eng Hoe * Buy 900 0.13 8.16 8.27

BRC Asia 03-Sep-12 Lau Eng Seng * Buy 900 0.13 8.16 8.27

BRC Asia 03-Sep-12 Sin Teck Guan Pte Ltd Buy 900 na 8.16 8.27

CSE Global 03-Sep-12 Amundi S A Buy 456 na 5.95 6.04

CSE Global 03-Sep-12 Amundi Group * Buy 456 na 5.95 6.04

LionGold Corp 03-Sep-12 Nomura Holdings * Buy 1300 na 4.87 5.03

LionGold Corp 03-Sep-12 Nomura Int'l Plc * Buy 800 1.24 1.05 1.15

LionGold Corp 03-Sep-12 Nomura Int'l Plc Buy 500 1.24 3.81 3.87

Perennial China Retail Trt 03-Sep-12 Kuok Khoon Hong * Buy 100 0.48 16.92 16.92

Perennial China Retail Trt 03-Sep-12 Pua Seck Guan * Buy 100 0.48 3.92 3.93

Swing Media Tech 03-Sep-12 Janies Ip * Buy 110 na 23.84 23.87

Swing Media Tech 03-Sep-12 Hui Yan Moon Buy 110 0.1 0.52 0.55

8Telecom Int'l 31-Aug-12 Ye Tianyun Buy 198 0.14 2.52 2.56

AVI-Tech Electronics 31-Aug-12 Goh Chung Meng Buy 100 0.07 0.02 0.05

Fujian Zhenyun 31-Aug-12 Lim Cheng Kee Buy 30 0.14 0 0.03

Hartawan Hldgs 31-Aug-12 Winstedt Chong Buy 41 0.14 0.08 0.08

Haw Par 31-Aug-12 Han Ah Kuan Sell 10 6.32 0.03 0.02

HLN Technologies 31-Aug-12 Wa Kok Liang Buy 12 na 14.25 14.25

KS Energy 31-Aug-12 Richard James Wiluan * Buy 60 na 55.38 55.39

KS Energy 31-Aug-12 Rija Holdings * Buy 60 na 55.38 55.39

KS Energy 31-Aug-12 Kris Taenar Wiluan * Buy 60 0.75 55.38 55.39

KS Energy 31-Aug-12 Pacific One Energy Buy 60 0.75 55.38 55.39

M Development 31-Aug-12 Value Capital Asset Mgtm Sell 173010 na 14.6 0

M Development 31-Aug-12 Lin Chung Ming Buy 150546 na 11.5 24.24

Perennial China Retail Trt 31-Aug-12 Kuok Khoon Hong * Buy 307 0.47 16.88 16.92

Perennial China Retail Trt 31-Aug-12 HPRY Hldgs * Buy 307 0.47 13.66 13.68

Perennial China Retail Trt 31-Aug-12 Pua Seck Guan * Buy 307 0.47 3.69 3.71

Petra Foods 31-Aug-12 Aberdeen Asset Mgtm * Buy 1218 na 6.87 7.07

Petra Foods 31-Aug-12 Aberdeen Asset Mgtm Asia * Buy 1218 na 6.87 7.07

*Deemed Interest

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

Singapore

Wired Daily

Page 4

Announced Dividends and Capital Issues: 14 Sep 2012 – 22 Nov 2012 (by Ex-Date)

Company Type Particulars Ex Date Paid/ Payable

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

LANTROVISION (S) LTD RIGHTS OFFER OF 12 FOR 1 @ SGD 0.09 17-Sep-12

CDW HOLDING LIMITED DIVIDEND USD 0.005 18-Sep-12 05-Oct-12

SIA $300M 2.15%B150930 INTEREST 300312 - 290912 2.15% 19-Sep-12 01-Oct-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 2.50% 20-Sep-12 01-Oct-12

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

N508100V 130401 INTEREST 1.63% 20-Sep-12 01-Oct-12

N509100N 141001 INTEREST 1.38% 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

F&N TREASURY S$220M2.48%160328 BONDS INT 280312 - 270912 2.48% 21-Sep-12 28-Sep-12

F&N TREASURY S$80M3.15%180328 BONDS INT 280312 - 270912 3.15% 21-Sep-12 28-Sep-12

SHANGRI-LA ASIA LIMITED DIVIDEND HKD 0.1 25-Sep-12 10-Oct-12

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

TPV TECHNOLOGY LIMITED DIVIDEND USD 0.0046 01-Oct-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

