Singapore

Wired Daily

Page 4

Substantial Shareholders’ Transactions: 13 Sep – 20 Sep 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

Substant ial Shareholder/ Director

Buy /Sell

/ Conv

No of

Shares

('000)

Price Per

Share $

%Issued

Cap Before

Change

%Issued

Cap A f t er

Change

Pacific Healthcare 20-Sep-12 Pacific Investments Buy 50 - 8.02 8.03

Pacific Healthcare 20-Sep-12 William Chong * Buy 50 0.1 12.39 12.4

Serial System 20-Sep-12 Goh Bak Heng Buy 615 0.1 35.5 35.57

BRC Asia 19-Sep-12 Lim Siak Meng Buy 400 0.14 4.5 4.55

GK Goh 19-Sep-12 Lim Keng J in Sell 54 0.76 0.81 0.8

Serial System 19-Sep-12 Goh Bak Heng Buy 200 0.1 35.48 35.5

TMC Education 19-Sep-12 Chin Kon Yuen * Buy 8 0.07 16.2 16.21

TMC Education 19-Sep-12 Yeow Cheng Khim Buy 8 0.07 16.2 16.21

BRC Asia 18-Sep-12 Lim Siak Meng Buy 600 0.13 4.43 4.5

China Yuanbang Prop 18-Sep-12 Chen J ianfeng * Buy 770 0.09 1.36 1.48

GK Goh 18-Sep-12 Lim Keng J in Sell 43 0.75 0.82 0.81

Haw Par Corp 18-Sep-12 Wee Ee-Chao * Buy 293 6.57 31.07 31.22

Haw Par Corp 18-Sep-12 Wee Ee Lim * Buy 293 6.57 31.01 31.16

Haw Par Corp 18-Sep-12 Wee Cho Yaw * Buy 293 6.57 33.12 33.27

HLN Tech 18-Sep-12 Wa Kok Liang Buy 200682 - 14.26 14.71

HTL Int'l 18-Sep-12 Tay Kheng Hee Sell 10 0.34 0.38 0.38

Hutchison Port Trust 18-Sep-12 The Capital Grp Companies * Sell 35506 - 10.39 9.98

Neo Group 18-Sep-12 Liew Oi Peng * Buy 230 0.34 70.9 71.06

Neo Group 18-Sep-12 Neo Kah Kiat Buy 230 0.34 70.9 71.06

Nordic Group 18-Sep-12 Chang Yeh Hong Buy 531 0.09 51.22 51.35

Pacific Healthcare 18-Sep-12 Pacific Investments Buy 20 - 8.01 8.02

Pacific Healthcare 18-Sep-12 William Chong * Buy 20 0.1 12.38 12.39

Popular Holdings 18-Sep-12 Chou Cheng Ngok * Buy 2714 0.23 57.18 57.5

Popular Holdings 18-Sep-12 World Holdings Pte Ltd Buy 2714 - 56.93 57.25

Popular Holdings 18-Sep-12 Chou Cheng Ngok * Buy 1200 0.23 57.03 57.18

8Telecom Int'l 17-Sep-12 Ye Tianyun Buy 100 0.14 2.64 2.66

Action Asia 17-Sep-12 J ack Li * Sell 139 0.14 0.03 0

BRC Asia 17-Sep-12 Sia Ling Sing * Buy 1103 0.13 27.58 27.71

BRC Asia 17-Sep-12 Lingco Marine * Buy 1103 0.13 5.49 5.62

BRC Asia 17-Sep-12 Lingco Hldgs Buy 1103 - 5.49 5.62

Cosmosteel Hldgs 17-Sep-12 Ong Chin Sum Buy 333 0.17 20.96 21.08

Ley Choon Grp 17-Sep-12 Toh Chew Leong * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Toh Swee Kim * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Toh Choo Huat * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Seow Soon Kee * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Toh Chew Chai * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Zheng Choon Hldg Buy 1426 0.22 62.02 62.31

