DJ MARKET TALK: Singapore's STI Likely To Fall; 3020-3060 Likely 

0052 GMT [Dow Jones] Singapore's STI is likely to open lower, after Wall Street's sharp drop Tuesday on earnings concerns, but it's not likely to match the magnitude of U.S. falls, tracking less extreme declines in regional markets. "We have repeatedly cautioned clients that for the rally to sustain, apart from asset reflation via central bank easing, corporate earnings as well as macro fundamentals will need to improve - which on the contrary have disappointed thus far," says Ng Weiwen, macro analyst at Phillip Securities, in a note. Traders may need to digest how the poor U.S. earnings prognosticate for local companies, with Singapore's earnings season barely off the ground. The STI ended Tuesday up 0.2% at 3050.93; it's likely to remain within a 3020-3060 range. FN (F99.SG) will likely remain in focus, with OUE (LJ3.SG) still mum on whether it will counterbid for the Singapore conglomerate players will likely watch any large F&N trades for cues on how big any offer might be. Ascott Residence Trust's (A68U.SG) 3Q12 DPU rose 0.4% on-year to 2.24 Singapore cents. Mapletree Industrial Trust's (ME8U.SG) fiscal-2Q13 DPU rose 1.3% on-year to 2.29 Singapore cents. Osim (O23.SG) reported 3Q12 profit-after-tax rose 49% on-year to S$20 million. GLP (MC0.SG) signed two leases for a total 55,000sqm, in Xian, China, with its first development there fully leased upon completion

 

Singapore

Wired Daily

Going forward, contribution from the newly acquired Ascott Guangzhou and Ascott Raffles Place is expected to increase ART’s revenue contribution to 44% (vs 39% currently). In addition, we continue to see growth

prospects coming from proposed asset enhancement plans at various properties in Europe and Indonesia, which

should contribute positively when completed progressively

4Q13-1Q14. ART continue to offer an attractive yield of between 6.6-6.9%, above the S-REIT average yield of close to 5.6%. Our BUY call is maintained, TP raised to S$1.39 (from $1.29)

Frasers Centrepoint Trust reported in line results. Topline and NPI grew by about 14% and 13% respectively. Causeway Point AEI is on track to open at the end of the year and occupancy is expected to improve sequentially going forward. Stock remains attractive for its defensive earnings profile. We have raised our DCF-backed TP by

5.6% and FY13/14 DPU by 3-5% to account for the better than expected rental achieved at Anchorpoint and Yew

Tee Point, higher FY13 occupancy assumption of

Causeway Point (estimated at 98% vs 95% previously) and the adjustment for the lease expiry profile of various malls. TP increased to $2.04 ($1.93)

CapitaRetail China Trust reported 3Q results in line with expectations. DPU for 3Q came in at 2.42 cents

representing an increase of 14.2% y-oy. 9M DPU makes up 77% of our forecast. We raise our TP by 6.3% and FY12/13 DPU by 4.4%-6.6% to account for the better- than expected rent. While FY13/14 yield remains attractive at 6.0-6.5%, we believe much of the positives have been priced in with the REIT trading at 1.27x P/BV vs the Asian retail average at 1.15x. Our analyst downgrades the stock to HOLD on valuation grounds as upside to TP is limited.

OKP’s headline 3Q12 earnings of S$2.4m (-50% y-o-y) was below expectation due to slower than expected order wins, higher labour costs and a one off provision of S$1.4m on doubtful receivables. We trim our FY13F gross margin assumptions from 26% to 25% given higher labour costs and competition. FY13F net profit is also reduced by 14%. With forecast earnings expected to drop by 53% in FY12F, we cut our TP to 49cts. Dividend yield is no longer

attractive at a forecast 3.7% for FY12. Maintain HOLD.

Mapletree Industrial’s 2Q13 DPU of 2.29 Scts is in line. Gross revenue and net property income of S$68.9m and S$48.4m is higher by 15.6% and 17.8% y-o-y respectively. The stronger performance was largely attributed to the contribution from it’s the acquisition portfolio, supported by continued positive rental reversions, high occupancy levels for its various key property segments. More details post results briefing.