SELECT GROUP LIMITED DIVIDEND SGD 0.005 ONE-TIER TAX 04-Oct-12 22-Oct-12

FRAGRANCE GROUP LIMITED DIVIDEND SGD 0.0005 ONE-TIER TAX 05-Oct-12 18-Oct-12

GENTING SPS$500M5.125% PERPSEC BONDS INT 180412 - 171012 5.125% 11-Oct-12 18-Oct-12

UMS HOLDINGS LIMITED DIVIDEND SGD 0.01 ONE-TIER TAX 11-Oct-12 31-Oct-12

YUEXIU PROPERTY CO LIMITED DIVIDEND HKD 0.042 12-Oct-12 15-Nov-12

UNITED OVERSEAS AUSTRALIA LTD DIVIDEND UNFRANKED,DRP AUD 0.005 15-Oct-12 01-Nov-12

GLOBAL PREMIUM HOTELS LIMITED DIVIDEND SGD 0.002 ONE-TIER TAX 16-Oct-12 30-Oct-12

GUOCOLAND LIMITED DIVIDEND SGD 0.05 ONE-TIER TAX 18-Oct-12 15-Nov-12

GUOCOLEISURE LIMITED DIVIDEND SGD 0.02 22-Oct-12 08-Nov-12

CORDLIFE GROUP LIMITED DIVIDEND SGD 0.018 ONE-TIER TAX 24-Oct-12 14-Nov-12

ELLIPSIZ LTD DIVIDEND SGD 0.0016 ONE-TIER TAX 24-Oct-12 15-Nov-12

BRITISH & MALAYAN TRUSTEES LTD DIVIDEND SGD 0.027 TAX EXEMPT 29-Oct-12 12-Nov-12

KARIN TECHNOLOGY HLDGS LIMITED DIVIDEND HKD 0.071 29-Oct-12 15-Nov-12

BOARDROOM LIMITED DIVIDEND SGD 0.02 ONE-TIER TAX 30-Oct-12 23-Nov-12

SIN GHEE HUAT CORPORATION LTD. DIVIDEND SGD 0.02 ONE-TIER TAX 30-Oct-12 14-Nov-12

AUSGROUP LIMITED DIVIDEND SGD 0.0036 ONE-TIER TAX 31-Oct-12 21-Nov-12

AUSGROUP LIMITED DIVIDEND SGD 0.0064 ONE-TIER TAX 31-Oct-12 21-Nov-12

GEMS TV HOLDINGS LIMITED DIVIDEND SGD 0.0095 31-Oct-12 15-Nov-12

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

KIAN ANN ENGINEERING LTD DIVIDEND SGD 0.0082 ONE-TIER TAX 31-Oct-12 14-Nov-12

RYOBI KISO HOLDINGS LTD. DIVIDEND SGD 0.003 ONE-TIER TAX 31-Oct-12 14-Nov-12

AMTEK ENGINEERING LTD DIVIDEND SGD 0.022 ONE-TIER TAX 01-Nov-12 23-Nov-12

ASL MARINE HOLDINGS LTD DIVIDEND SGD 0.0175 ONE-TIER TAX 01-Nov-12 19-Nov-12

SINGAPURA FINANCE LTD DIVIDEND SGD 0.06 ONE-TIER TAX 01-Nov-12 15-Nov-12

SPINDEX INDUSTRIES LIMITED DIVIDEND SGD 0.018 ONE-TIER TAX 02-Nov-12 19-Nov-12

CHOSEN HOLDINGS LIMITED DIVIDEND SGD 0.0066 ONE-TIER TAX 05-Nov-12 23-Nov-12

F J BENJAMIN HOLDINGS LTD DIVIDEND SGD 0.01 ONE-TIER TAX 05-Nov-12 27-Nov-12

HUPSTEEL LTD DIVIDEND SGD 0.005 ONE-TIER TAX 05-Nov-12 20-Nov-12

EU YAN SANG INTERNATIONAL LTD DIVIDEND SGD 0.01 ONE-TIER TAX 06-Nov-12 23-Nov-12

EU YAN SANG INTERNATIONAL LTD DIVIDEND SGD 0.01 ONE-TIER TAX 06-Nov-12 23-Nov-12

MICRO-MECHANICS (HOLDINGS) LTD DIVIDEND SGD 0.02 ONE-TIER TAX 06-Nov-12 22-Nov-12

OLAM INTERNATIONAL LIMITED DIVIDEND SGD 0.04 ONE-TIER TAX 06-Nov-12 20-Nov-12

PARKSON RETAIL ASIA LIMITED DIVIDEND SGD 0.03 ONE-TIER TAX 06-Nov-12 23-Nov-12

SILVERLAKE AXIS LTD DIVIDEND SGD 0.008 ONE-TIER TAX 07-Nov-12 28-Nov-12

ACE ACHIEVE INFOCOM LIMITED DIVIDEND CNY 0.003 09-Nov-12 28-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

Sources: MasNet, Bloomberg, Business Times, Straits Times and other media

Ple ase refer t o importa nt disclosu r e s a t t h e b a c k of this document. MICA (P) 039/06/2012

Morning Call

14 Sep 2012

Asia Pacific Equity Research | Singapore

MARKET PULSE

Key Idea

Ezion Holdings: S$1b company and growing

The stock of Ezion Holdings (Ezion) has performed very well