Neo Group 17-Sep-12 Liew Oi Peng * Buy 352 0.33 70.66 70.9

Neo Group 17-Sep-12 Neo Kah Kiat Buy 352 0.33 70.66 70.9

San Teh 17-Sep-12 Gui Kim Young Buy 200 0.3 0.15 0.2

Select Group 17-Sep-12 Go Mei Lin Buy 1349 - 7.06 8.01

TMC Education 17-Sep-12 Chin Kon Yuen * Buy 1 0.07 16.2 16.2

TMC Education 17-Sep-12 Chin Kon Yuen Buy 1 0.07 16.2 16.2

Singapore

Wired Daily

Page 4

Substantial Shareholders’ Transactions: 13 Sep – 20 Sep 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

Substant ial Shareholder/ Director

Buy /Sell

/ Conv

No of

Shares

('000)

Price Per

Share $

%Issued

Cap Before

Change

%Issued

Cap A f t er

Change

Pacific Healthcare 20-Sep-12 Pacific Investments Buy 50 - 8.02 8.03

Pacific Healthcare 20-Sep-12 William Chong * Buy 50 0.1 12.39 12.4

Serial System 20-Sep-12 Goh Bak Heng Buy 615 0.1 35.5 35.57

BRC Asia 19-Sep-12 Lim Siak Meng Buy 400 0.14 4.5 4.55

GK Goh 19-Sep-12 Lim Keng J in Sell 54 0.76 0.81 0.8

Serial System 19-Sep-12 Goh Bak Heng Buy 200 0.1 35.48 35.5

TMC Education 19-Sep-12 Chin Kon Yuen * Buy 8 0.07 16.2 16.21

TMC Education 19-Sep-12 Yeow Cheng Khim Buy 8 0.07 16.2 16.21

BRC Asia 18-Sep-12 Lim Siak Meng Buy 600 0.13 4.43 4.5

China Yuanbang Prop 18-Sep-12 Chen J ianfeng * Buy 770 0.09 1.36 1.48

GK Goh 18-Sep-12 Lim Keng J in Sell 43 0.75 0.82 0.81

Haw Par Corp 18-Sep-12 Wee Ee-Chao * Buy 293 6.57 31.07 31.22

Haw Par Corp 18-Sep-12 Wee Ee Lim * Buy 293 6.57 31.01 31.16

Haw Par Corp 18-Sep-12 Wee Cho Yaw * Buy 293 6.57 33.12 33.27

HLN Tech 18-Sep-12 Wa Kok Liang Buy 200682 - 14.26 14.71

HTL Int'l 18-Sep-12 Tay Kheng Hee Sell 10 0.34 0.38 0.38

Hutchison Port Trust 18-Sep-12 The Capital Grp Companies * Sell 35506 - 10.39 9.98

Neo Group 18-Sep-12 Liew Oi Peng * Buy 230 0.34 70.9 71.06

Neo Group 18-Sep-12 Neo Kah Kiat Buy 230 0.34 70.9 71.06

Nordic Group 18-Sep-12 Chang Yeh Hong Buy 531 0.09 51.22 51.35

Pacific Healthcare 18-Sep-12 Pacific Investments Buy 20 - 8.01 8.02

Pacific Healthcare 18-Sep-12 William Chong * Buy 20 0.1 12.38 12.39

Popular Holdings 18-Sep-12 Chou Cheng Ngok * Buy 2714 0.23 57.18 57.5

Popular Holdings 18-Sep-12 World Holdings Pte Ltd Buy 2714 - 56.93 57.25

Popular Holdings 18-Sep-12 Chou Cheng Ngok * Buy 1200 0.23 57.03 57.18

8Telecom Int'l 17-Sep-12 Ye Tianyun Buy 100 0.14 2.64 2.66

Action Asia 17-Sep-12 J ack Li * Sell 139 0.14 0.03 0

BRC Asia 17-Sep-12 Sia Ling Sing * Buy 1103 0.13 27.58 27.71

BRC Asia 17-Sep-12 Lingco Marine * Buy 1103 0.13 5.49 5.62

BRC Asia 17-Sep-12 Lingco Hldgs Buy 1103 - 5.49 5.62

Cosmosteel Hldgs 17-Sep-12 Ong Chin Sum Buy 333 0.17 20.96 21.08

Ley Choon Grp 17-Sep-12 Toh Chew Leong * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Toh Swee Kim * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Toh Choo Huat * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Seow Soon Kee * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Toh Chew Chai * Buy 1426 0.22 62.02 62.31

