2Q12 net profit of S$12m for Yongnam was below our estimates. The ramp up on key projects was slower than expected. Order wins pace is not exciting enough while high competition limits margins potential. Our analyst has cut FY12/13 earnings by 26%/ 17% and downgrade the stock to HOLD with lower TP of S$0.24 (Prev S$ 0.30).

Keppel Corp said it has firmed up contracts to build five additional semisubmersible drilling rigs for Sete Brasil for US$4.1 bn, following the Letter of Intent announced in April 2012. The five rigs will be based on Keppel's DSS 38E design and are scheduled for delivery in 4Q 2016, 3Q 2017, 2Q 2018, 4Q 2018, and 3Q 2019 respectively. The contracts follow a deal signed by Keppel Corp to build one such rig for Sete Brasil in December.

China Merchants Holdings (CMHP) is acquiring Ningbo Beilun Port Expressway, a four-lane carriageway, 51.4km long expressway located in Zhejiang province in China, for a maximum purchase price of RMB1.29bn, assuming the final toll period is on or after Dec 31, 2027. The acquisition was part of its plan to acquire quality toll road assets in key strategic regions to develop its core business to a sizable scale and generate long-term profit. The Expressway is valued at approximately RMB920m as at March 31, 2012 while the net asset value as at Dec 31, 2011 was RMB314.7m, and its pretax profit was RMB115.6m. CMHP intends to finance the acquisition using a combination of internal cash resources and external financing including external bank borrowings and/or the issuance of new securities.

Sound Global will offer US$150m in five-year bonds. The notes will mature Aug. 10, 2017 and carry an 11.875% coupon. The proceeds of the issue will be used to invest in prospective projects, refinance existing debt obligations and for working capital.

Loyz Energy(previously known as Sim Siang Choon) has proposed a share placement of 12m new shares at 31 cents apiece to raise net proceeds of $3.55m. The issue price reflects a 9.7% discount from last weighted average share price. The proceeds will be entirely used to fund its working capital and existing and future undertakings.

In a separate announcement, Loyz Energy said that it has, through its majority-owned Loyz NZ Ventures, acquired its first New Zealand petroleum exploration permit for US$6.5m. This gives Loyz NZ the right to explore for hydrocarbons in the Awakino area which is located within the prolific oil-producing Taranaki Basin.

Sunpower Grouphas recently been contracted to supply heat exchangers to Braskem Idesa, for its polyethylene manufacturing project in Mexico. Braskem Idesa is a joint venture between Brazilian Braskem, the largest producer of thermoplastic resins in the Americas and the eighth'largest in the world and Mexican Grupo Idesa. Both of them are new clients of the Group. This contract, valued at RMB16.9m, is expected to have a positive impact on the Group's FY2013 results.

SingXpress Landis issuing S$94.4m non-redeemable, cumulative convertible non-voting perpetual preference shares to Haiyi Holdings, which is principally engaged in international trade, financial investments and investment holdings. SingXpress Land currently intends to apply 50% of the proceeds for general working capital and 50% for new project investments.

Leader Environmental Technologies is expected to report a small loss for 2Q12 as compared with the corresponding period in 2011. The group undertook fewer large scale desulphurisation projects and focused on industrial wastewater projects instead which offer better payment terms, but at a lower gross profit margin.

China Essence Groupexpects to register a net loss for 1Q13. The group expects an adverse impact on profit margin for the quarter as the operating environment remained challenging for the potato starch industry in China.

According to National Development Minister Khaw  oon Wan, HDB will offer 20,000 new HDB flats next year as part of its efforts to meet demand. This comes on the back of the past two consecutive years of c25000 new HDB units being offered into the market. In addition, there was 16000-17000 private housing that had been sold annually between 2010-2011 and expected to complete from 2013 onwards. Hence, our analyst expects price momentum to decelerate going forward.

Source: DBSV