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Fw: OSPL - MARKET PULSE: UOB, Swiber, CSE Global, ECS, Dyna-Mac, City Dev, Midas, KepCorp, STX OSV, UE E&C (28 Feb 2013) Inbox | | | | | | MARKET PULSE: UOB, Swiber, CSE Global, ECS, Dyna-Mac, City Dev, Midas, KepCorp, STX OSV, UE E&C
28 Feb 2013
KEY IDEA
UOB: Better-than-expected FY12
UOB reported a better-than-expected set of results with FY12 earnings of S$2803m, up 20.5%. A special dividend of 10 cents was declared, and
together with final dividend of 40 cents, brings payout for the year to 70 cents (FY11: 60 cents). Net Interest Margin fell from 1.95% in 4Q11 and
1.84% in 3Q12 to 1.76% in 4Q12. This is very much in line with the industry and our expectations. Management guided that margin is likely to remain
under pressure, at least for the next 1-2 quarters. It is also on track to grow its regional businesses and see increased contributions from more
cross border activities and transactions. We have tweaked our FY13 very minimally and our earnings forecast remains largely unchanged at S$2900m. We
are also retaining our fair value estimate of S$21.30 and our BUY rating. (Carmen Lee)
MORE REPORTS
Swiber Holdings: Core net profit largely in line
Summary: Swiber Holdings (Swiber) reported a 45.5% rise in revenue to S$952.2m and a 42.4% increase in net profit to S$45.7m in FY12. Stripping out
one-off items such as disposal gains, fair value gains on financial liabilities and forex losses, we estimate core net profit of US$30.1m in FY12,
slightly lower than our forecast of US$32.3m. The group also announced that it has won contracts worth about US$153m for work in SE Asia. After five
quarters of negative operating cashflows, the group saw positive operating cash flows in 4Q12, though FY12 still saw a negative figure. On the back
of the buoyant industry outlook , we raise our recurring profit estimate for FY13 by about 8%, such that our fair value estimate rises from S$0.65
to S$0.70 (based on 8x FY13F core earnings). Maintain HOLD. (Low Pei Han)
CSE Global: FY12 net profit doubled
CSE Global’s FY12 revenue increased 19.1% to S$544m, while net profit attributable to shareholders doubled to S$56.1m. The improvement was mainly
due to lower provisions for its Middle East projects and a S$10m disposal gain for a non-core investment. Gross margin was flat at 31.8% (FY11:
31.7%). Excluding the provisions made, gross margin would decline to 32.2% from 36.4% in the previous year, largely the result of lower margin
onshore green-field work in the USA. CSE Global has recommended a final dividend of 2.75 Scts. Maintain BUY with an unchanged fair value estimate of
S$0.99 (10x PER and 2x PBR). (Chia Jiunyang)
ECS Holdings: Margins under pressure
ECS Holdings’ (ECS) FY12 revenue inched 1.0% higher to S$3,643.7m, forming 102.0% of our FY12 forecast. Estimated core PATMI declined 18.4% to S
$29.4m (reported PATMI fell 24.4% to S$29.6m), which missed our estimate by 5.8%. On a positive note, a first and final dividend of S$0.022 per
share was declared, similar to FY11, and translates into a yield of 4.3%. Looking ahead, ECS aims to broaden its range of distribution products and
services to accommodate the shift in consumer preference from PCs to mobile devices, while it is also looking to develop its own cloud-based
solutions and products. We cut our FY13 core PATMI forecast by 5.7% and thence lower our fair value estimate from S$0.56 to S$0.53, still pegged to
5.8x FY13F EPS. Coupled with ECS’ recent strong share price performance, we downgrade the stock to HOLD. (Wong Teck Ching Andy)
Dyna-Mac Holdings: Flattish outlook for 2013
Dyna-Mac Holdings reported an in-line set of 4Q12 results with net profit soaring to S$8.8m from just S$0.9m in the year-ago period. FY12 revenue
increased by 82% to S$215m, while net profit increased by 56% to S$28.4m, largely driven by higher volume of work and variation orders. However, the
group’s order book dipped to S$134m as at 27/2/2013 (compared to S$215m as at 8/11/2012), providing cover for only about two quarters. This makes
its vulnerable to any delays in the awards of new contracts. Another concern is the labour crunch in Singapore, which could put pressure on its
margins. Downgrade to HOLD with a fair value estimate of S$0.50 (previously S$0.57) on 16x FY13 EPS. (Chia Jiunyang)
City Developments Limited: First take on 4Q12 results
City Development’s (CDL) 4Q12 PATMI rose 53% YoY to S$249m, mostly due to stronger progressive recognition from property development projects.