Ley Choon Grp 17-Sep-12 Zheng Choon Hldg Buy 1426 0.22 62.02 62.31

Neo Group 17-Sep-12 Liew Oi Peng * Buy 352 0.33 70.66 70.9

Neo Group 17-Sep-12 Neo Kah Kiat Buy 352 0.33 70.66 70.9

San Teh 17-Sep-12 Gui Kim Young Buy 200 0.3 0.15 0.2

Select Group 17-Sep-12 Go Mei Lin Buy 1349 - 7.06 8.01

TMC Education 17-Sep-12 Chin Kon Yuen * Buy 1 0.07 16.2 16.2

TMC Education 17-Sep-12 Chin Kon Yuen Buy 1 0.07 16.2 16.2

Singapore

Wired Daily

Page 6

Announced Dividends and Capital Issues: 1 Oct 2012 – 14 Dec 2012 (by Ex-Date)

Company Type Particulars Ex Date Paid/ Payable

TPV TECHNOLOGY LIMITED DIVIDEND USD 0.0046 01-Oct-12 12-Oct-12

JB FOODS LIMITED DIVIDEND SGD 0.01 ONE-TIER TAX 03-Oct-12 17-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

P99 HOLDINGS LIMITED ENTITL. SHARE CONSOL OFFER OF 1 FOR 5 03-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

ASPIAL CORPORATION LIMITED DIVIDEND SCRIPDIVSCHEME SGD 0.0075 ONE-TIER TAX 08-Oct-12 27-Nov-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

PERTAMA HOLDINGS LIMITED DIVIDEND SGD 0.0152 ONE-TIER TAX 01-Nov-12 16-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

PEC LTD. DIVIDEND SGD 0.025 ONE-TIER TAX 08-Nov-12 26-Nov-12

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

TEE INTERNATIONAL LIMITED DIVIDEND SGD 0.0125 ONE-TIER TAX 20-Nov-12 03-Dec-12

NX09100W 190601 INTEREST 2.50% 22-Nov-12 03-Dec-12

NX11100X 210601 INTEREST 2.25% 22-Nov-12 03-Dec-12

TEE INTERNATIONAL LIMITED DIVIDEND SGD 0.005 ONE-TIER TAX 14-Dec-12 28-Dec-12

Source: SGX

Concerns about the Singapore economy dipping into a

technical recession in 3Q and anticipation of a generally

lack lustre results season is likely to contain the STI

around the 3100 mark in the short-term, which is close

to the current 13.26x (-0.5SD) FY13F PE level of 3123.

Investors should maintain their exposure in yield plays

given the uncertain global economic outlook and low

interest rate environment. Among the S-REITs, we

continue to like Suntec REIT, Fraser Commercial Trust

and Fraser Centrepoint Trust. Sieving further, K-REIT,

CapitaRetail China Trust and Far East Hospitality Trust

are 3 more S-REITs that offer at least 6% upside to TP

and with at least 5% yield. For investors seeking stability

and yield, we think SingTel shares’ knee jerk reaction to

Temasek Holding’s sale opens up an opportunity to

accumulate the stock at just marginally below $3.20.

With the global economy still shrouded with

uncertainties, investors looking to take on more risks are

likely to still turn towards the O&M sector given their

better earnings visibility. Our recent SMC O&M picks

(Ezion, Nam Cheong, ASL Marine and STX OSV) have

done well, some (eg Ezion) much better than others.

Within them, we think it’s time now to look at (or switch

to) ASL Marine given its strong forward EPS growth,

attractive forward PE and ample upside to TP.

While interest faded for the large cap yards Keppel Corp

and SembCorp Marine during the past month, we think

it’s only a matter of time before they return. This is

because both stocks still offer ample upside of at least

15% to their TP and it was their record order wins in

August that sparked off investors’ interest in the sector

Singapore Traders Spectrum

Wired Weekly

Page 2

Between the 2 companies, we have a slight preference for

SembCorp Marine over Keppel Corp because the former is a

pure O&M play.