Overseas-Chinese Banking Corp 16-Oct-12 Share Buy-Back 50,000 9.320

Cogent Holdings 10-Oct-12 Tan Yeow Khoon * Buy 430 0.11 2.1 2.19

Stamford Tyres 10-Oct-12 Dawn Wee * Buy 113 0.33 31.58 31.63

Stamford Tyres 10-Oct-12 Wee Kok Wah * Buy 113 0.33 16.29 16.34

Swissco Hldgs 10-Oct-12 Yeo Chong Lin Buy 3169 - 6.28 7.01

TA Corp 10-Oct-12 Koh Wee Seng Buy 250 - 8.57 8.62

Cogent Holdings 09-Oct-12 Tan Yeow Khoon Buy 250 0.12 2.04 2.1

Samko Timber 09-Oct-12 Sampoerna Forestry Buy 315 - 39.79 39.81

SingTel 09-Oct-12 Chua Sock Koong * Buy 1124 3.2 0.09 0.09

Sound Global 09-Oct-12 Wen Yibo Buy 1931 0.52 0.46 0.61

Stamford Tyres 09-Oct-12 Dawn Wee * Buy 9 0.33 31.58 31.58

Stamford Tyres 09-Oct-12 Wee Kok Wah Buy 9 0.33 16.28 16.29

Swissco Holdings 09-Oct-12 Yeo Chong Lin Buy 5410 - 5.03 6.28

TA Corp 09-Oct-12 Koh Wee Seng Buy 162 - 8.54 8.57

Venture Corp 09-Oct-12 Aberdeen Int'l Fd Mgrs * Buy 360 - 6.89 7.02

Venture Corp 09-Oct-12 Aberdn Asst Mgt PLC &sub * Buy 360 - 23.95 24.08

Aussino Group 08-Oct-12 Samcorp Capital Corp Sell 10668 - 34.06 30.55

Aussino Group 08-Oct-12 Anthony Lim * Sell 10668 0.13 34.23 30.71

Jasper Investments 08-Oct-12 Geoffrey Yeoh Sell 1200 0.06 1.4 1.37

OnionTech 08-Oct-12 Leong Hong Kah Buy 168 - 5.1 5.21

Stamford Tyres 08-Oct-12 Dawn Wee * Buy 70 0.33 31.55 31.58

Stamford Tyres 08-Oct-12 Wee Kok Wah Buy 70 0.33 16.26 16.29

TA Corp 08-Oct-12 Koh Wee Seng Buy 1000 - 8.32 8.54

8Telecom Intl Hldgs 05-Oct-12 Yeo See Meng * Buy 198 0.13 2.63 2.67

Aussino Group 05-Oct-12 Samcorp Capital Corp Sell 15334 - 39.12 34.06

Aussino Group 05-Oct-12 Anthony Lim * Sell 15334 0.14 39.29 34.23

Jason Parquet 05-Oct-12 Yap Koon Hong * Buy 263 - 9.24 9.49

TA Corp 05-Oct-12 Koh Wee Seng Buy 881 - 8.13 8.32

Wilmar Int'l 05-Oct-12 Martua Sitorus * Buy 2000 3.18 10.1 10.14

Blumont Group 04-Oct-12 Chan Kern Ming * Sell 108992 - 6.44 0

BRC Asia 04-Oct-12 Lim Siak Meng Buy 1037 0.14 4.64 4.76

China Essence 04-Oct-12 Sanlam Universal Fund PLC Sell 540 - 8.1 7.97

Fraser and Neave 04-Oct-12 M&G Securities * Sell 10145 - 5.02 4.32

Fraser and Neave 04-Oct-12 MAGIM, M&G Ltd, M&G Grp * Sell 10333 - 5.22 4.49

Jason Parquet 04-Oct-12 Yap Koon Hong Buy 7432 0.25 2.08 8.96

Jason Parquet 04-Oct-12 Yap Koon Hong * Buy 300 - 8.96 9.24

Khong Guan Flour 04-Oct-12 Goh Tee Kia * Buy 54 - 7.56 7.77

Oceanus Group 04-Oct-12 Yu De Hua * Sell 24559 - 7.95 6.99

Stamford Tyres 04-Oct-12 Dawn Wee * Buy 20 0.33 31.54 31.55

Stamford Tyres 04-Oct-12 Wee Kok Wah Buy 20 0.33 16.25 16.26

TA Corp 04-Oct-12 Koh Wee Seng Buy 457 - 8.03 8.13

TA Corp 04-Oct-12 Koh Wee Seng Buy 950 - 7.83 8.03

Yanlord Land Grp 04-Oct-12 Aberden Asst Mgt PLC &sub * Buy 1365 - 5.96 6.03

Deemed Interest

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

Source: SGX

Asia Pacific Daily

See important disclosures, including any required research certifications, beginning on page 59.