Full-year PATMI cumulates to S$678m (down 15% YoY) or an EPS of 73.2 S-cents. Excluding one-time gains, we estimate core FY12 PATMI at S$571m which
we judge to be mostly in-line with our FY12 forecast of S$564m. Topline for FY12 came in at S$3,354m, up 2.2% and again driven mainly by a stronger
performance from the property development unit. Management also proposed a special ordinary dividend of 5 S-cents, in addition to the ordinary
dividend of 8.0 S-cents, for a total of 13 S-cents per share. We would speak further with management regarding these results and, in the meantime,
maintain HOLD on CDL. Our fair value estimate of S$13.01 (15% discount to RNAV) is under review. (Eli Lee)
Midas Holdings: 4Q12 PATMI above expectations
Summary: Midas Holdings (Midas) reported its 4Q12 results last evening. Revenue rose 2.6% YoY to CNY216.5m, but PATMI dipped 53.3% to CNY17.1m. This
was however still above our expectations. For FY12, revenue fell 19.5% to CNY869.5m, or 2.6% above our forecast. PATMI of CNY27.9m represented an
85.1% decline, but was still well ahead of our CNY6.8m forecast as its associated company Nanjing SR Puzhen Rail Transport (NPRT) turned in a
surprising CNY20.0m share of profits in 4Q12, a stark contrast to the CNY25.7m share of loss for 9M12. We believe that this could be due to recovery
of expenses arising from transfer of certain metro projects due to regulatory requirement. This might be one-off in nature and we will seek further
clarity with management later. A final DPS of 0.25 S cent was declared, which was half of the preceding year, but in line with our forecast. Total
DPS for FY12 equates to 0.50 S cent (FY11: 1 S cent/share). We will provide more updates after the conference call. As we believe that China’s
railway sector will continue to recover in 2013, we maintain our BUY rating but place our S$0.60 fair value estimate under review. (Wong Teck Ching
Andy)
Keppel Corporation: Secures US$300m of contracts
Keppel Corporation (KEP) has secured three contracts worth a total of US$300m from repeat customers. They are for the construction of a KFELS B
Class jack-up rig from Star Drilling Pte Ltd, and the upgrading of two semisubmersibles for Ensco and Diamond Offshore. Star Drilling is a
Singapore-based company promoted by the D.P. Jindal Group of India, and this will be the third KFELS B Class jackup rig for Jindal. Delivery is
scheduled for 4Q14. Recall that PEMEX ordered two KFELS B Class jackup rigs for US$420m in Dec last year. KEP has secured contracts worth S$566m
YTD, accounting for 11.3% of our full year estimate. Maintain BUY with S$12.68 fair value estimate. (Low Pei Han)
STX OSV: Board recommends shareholders to reject Fincantieri's offer
The Board of STX OSV, following the advice of Independent Financial Adviser (IFA) Ernst & Young Corporate Finance, has recommended shareholders to
reject the offer made by Fincantieri to acquire the remaining shares in STX OSV. According to the IFA, the S$1.22 offer is not attractive and there
are "generally insufficient compelling reasons to recommend the acceptance of the offer". This development was not surprising as we have always felt
that the offer price was too low. We maintain our view that the offer will likely not succeed. We currently have a BUYrating with S$1.52 fair value
estimate. (Chia Jiunyang)
UE E&C: Net profit down 26% to S$48m
Although UE E&C's revenue was flat at S$387m for FY12, net profit fell 26% to S$48m. The results were higher than our expectations. The lower
performance in FY12 was mainly due to lower contribution from projects and share of results from associates and JVs. Gross profit margin decreased
slightly to 21.1% from 22.9% a year ago. The group has recommended 5 S cents final dividend for FY12. We will provide further updates after we speak
to management. We currently have a HOLD rating with S$0.68 fair value estimate. (Chia Jiunyang)
For more information on the above, visit www.ocbcresearch.comfor the detailed report.
NEWS HEADLINES
- US stocks rallied on Wed as an encouraging report on housing and the Fed’s commitment to stimulus outweighed concerns that had hurt stocks earlier
this week.
- Yanlord Land’s FY12 PATMI increased by 23% YoY to RMB1,823m. Revenue rose 15% to RMB10.3b.
- Kingsmen Creatives posted a 5% increase in FY12 PATMI to S$17.1m on the back of an 11% increase in revenue to S$290.3m.
- UOB Kay-Hian’s 4Q12 PATMI fell 44% YoY to S$9.7m; revenue fell 0.4% to S$87.6m.
- Banyan Tree’s 4Q12 PATMI climbed 255% YoY to S$5.0m. Revenue rose 14% YoY to S$97.5m.
- Banyan Tree’s 4Q12 PATMI climbed 255% YoY to S$5.0m. Revenue rose 14% YoY to S$97.5m. | |
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