in the past few months, rising more than 75% since early

Jun. This has been due to the clinching of contracts at

attractive rates of return, smooth execution of projects, and

commendable earnings. In addition, Ezion may be the first

O&M company in Singapore to list perpetual securities,

projecting management’s strong sense of confidence in the

company’s growth. The proposed listing of Triyards and

increased frequency of LNG-related news reports and

conferences may have also helped sentiment. Ezion has

been our small-mid cap pick since we highlighted it in our

strategy report last year, but it should henceforth be better

classified as a mid-cap counter. We roll forward our

valuation with an unchanged peg of 9x FY13F earnings,

increasing our fair value estimate from S$1.20 to S$1.53.

Maintain BUY with a one-year horizon, but be cautious of a

near-term pull back given the recent run-up.

More reports:

- OSIM International: Strong execution to tide through

uncertainties

News Headlines

• The US Fed has launched a third round of quantitative

easing, saying it will buy US$40b of MBS a month till the

labour market improves. The Dow gained 1.55% to

13,539.86 and the S&P 500 Index rose 1.63% to

1,459.99.

• IHH Healthcare replaces NOL in the Straits Times Index

with effect from 24 Sep 2012.

• Dragon Group Intl will dispose its entire shareholding

interest in a wholly-owned subsidiary. The group is

expected to record a net loss of ~US$4.9m from the

disposal.

• Freight Link’s 1QFY13 net profit doubled to S$6.6m from

S$3.33m a year ago. Revenue rose 18% YoY to

S$44.03m.

• XMH Holdings’ 1QFY13 net profit rose 42% YoY to

S$2.17m. Revenue rose 79% YoY to S$21.92m, mainly

due to clearing of backlog orders.

Key Singapore Indices

Close Chg % Chg

STI 3030.1 0.5 0.0

Catalist 131.6 0.2 0.1

Finance 755.1 -0.9 -0.1

Property 700.7 0.9 0.1

Electronics 576.4 7.7 1.4

Vol(m) 1660.9 106.8 6.9

Val(S$m) 1539.3 284.7 22.7

World Indices

Close Chg % Chg

Dow Jones 13539.9 206.5 1.5

Nasdaq 3155.8 41.5 1.3

S&P500 1460.0 23.4 1.6

FTSE 5819.9 37.8 0.7

KLCI 1628.4 14.6 0.9

Hang Seng 20047.6 -27.8 -0.1

Nikkei 8995.2 35.2 0.4

SET 1257.7 -2.3 -0.2

KOSPI 1950.7 0.7 0.0

TWSE 7578.8 8.4 0.1

Market Statistics (SG)

STI 52-week range 2,522 3,088

No. of gainers 279

No. of losers 227

No. of unchanged 185

Economic Statistics

S$/US$ 1.2 0.0

Yen/US$ 77.6 0.1

3-mth S$ SIBOR 0.4 0.0

3-mth US$ SIBOR 0.4 0.0

Crude futures (US$) 98.1 -0.2

Research Team

(65) 6531 9800

e-mail: [email protected]

OCBC Investment Research

Market Pulse

14 Sep 2012

2

Ezion Holdings: S$1b company and

growing

●Good performance warranted

●Upside still there

●But recent run-up has been fast and

furious

Stock has performed very well for good

reason

The stock of Ezion Holdings (Ezion) has

performed very well in the past few months,

rising more than 75% since early Jun. In

comparison, the STI and the FTSE Oil and

Gas Index have appreciated by about 12%

and 19% respectively over the same period.