Noting the trend of a weak global manufacturing output

through 3Q, avoid stocks exposed to manufacturing,

technology and global trade as companies are more likely to

report lack lustre 3Q results. Stocks in the

manufacturing/technology (e.g. Amtek Engineering,

Broadway and Venture Corp) sectors as well as those

exposed to global trade (NOL & Cosco Corp) are likely to

continue their lack lustre performance as the 3Q results

season draws closer.

Finally, the decline in CPO price from RM3140/MT to

RM2400/MT through 3Q could be a dampener on upstream

CPO planters ahead of the 3Q results season. Avoid First

Resources, Indofood Agri and Kencana Agri.

In the shadow of the 3Q results season and technical

recession risk

Concerns about the Singapore economy dipping into a

technical recession in 3Q and anticipation of a generally lack

lustre results season is likely to contain the STI around the

3100 mark in the short-term. The hunt for yield plays is likely

to continue. Interest among cyclical stocks is likely to still

swirl around the O&M sector with their better earnings

visibility while stocks tied to global trade, electronics and

manufacturing are likely to be shunted aside during this

period.

Our Singapore economist thinks a technical recession is in

store for Singapore after August industrial production fell

2.3% m-o-m (-2.2% y-o-y). Dragged down by the

electronics and transport engineering sub-sectors, the figure

was worse than his forecast for a 2% m-o-m (+3.2% y-o-y)

gain. Singapore 2Q GDP had declined 1.1% on a q-o-q basis.

Our economist forewarns that this weaker than expected

August IP could seal the fate for a technical recession in 3Q

even if it’s a brief one.

The 3Q results season looms in October. This is likely to pull

some investors back into the side-lines on the concern that

the global economic slowdown that continues to manifest

itself through the third quarter will filter down to corporate

earnings. STI had rallied 13% since early June on optimism

that central banks will pull out all the stops to prevent the

Eurozone crisis and the ailing US job and housing markets

from worsening. The FED’s QE3 and ECB’s OMT answered

investors’ hopes.

At 3060, STI trades at 13X (slightly below -0.5SD) FY13F PE.

With the global economy still shrouded with uncertainties,

we do not see the STI heading above the current 13.26x (-

0.5SD) FY13F PE level of 3123. That is, STI is likely to hover

around the 3100 immediate resistance level at best in the

short-term heading towards the 3Q results season.

STI at various forward PE levels

-2sd

10.65x PE

-1.5sd

11.52x PE

-1 sd

12.39x PE

-0.5 sd

13.26x PE

Avg

14.13x PE

+0.5 sd

15.0x PE

FY 13 2,508 2,713 2,918 3,123 3,328 3,533

Source: DBS Research

Still seeking yield

Investors should maintain their exposure in yield trades given

the uncertain global economic outlook and low interest rate

environment (FED to keep interest rates near zero till mid-

2015).

Among the S-REITs, we continue to like Suntec REIT, Fraser

Commercial Trust and Fraser Centrepoint Trust. Suntec REIT

remains one of the cheaper S-REITs, offering an attractive

0.8x P/BV and FY12-13F yields of 6%. Fraser Commercial

Trust also trades at an attractive 0.8x P/BV with potential

rerating catalysts from the sale proceeds of Keypoint in April.

Fraser Centrepoint Trust’s re-rating catalysts will hinge on

the acquisition of Changi City Point.

Sieving further among the S-REITs with a Buy

recommendation, offer at least 6% upside to our

fundamental target price and with a yield of at least 5%, 3

more names appear – K-REIT, CapitaRetail China Trust and

Far East Hospitality Trust.

Singapore Traders Spectrum

Wired Weekly

Page 3

S-REITs picks

Company

Price

($)

Target

Price

Target

Return

Mkt

Cap

(S$m)

Div

Yield

12 (%)

P/BV

11

(x)

Suntec REIT 1.49 1.67 12.5 3,331 6.0 0.8

K-Reit 1.19 1.28 8.2 3,111 6.4 0.6

CapitaRetail China Trust 1.47 1.57 7.2 1,012 6.3 1.1

Frasers Commercial Trust 1.18 1.26 7.0 756 5.4 0.8

Frasers Centrepoint Trust 1.81 1.93 6.6 1,490 5.2 1.3

Far East Hospitality Trust 1.04 1.10 6.3 1,660 5.7 1.1

Source: DBS Research

SingTel – Temasek’s sale opens opportunity to accumulate

at slightly below $3.20

SingTel shares fell last week on news that Temasek Holdings

sold a 2.5% stake for SGD1.28bil or 400mil shares at

$3.20/share. We think SingTel shares’ knee jerk reaction

opens up an opportunity to accumulate the stock at

marginally below the sale price of $3.20. History has shown

this to be so.

