Wilmar - FY12F-14F earnings cut by 21-36%, TP lowered to S$3.00. Stock is bombed out; HOLD call maintained.

Indofood Agri Resources - Lacking catalysts, downgrade to HOLD, TP cut to S$1.40.

Wilmar's 2Q12 core profit of US$172.3m (-55% y-o-y, -29% q-o-q) ' was below the US$280-320m expected. 2Q losses for Oilseeds & Grains M&P widened while Plantation profit also disappointed (-45% y-o-y). FY12F-14F earnings cut by 21-36% as we lower expectations across the board. TP is cut to S$3.00 (Prev S$ 3.90). Stock is bombed out; HOLD call maintained. We expect to see a number of catalysts to help improve Wilmar's sequential performance but these may not be apparent until closer to end of 3Q12.

2Q12 net profit of Rp253.6bn (-18% y-o-y, 33% q-o-q) for Indofood Agri Resources was below our Rp315-30bn estimate. Cost pressures drag results despite higher output. FY12F-14F earnings cut by 16-18% as we trim CPO production and edible oil contribution. Downgrade to HOLD, TP cut to S$1.40 (Prev S$ 1.60).

4Q12 net earnings forASL Marine were in line, up 42% y-o-y, driven by improvements from all divisions. A higher final dividend of 1.75 S cents (1.5 S cents FY11) was declared. Order book remains healthy at S$586m for 38 vessels with 56% for the OSV segment. The group is focusing on OSV for earnings turnaround. Maintain Buy and S$0.83 TP.

Banks reported lower NIM in 2Q12. NIM outlook for the rest of the year appears bleaker than we had initially expected. Our analyst has trimmed loan growth assumption to 10% for 2012 (from 12%). FY12-14F earnings for OCBC lowered by 2% each after trimming NIM by 2bps and loan growth forecast to 10% (from 11%). For UOB, FY12F earnings were raised by 4% on higher fee income despite lower loan growth, but cut FY13-14F earnings by 3% each after trimming NIM by 2 bps and lowering loan growth forecast to 10% (from 12%). As such, FY12F sector earnings growth was largely unchanged at 9.6% (9.5% previously). Growth for FY13F was lowered to 9.3% (from 12.0%) to account for a push back in NIM uptick and slower loan growth. 1H12 earnings comprise 53-58% of our FY12F, indicating a slower 2H12. Target price for banks  raised after rolling forward valuation base to FY13. Our TP for UOB and OCBC are now at S$21.00 and S$11.00 respectively. Our preference remains with OCBC (Buy). At current levels, we see limited upside for UOB (Hold).

Moody's Investors Service has downgraded SingTel's senior unsecured rating and notes to Aa3 from Aa2 while its rating outlook remains stable, citing a weakening in key financial parameters over the last year.

Cordlife Grouphas entered into an agreement to acquire 10% of China Cord Blood Corporation (CCBC) for approximately US$20.8m. The acquisition is in line with Cordlife's strategy to expand its geographical reach in China to beyond the Guangdong province. At the same time, Cordlife Group is disposing its 10% stake in China Stem Cells (South) for US$16.8m, an excess of approximately S$4.6m over the net asset value as of 31 March 2012.

Otto Marine has secured a time-charter contract for its Maintenance and Construction/ Accommodation support vessel, Seasafe Supporter, for a firm 500 days with an option to extend for 2 months. The contract is expected to generate about US$10.0m for the minimum scheduled period of the charter.

July 2012 operating results for SIA. SIA recorded 3.2% y-o-y growth in systemwide passenger carriage while capacity increased by 4.7%. Consequently, passenger load factor (PLF) fell by 1.1 percentage points to 80.5%. The number of passengers carried increased by 2.7% y-o-y. Load factors softened across all regions except for Americas which saw strong summer travel demand. East Asia region registered the highest decline, as capacity expansion outpaced the growth in passenger carriage. Promotional efforts undertaken to boost carriage will continue to put pressure on passenger yields. Overall cargo traffic was 3.0% lower y-o-y, while cargo capacity decreased by 0.1%. Consequently, cargo load factor (CLF) in July 2012 fell by 2.0 percentage points.

CLF decreased year-on-year for all regions, except for South West Pacific and West Asia & Africa. Cargo load factor for the East Asia region declined by 8.1 percentage points as traffic demand was weak and did not match capacity.

July home sales climbed 19.8% m-o-m to 2,067 units after a brief pause in May/June. Excluding ECs, home sales rose by a strong 41.7% to 1,943 units. While the market continues to be driven by the mass market segment where 78% of total new sales were in OCR, response was mixed for new launches with better located developments enjoying brisker take-up rates. While sales momentum could slow ahead of the Hungry Ghost Month, we expect take-up for the year to remain fairly robust amid a low interest rate and ample liquidity environment. However, price momentum would continue to be moderate with buyers in the low-end segment showing more resistance to price hikes as well as demand in this segment becoming more sated. We continue to prefer non-residential and diversified plays like Capitaland, CapitaMalls Asia and Global Logistic Properties.

Dragged down by motor vehicles, retail sales for the month of June slipped 0.9% y-o-y. Excluding motorvehicles, retail sales were up 2.3%. Meanwhile, sales  (seasonally adjusted) dipped 0.4% in June compared to the previous month but were up 1.9% (excluding motor vehicles) m-o-m. For the month of June, retailers of motor vehicles saw sales slump by 10.8% y-o-y. Other retail categories which reported declines during the month were watches & jewellery as well as optical goods & books, as sales decreased by 9.2% and 1.1% respectively.

On the other hand, double-digit growth was reported by retailers of medical goods & toiletries, telecommunications apparatus & computers and supermarkets as they registered increases of 17.8%, 11.6% and 10.7% respectively.

In property news, Kovan Lodge - one of the last few older freehold blocks on Kovan Road - was put up for sale by tender at an indicative asking price of $31m, or $802 psf ppr. Comprising a total land area of 27,090 square feet, the site is said to have the potential to be redeveloped into a much bigger residential development.

Source: DBSV