YTD, Ezion is up about 92%. The good

showing has been due to the clinching

contracts at attractive rates of return,

smooth execution of projects, and

commendable quarterly earnings.

1st O&M company to issue perpetual

securities

The company recently also proposed a

perpetual securities issue (S$125m of 7.8%

subordinated perps), and if successfully

issued around mid Sep, Ezion will be the first

offshore and marine company in Singapore to

issue such securities. This projects the strong

sense of confidence that management has in

the growth of the company. A good take-up

of the securities would also reflect investors’

faith in the sustainability of the group’s

earnings.

Triyards listing, LNG events also help

sentiment

There is also the possibility that the proposed

listing of Triyards Holdings has helped

sentiment recently due to increased

awareness of the self-elevating unit. We also

note that the frequency of news reports and

the number of LNG conferences has

increased considerably in the past six months

as well. Ezion has, and is likely to continue,

to be a beneficiary of LNG capex.

Now a S$1b company, but upside

potential still there

Ezion Holdings has been our small-mid cap

pick since we highlighted it in our year-end

strategy report last year, but with a market

cap of about S$1b now, it should henceforth

be better classified as a mid-cap counter.

Looking ahead, we roll forward our valuation

with an unchanged peg of 9x FY13F earnings,

and our fair value estimate increases from

S$1.20 to S$1.53. Maintain BUY with a oneyear

horizon, but be cautious of a near-term

pull back given the recent run-up. (Low Pei

Han)

. . . . .

OSIM International: Strong execution to

tide through uncertainties

●Innovation to help buffer macro

slowdown

●Shares +14% since our ‘laggard play’

theme

●Still see value at current levels

Keeping up its new products innovation

drive

We opine that one of OSIM International’s

(OSIM) core strengths lies in its ability to

constantly drive its product innovation. This

has allowed the group to enjoy gross margin

expansion (FY10: 65.3%; FY11: 68.9%;

1H12: 70.2%) from a more favourable

product mix, while enhancing its brand

profile with its novel new products with fresh

design concepts and better functionality.

During 3Q12, OSIM launched the uDivine App

massage chair, an improved version from its

earlier uDivine model. This chair enables

wireless connectivity to Apple Inc.’s mobile

devices; hence users can listen to ambient

music while having an array of 13 massage

programmes to choose from.

Not immune to macro slowdown, but

focusing on margin growth

Although we remain cognisant of the

concerns over the slowdown in China’s

growth engine which could affect consumers’

discretionary spending, we believe that

management would continue to improve its

productivity and rationalise non-performing

outlets besides its innovation drive to

mitigate this. OSIM’s entrenched presence

and experience in China would also allow it to

make more efficient and accurate operational

decisions, in our opinion. Hence we only

make some minor adjustments to our FY12

estimates (revenue: -1.1%; PATMI: -0.9%)

and also ease both our FY13 revenue and

PATMI forecasts by 2.2% as we input more

conservative assumptions.

Reiterating our BUY rating

We highlighted OSIM as a possible laggard

play during our 27 Jul 2012 report. Since

then, its share price has appreciated 13.9%

(even after going ex-div), strongly

OCBC Investment Research

Market Pulse

14 Sep 2012

3

outperforming the STI by 3.1ppt. We still see

value in OSIM’s current share price despite

our reduced forecast. The stock trades at

11.3x and 10.3x FY12F and FY13F PER,

respectively, while offering a projected EPS

CAGR of 13.5% from FY11-13F and ROE of

44.1% (FY12F). Maintain BUY, with a revised

fair value estimate of S$1.79, versus S$1.82

previously (still based on 14.3x blended

FY12/13F EPS). (Wong Teck Ching Andy)

. . . . .

