YTD order wins in FY12 for Kreuz exceed expectations. The orderbook stands at around US$250m at the end of 2Q12, translating to a 1.6x book-to-bill and providing healthy visibility, given that the typical contract length for Kreuz stretches for only six to 12 months on average. Around 60% of this orderbook will be delivered in FY13. Though we reckon 2H12 earnings will be lower than that in 1H12 owing to seasonality, FY12 net profit is still projected to grow by 16%. For FY13, our analyst has revised up earnings estimate by 5% to reflect potentially better margins. Overall, we now expect 18% net profit CAGR and 13% EPS CAGR over FY11-13. The net gearing ratio remains stable at 0.26x, and debt headroom exists for further vessel additions to enable Kreuz to bid for more lucrative contracts in the future. Despite a healthy earnings outlook, the counter has underperformed the broad index in 2012 and is still trading below 4x FY13 PE. Maintain BUY with TP of S$0.43. Catalyst from an upgrade to SGX Mainboard is in the offing.

FY12 and 4Q12 net earnings for PEC in line; full year earnings down 62% on significantly lower gross margins. Orderbook is decent at S$323m and book to bill ratio of 0.91x, providing support for FY13F earnings. Upgrade to Hold, as we believe that downside risks have already been priced in; target price revised slightly higher to S$0.59 (Prev S$0.57) as we roll over our valuation peg of 0.7x P/BV from FY12 to FY13F.

4QFY12 core earnings for Olam are expected to rise 12% q-o-q to c.S$90m on almond harvest and coffee origination. Industrial Raw Materials division, however, should offset gains in other segments due to lower cotton/timber volumes. We expect positive Free Cash Flow next year; but this may be delayed, depending on the level of capex outlay needed for unforeseen M&A potential. HOLD rating maintained with TP of S$2.00.

Santak Holdingsis expecting to report a significantly higher net profit for FY June 2012 as compared to the previous year. This is mainly due to substantially higher revenue and better gross margin achieved mainly arising from additional precision machined components projects implemented during FY2012.

Singapore's headline inflation eased to 4% y-o-y in July, down from 5.3% in June, on the back of slower increases in the cost of accommodation, private road transport and oil- related items. Core inflation - excluding accommodation and private road transport costs, which together accounted for 60% of July's headline inflation - dipped 0.3 of a percentage point to 2.4% in July. In July, accommodation cost inflation came in at 7.8%, slowing from 10.8% in June mainly due to the fact that rebates for service and conservancy charges (S&CC) were disbursed to HDB households in June 2011 but not this year, which boosted cost hikes in June. Private road transport costs rose 5.9% y-o-y, adding 0.8-point to headline inflation compared to 1.3 points in June due to the previous decline in certificate of entitlement (COE) prices as well as lower petrol pump prices.

Three 99-year leasehold residential sites at New Upper Changi Road, Woodlands Avenue 6/Woodlands Drive 16, and Prince Charles Crescent, which are expected to yield about 1,600 housing units, were put up for sale by public tender.

China's manufacturing sector contracted at its sharpest pace in nine months in August. The HSBC Flash China manufacturing purchasing managers index (PMI) fell to 47.8 this month, its lowest level since November and well down from July's final figure of 49.3, on falling export orders and rising inventories. China's central bank yesterday also completed its largest weekly injection of funds into the financial system in seven months - a move seen as a substitute for a cut in banks' required reserve ratio.

Dow eased 0.9%, as worries about a global growth slowdown resurfaced following weak manufacturing reports and a surprise increase in the number of US jobless claims. The selling started early, after reports indicated that manufacturing hit a nine-month low in China. The US Labor Department reported a surprise jump in jobless claims, but a housing report showed sales of new homes picking up.

Source: DBSV