The table below shows SingTel’s share price reaction since

2004 during the past few times that Temasek Holdings

reduced their stake. We observe the following:

1. The stock will ‘gap-down’ on the day that the sale was

made. This is because the selling price is typically below

the prior day’s closing price. However, further shortterm

reaction to the downside below the sale price is

limited to just a few cents below.

2. After a period of base building around the selling price

level, the stock has a tendency to rise to at least close

the downside ‘gap’, if not more.

Going by these 2 observations, investors with a 3-mth

horizon should look to accumulate the stock at just slightly

below $3.20. The hunt for yield should also limit the

downside for SingTel shares. At $3.20, SingTel shares yield

5.3% FY12F based on our analyst forecast. This lifts the yield

of SingTel shares closer to the FY12F yield of 5.4% offered

by M1 and 5.6% offered by Starhub, based on our analyst

forecast.

Temasek Holdings sale of SingTel shares since 2004

Date

Price

sold

($)

Qty

sold

(mil)

Prior

day

close

($)

Post 3-mth high Post 2-wk reaction low

level % level %

07-Jan-04 1.95 391.96 2.05 2.47 26.7% 1.9 -2.6%

05-Nov-04 2.36 339 2.45 2.63 11.4% 2.3 -2.5%

21-Mar-06 2.66 770 2.8 2.79 4.9% 2.61 -1.9%

26-Sep-12 3.2 400 3.33

Source: DBS Research

Earnings visibility still underpins O&M sector

We think the current interest in O&M stocks that was

ignited by the recent steady stream of contract wins can

continue. With the global economy still shrouded with

uncertainties, investors looking to take on more risks are

likely to still turn towards the O&M sector given their better

earnings visibility.

Our Wired Weekly Aug 27th call for the interest in large cap

rig builders to spill into the SMC O&M segment has been

proven right. Our picks Ezion, STX OSV, Nam Cheong, ASL

Maine and Ausgroup have all done well. The top 2

performers are Ezion and Kreuz, gaining 27% and 24%

respectively since August 24th. Separately, AusGroup surged

20% last week on news of its plan to demerge its

subsidiaries into a group headed by wholly owned subsidiary

AGC Australia, which will than seek a listing on the ASX.

With the recent rally, upside potential to our fundamental TP

for Kreuz has greatly narrowed to a mere 5% while that for

Nam Cheong, although still sufficient, is reduced to 10%.

Within the 5 SMC O&M picks, we think it’s time now to

look at (or switch to) ASL Marine because:

1. It boasts of the 2nd highest EPS growth of nearly 41%

for FY13F, which is second only to Ezion’s FY13F

growth of 65%.

Singapore Traders Spectrum

Wired Weekly

Page 4

2. Yet, the stock trades at a mere 6.2X FY13F PE.

3. Finally, it still offers a very handsome 24% upside to

fundamental TP. This is again second highest next to

Ezion’s 28%.

Shares of ASL Marine rose to and have been pressed around

the $0.67 immediate resistance level for nearly 2 weeks. This

is in-line with our technical view for a first move to re-test

this YTD high level. Look for further gains to $0.75 followed

by $0.80.

Share prices for the large cap SembCorp Marine and Keppel

Corp were unchanged during the past month as focus

turned to the SMCs. Both stocks continue to offer good

upside potential to their fundamental TP. As the current

interest in the O&M sector is sparked by the record order

wins from both Keppel Corp and SembCorp Marine in

August, we think it’s only a matter of time before interest

returns to these 2 stocks. Between the 2 companies, we

have a slight preference for SembCorp Marine over Keppel

Corp because the former is a pure O&M play. SembCorp

Marine shares also appear ‘well rested’ as the stock price

currently hugs the 65-day exponential moving average

support at $4.96.