0148 GMT [Dow Jones] Singapore's STI jumps 1.4% to 3073.03, with only one component failing to join the post-FOMC risk-on party. "Bernanke didn't disappoint the market," says Song Seng Wun, head of research at CIMB. "As seen from previous rounds of liquidity injections, markets always like more money," he says. "The low interest rate environment is always positive from a stock market standpoint," he adds; "since his finger is permanently going to be on that trigger, it doesn't require QE four or five." But Song notes, "whether that helps to lift the economy to a more sustainable path of job creation remains to be seen. In that sense, nothing much has changed." He adds, "it's all about, will the economy be able to create jobs. That requires complementary policies on the fiscal front and that's still lacking. Politicians are still relying on central banks to do the job for them." Volume jumps to 411.4 million shares valued at S$416.9 million, suggesting players are putting some skin in the game. The 3088 year-to-date high offers next resistance. Gainers top losers 7.1 to one. Commodity plays, typical risk-on beneficiaries, surge, dominating the top-volume list. Wilmar (F34.SG), Olam (O32.SG), Golden Agri (E5H.SG) and Noble (N21.SG) jump 2.2%-5.0%. GLP (MC0.SG) falls 2.6% to S$2.59 after the company said it didn't know why its stock surged 8.1% Thursday.


 

14 September 2012

Disclaimer:

DMG & Partners Securities Pte Ltd may have received compensation from the companies covered in this report

for its corporate finance or its dealing activities; this report is therefore classified as a non-independent report.

Please refer to important disclosures at the end of this publication.

g

Morning Matters

Figure of the Day

Source: google.com

Refreshing our top picks: yield remain the

focus, buy cyclicals for beta. See Scoop of

the Day.

Market Indices

Value Chg % Chg

Dow Jones 13,539.9 +206.51 +1.55

S&P 500 1,460.0 +23.43 +1.63

Nasdaq 3,155.8 +41.52 +1.33

FTSE 100

5,819.9 +37.84 +0.65

Nikkei 8,995.2 +35.19 +0.39

Hang Seng 20,047.6 -27.76 -0.14

Shanghai 2,110.4 -16.18 -0.76

KOSPI 1,950.7 +0.66 +0.03

STI 3,030.1 +0.48 +0.02

KLCI 1,628.4 +14.62 +0.91

Key Indicators

Value Chg % Chg

Oil Price*

(US$/bbl)

98.31 +1.30 +1.34

Gold Price**

(US$/oz)

1767.04 +36.24 +2.09

US$/S$ 1.225 -0.00 -0.37

* WTI Crude Future

** Gold Spot

While You Were Sleeping

US markets: Positive

Dow futures: +20 (as at 8am Singapore Time)

US Wrap: The major U.S. equity averages soared Thursday after the

Federal Reserve more than fulfilled expectations for another round of

quantitative easing. Not only did the central bank announce an open-ended

plan to purchase $40 billion worth of mortgage-backed securities per month

and extend its pledge to keep interest rates at their zero levels until at least

mid-2015, the central bank also opted to maintain Operation Twist through

the end of the year and said it believes a highly accommodative monetary

policy "will remain appropriate for a considerable time after the economic

recovery strengthens." The Dow Jones Industrial Average closed up more

than 206 points, or 1.55%, at 13,540. The Nasdaq surged nearly 42 points,

or 1.33%, to close at 3156. The S&P 500 jumped more than 23 points, or

1.63%, to settle at 1460, also a multi-year closing high. The benchmark 10-

year Treasury rose 10/32, diluting the yield to 1.727%. The greenback fell

0.56%, according to the dollar index.

The Day Ahead…

Scoop of the Day: Since our Aug 2012 strategy report, the STI has fallen

a marginal 1.7% to 3,012. Amongst our top recommendations, CCT and

OSIM have done particularly well, rising 3.6% and 2.3% m-o-m respectively.

On the other hand, Olam underperformed, but we remain optimistic on

Olam’s food business and reiterate our BUY rating. We have kept our top

picks largely intact, adding Cambridge Industrial Trust on the back of firm

yield and asset-recycling potential for its properties. We continue to see

upside for yield plays on the back of a soft interest rates environment, which

could drive further yield compression for the S-REITs. Our picks include

Cambridge Industrial Trust and CapitaCommercial Trust among REITs,

Olam and Noble on valuation grounds and Keppel Corp for its large O&M

orderbook, which provides earnings visibility through 2015. In the mid-cap

space, we like Hi-P and Osim, both of which are leveraged to the consumer

cycle through product refreshments. Rounding up the list, we also like UOB

and ComfortDelgro among the blue chips for their resilient business models.