24 October 2012

Company Roadshows

Date Company Event Venue

26 Oct Gamevil (063080 KS) NDR US

29 Oct -

2 Nov

Ginko International (8406 TT) NDR Europe

30 Oct Bonjour (653 HK) Luncheon HK

30 Oct Bonjour (653 HK) Video Con. SG

31 Oct -

7 Nov

ASM Pacific (522 HK) NDR Europe

5 - 9 Nov Great Wall Motor (2333 HK) NDR Europe

7 - 8 Nov Acer (2353 TT) NDR HK

26 - 30 Nov Seegene (096530 KS) NDR US

30 Nov -

5 Dec

Lippo Karawaci (LPKR IJ) NDR US

3 - 7 Dec Daelim Industrial (000210 KS) NDR US

10 Dec Chow Tai Fook (1929 HK) NDR HK

10 - 14 Dec Chunghwa Telecom (2412 TT) NDR US

Daiwa Asian Events

Date Company Venue

13 - 16 Nov Daiwa Investment Conference Hong Kong

2012

HK

Source: Daiwa

Regional indices

Performance chg

(%)

EPS growth

(%)

PER

(x)

Market 1D 1M YTD 12E 13E 12E 13E

HSI 0.7 4.6 17.7 (1.4) 6.8 10.9 10.2

HSCEI 0.6 9.6 8.1 5.2 4.8 7.4 7.1

SENSEX* (0.4) (0.2) 21.1 10.3 13.7 14.6** 12.8**

KOSPI (0.8) (3.8) 5.5 29.1 20.6 10.3 8.6

TWSE (0.5) (5.4) 3.8 7.0 23.2 17.5 14.2

FSSTI 0.2 (0.9) 15.3 6.7 7.5 14.1 13.1

ASX 200 0.0 3.1 12.0 3.1 12.2 13.4 11.9

TOPIX (0.6) (0.9) 2.8 53.3 22.2 12.7 10.4

Source: Thomson Reuters

*Valuation based on MSCI India **MSCI India price as of 22-Oct

Analyst Rating Page

Daiwa’s Banner Products P.2-3

Major changes

Dongfeng Motor Group (489 HK) Jeff Chung Outperform 

Underperform

P.4

The end of a ‘golden’ period

Target price 46.0% to HKD8.75

Jusung Engineering (036930 KS) Jae H. Lee Hold 

Underperform

P.7

Tough times for display and solar-cell equipment

Target price 22.7% to KRW5800

DiGi.Com Bhd (DIGI MK) Ramakrishna

Maruvada

Underperform

 Sell

P.11

Looks too rich to hold

Target price 1.3% to MYR3.90

Macro research

Technical Daily Comment Eiji Kinouchi P.15

Kinouchi’s Technical Tips for Institutions

Euro area wrap-up Tobias S. Blattner P.17

Overview

Other research

Orient Overseas International (316 HK) Kelvin Lau Buy P.19

Recovery appears in place

China Cement and Steel Weekly Felix Lam P.23

Demand improves: just seasonal?

China Coal and Power Weekly Dave Dai P.24

All waiting for demand

Qihoo 360 Technology (QIHU US) John Choi Not Rated P.26

Search business the next strategic step

POSCO (005490 KS) Sung Yop Chung Hold P.27

Still lacking upside momentum

Taiwan Semiconductor Manufacturing

(2330 TT)

Eric Chen Hold P.31

3Q12 and 2013 outlook

Hero Motocorp (HMCL IN) Navin Matta Hold P.35

Lacks near-term catalysts

Sterlite Industries India (STLT IN) Deepak Poddar Outperform P.39

Strong operating performance

Idea Cellular (IDEA IN) Ramakrishna

Maruvada

Underperform P.43

Falling short

Frasers Centrepoint Trust (FCT SP) David Lum Hold P.47

AEI pays off big

Ascott Residence Trust (ART SP) David Lum Buy P.50

Catching up

Korea: share prices and Daiwa recommendation trends P.53

Economic calendar – October 2012 P.55

Rating and target-price information P.56

Recently published reports P.56