O&M stocks

Company

Price

($)

Price

change

since

Aug24

Target

Price

($)

Target

Return

(%)

Mkt

Cap

(S$m)

PER

12

(x)

PER

13

(x)

EPS

Growth

13 (%)

Div

Yield

12

(%)

Net

Debt /

Equity

12 (%)

P/BV

11

(x)

Small-Mid Cap

Ezion 1.35 27% 1.72 27.9 1,145 14.4 8.8 64.9 0.1 0.9 3.4

ASL Marine 0.67 9% 0.83 24.1 281 8.7 6.2 40.8 2.3 0.7 0.8

Nam Cheong 0.22 15% 0.24 10.3 411 8.3 6.6 25.9 1.2 0.5 2.2

STX OSV 1.63 8% 2.00 23.1 1,918 8.5 9.9 -14.2 9.1 0.3 2.6

Large Cap

SembCorp Marine 4.97 -1% 5.85 17.7 10,374 15.7 13.4 17.4 4.4 cash 4.3

Keppel Corp 11.40 0% 13.20 15.8 20,476 11.9 12.5 -4.9 4.2 0.2 2.7

Source: DBS Research

Avoid stocks exposed to weak global trade

Avoid stocks exposed to manufacturing, technology and

global trade as companies are more likely to report lack

lustre 3Q results. Eurozone nations continued to struggle

with recession risk in recent months as austerity measures

exert their toll while the US economy felt the drag from a

sub-par growth pace of less than 2% and the weak labour

market. Meanwhile, rather than opting for broad based

stimulus that is similar to 2008/09 GFC, China chose to

adopt a prudent monetary policy with focused FAI in

selective sectors. As a result, the weak global PMI and

industrial output trend continued through 3Q.

Stocks in the manufacturing/technology (e.g. Amtek

Engineering, Broadway and Venture Corp) sectors as well as

those exposed to global trade (NOL & Cosco Corp) are likely

to continue their lack lustre performance as the 3Q results

season draws closer.

Singapore Traders Spectrum

Wired Weekly

Page 5

Likely lack lustre upcoming results

Company Price

($)

Target

Price

Target

Return

Mkt

Cap

(S$m)

Rcmd

PER

12

(x)

PER

13

(x)

Div

Yield 12

(%)

Net Debt

/ Equity

12 (%)

P/BV

11

(x)

NOL 1.13 1.23 8.8 2,922 Hold nm 11.5 0.0 1.1 0.9

Venture Corp 8.05 8.15 1.2 2,209 Hold 14.2 13.6 6.8 cash 1.2

Cosco Corp 0.97 0.88 -9.0 2,161 FV 17.7 14.9 2.8 0.6 1.7

Amtek Engineering 0.61 0.66 9.0 329 Hold 7.9 7.3 7.4 0.1 1.7

Broadway 0.37 0.38 3.2 152 Hold 9.6 7.4 4.1 0.6 0.7

Source: DBS Research

The decline in CPO price from RM3140/MT to RM2400/MT

through 3Q puts a dampener on upstream CPO planters.

The weakness came on the back of an anticipated high

inventory from Malaysia during the Sept-Oct peak harvesting

season, before supply can ease again. Avoid First Resources,

Indofood Agri and Kencana Agri. Bumitama remains our

sector pick despite this near term moderation in CPO prices.

The strong 20% p.a. growth in CPO output over the next 3

years mitigates the impact of weak CPO price.

3 upstream CPO stocks to avoid

Company Price

($)

Target

Price

Target

Return

Mkt

Cap

(S$m)

Rcmd

PER

12

(x)

PER

13

(x)

Net Debt

/ Equity

12 (%)

P/BV

11

(x)

First Resources 2.11 2.15 1.9 3,342 Hold 13.5 10.3 cash 2.8

Indofood Agri 1.37 1.40 2.6 1,961 Hold 13.1 11.3 cash 1.2

Kencana Agri 0.34 0.33 -2.9 390 FV 20.7 12.3 0.7 1.4

Source: DBS Research

Singapore Traders Spectrum

Wired Weekly

Page 6

Top large and small / mid cap picks for the coming week

* : technical target

Source: DBSV Research

We have switched out of Nam Cheong into ASL Marine.