Our sum-of-the-parts 12-month STI target of 3,167 factors in EPS growth of

5.3% for FY13 and ROE of 12.3%. Whilst the STI trades at 1.38x P/B, which

is below the historical average of 1.61x, we do not see a reversion to the

historical level anytime soon, as recent weak equity trading volumes

suggest a lack of investors’ risk appetite. (Leng Seng Choon)

WHAT’S INSIDE?

On The Platter

Singapore Market Strategy: Dividend-yield stocks have further upside room

Insider Trade Highlights 13 Sep 12

Diary of Events

14 September 2012

See important disclosures at the end of this publication

2

DMG Research

On the Platter

Singapore Market Strategy: Dividend-yield stocks have further upside room

Leng Seng Choon, CFA (+65 6232 3890, [email protected])

STI target of 3167 – dividend-yield stocks have more upside. Since our Aug 2012 strategy report,

the STI has fallen a marginal 1.7% to 3012 (as of 7 Sep). Amongst our top recommendations

then, CCT and OSIM have done particularly well, rising 3.6% and 2.3% respectively. On the other

hand, Olam underperformed, but we remain optimistic on Olam’s food business and re-iterate

BUY. Whilst we did not remove any stocks from our top BUY list, we added Cambridge Industrial

Trust. This adds emphasis to our bullish stance on dividend yield stocks, on the back of continued

soft interest rates that could lead to further compression of REITs yield. Our sum-of-the-parts 12-

month STI target of 3167 factors in FY13 EPS growth of 5.3% and FY13 ROE (excluding Starhub)

of 12.3%. Whilst the STI trades at 1.38x P/B, which is below the historical average of 1.61x, we do

not see a reversion to the historical level anytime soon, as recent weak equity trading volumes

suggest a lack of investors’ risk appetite. We do not advocate buying stocks across the board, but

be selective in 1) non dividend-yield stock picks on their individual merits and 2) dividend plays.

REITs’ share prices have performed well YTD and seen to strengthen further. REITs yield

compression is line with the fall in 10-year Singapore government bond yield to 1.34%, from Mar

12’s 1.8%. There is some element of flight-to-quality. We see soft interest rates further driving up

the share prices of attractive dividend plays.

14 September 2012

See important disclosures at the end of this publication

3

DMG Research

Company Insider No. of Shares

Share Price

(S$)

% Stake before

transaction

% Stake after

transaction

COGENT HOLDINGS Tan Yeow Khoon 256,000 0.109 68.043 68.096

PERENNIAL CHINA RETAIL TRUST Kuok Khoon Hong 100,000 0.485 17.205 17.214

RAFFLES EDUCATION Oei Hong Leong 8,789,000 na 6.140 7.180

SC GLOBAL DEVELOPMENTS Cheong Sae Peng 4,688,000 1.050 53.930 55.060

STX PAN OCEAN CO STX CORPORATION 1,850,920 na 35.030 35.930

CDW HOLDING Share Buy-Back 100,000 0.095 na 1.690

GLOBAL TESTING CORPORATION Share Buy-Back 341,000 0.064 na 1.480

KINERGY Share Buy-Back 200,000 0.184 na 0.680

OCBC Share Buy-Back 100,000 9.290 na 0.332

SEMBCORP INDUSTRIES Share Buy-Back 130,000 5.499 na 0.030

WILMAR Share Buy-Back 7,388,000 3.000 na 0.115

Company Insider No. of Shares

Share Price

(S$)

% Stake before

transaction

% Stake after

transaction

Sale

LOYZ ENERGY Yip Chee Meng 175,000 0.500 0.063 0.003

SRI TRANG AGRO-INDUSTRY Prasit Panidkul 200,000 0.594 0.611 0.595

# Exercise of Rights issue / Share Options / Convertibles / Warrants / Share Issuance.

## Married deal.

Purchase

INSIDER TRADES HIGHLIGHT FOR 13 Sep 12