Nam Cheong has done well since we first highlighted. ASL

Marine is trading at attractive PE with strong EPS growth.

The group has strong order book for FY13F/FY14F, focus on

OSV in O&G for earnings turnaround.

TOP LARGE CAP PICKS

Company Recom Price

Ta rge t

Price

Upside Catalys t

Keppel Corp Buy 11.40 13.20 16% 1) Key beneficiary to ride the tightening rig market, with its solid

execution track record and market leading position in jackups and

semisubmersibles.

2) Valuation undemanding at about 12x PE with a dividend y ield of

about 4%.

SembCorp Marine Buy 4.97 5.85 18% 1) Expect earnings to pick up over FY12 as orderbook recognition picks

up pace.

2) Purest O&M plays and a prime beneficiary of the upcycle in semisubs,

with potential catalysts from Petrobras contracts.

Noble Group Buy 1.325 1.53 * 15% 1) Undervalued relative to peers – superior EPS growth but lowest PE.

2) Bombed out stock - share price down >50% from peak in J an 11.

Capitamall Asia Buy 1.650 2.08 26% 1) Key beneficiary of rising consumption and urbanization in Asia.

2) Gradual ramp up of operational malls to underpin earnings v isibility .

3) Significant deployment of balance sheet into new investments has

extended the group earnings and growth v isibility .

CapitaLand Buy 3.180 3.42 7% 1) New property releases to boost profits from FY13 onwards.

2) Diversified business exposure.

3) Trading at 40% discount to RNAV.

TOP SMALL / MID CAP PICKS

Company Recom Price

Ta rge t

Price

Upside Catalys t

STX OSV Holdings Buy 1.625 2.00 23% 1) F ront line beneficiary of recovery in subsea market.

2) Recent price weakness triggers buy opportunity.

Bumitama Agri Buy 1.100 1.30 18% 1) In a strong growth phase, offering FY11-14F earnings CAGR of

29%.

2) Plantable reserves of c.63k ha to support expansion to FY15F.

3) Well positioned against refining overcapacity in Indonesia and CPO

price weakness.

ASL Marine Holdings Buy 0.665 0.83 24% 1. Strong EPS growth of nearly 41% for FY13F .

2)Trades at attractive 6.2X FY13F PE.

3) Strong order book for FY13F/FY14F, focus on OSV in O&G for

earnings turnaround.

Tiger Airways Buy 0.755 0.90 19% 1) Demand finally caught up with capacity expansion in Singapore.

2) Tiger Australia ramping up services to pre-grounding scale.

3) J et fuel price currently about 12% lower than peak in early 2012.

Singapore Traders Spectrum

Wired Weekly

Page 7

Major research reports released last week

Source: DBSV Research

Company / Sector Recommendation Target Price ($) Key Points

Far East Hospitality Trust BUY (Initiating Coverage) S$ 1.10 1) Pure exposure into Singapore hospitality sector

2) Industry leader with attractive earnings growth potential and acquisition

pipeline that can grow rooms by 49%

3) Initiate with BUY, TP S$1.10 offering total return of 12%

Yoma Strategic Holdings BUY (Initiating Coverage) S$ 0.60 1) Initiate Buy for potential return of 25% to TP of S$0.60, based on parity to

RNAV

2) Earnings growth from property sales is strong and would get stronger given

limited supply in the market against overwhelming demand

3) Acquisitions and partnerships would drive upsides; political & dilutive fundraising

exercise are key risks

Ezion Holdings BUY S$ 1.72 (Prev S$ 1.42) 1) Two new projects worth US$283m lift YTD wins to >US$1bn

2) Sufficient cash from perpetual issue to fund two more liftboat projects

3) Stronger earnings trajectory; 39% FY11-14F EPS CAGR

4) Maintain BUY, with TP raised to S$1.72

Tiger Airways Holdings BUY S$ 0.90 (Prev S$ 0.92) 1) Operations turning around in Australia as daily sectors rebound to presuspension

levels

2) Singapore was already back in the black last quarter but Australia’s

financial recovery will be dampened somewhat by ongoing price war

3) Permanent CEO will further steady the ship; fresh ideas should add impetus

for growth

4) Maintain BUY, TP S$0.90 (12x FYE Mar14 PE)