STI is likely to start firmer on the back of the overnight rally on Wall Street. Singapore's benchmark index has risen 160pts since April 23rd. 3675 remains the year-end technical objective and the next near-term resistance is about c.3480, as stated in the latest Wired Weekly. Thus, we expect the current rally to taper off at c.3480 in the near-term. From there, the present short-term rising trend should switch to a narrow band that creeps up at a very slow crawl, rather similar to what happened from FebApr. At c.3480, STI's valuation would have approached 14.7x (+0.5 SD) 12-mth forward PE. The current rally should pause near 3480 given the lack of upward revision to FY13F and FY14F earnings from the latest 1Q results season. Support levels are at 3400 and 3370.

In other markets, we see the Nikkei 225 (currently at 15060) approaching key resistance anywhere 15070-15250 from a technical perspective. Upside is thus limited. A choppy trend that spans for weeks/month with a pullback to c.13600 (23.6% downward retracement) is possible.

Core loss of US$121m for Neptune Orient Lines exceeds expectations. Rate increases is hard to push through as liners fail to maintain capacity discipline. Recovery timeframe is pushed back; normalized returns look unlikely for NOL before FY15. We cut our earnings estimates for FY13/14 by 107%/70%, in line with more bearish volume and freight rate expectations hereon. Downgrade to HOLD with lower TP of S$1.19 (Prev S$ 1.45).

1Q13 results for Noble Group below as agriculture segment swung into the red. This division was hammered by idled Argentina soybean plants, logistic congestion in Brazil and weak sugar prices.  We expect sequential improvement in the absence of one-off negatives but the sugar business may continue to face challenges from low sugar prices. We have cut our FY13/14F earnings by 12%/9%. Downgrade to HOLD with TP cut to S$1.00 (Prev S$ 1.45). We believe Noble's share price will come under pressure post the disappointing results, earnings downgrades and slow macro recovery.

SingTel's 4Q13 underlying profit of S$1,001m (-2.2% yoy) was 5% below ours and consensus estimate of S$1,050m due to weak Singapore and regional associates.  Singapore's underlying profit declined 5% yoy to S$282m due to S$41m loss from new digital business (versus S$13m loss in 3Q13).  Associate's underlying profit contribution of S$387m was up 5% yoy but below our expectations of S$420m due to currency translation losses as Indian Rupee and Indonesia Rupiah declined 11% and 9% yoy respectively. Telkomosel, AIS and Globe offset Bharti's weakness. Management guided for stable group revenue with low-single digit growth in EBITDA led by cost cutting. However, it guided for stable EBIT (excluding associates) due to higher depreciation and amortisation. We will be reviewing our estimates and TP but are likely to maintain HOLD call.

1Q13 results for ComfortDelgrowithin expectations. Net profit up 7.9% y-o-y; EBIT margins expand on lower fuel/energy costs. We expect re-rating to continue given its stable profile, predictable earnings stream, diversified geographical exposure and strong balance sheet. Maintain BUY, TP raised to S$2.19 (Prev S$ 2.05) as we roll our valuations to FY14, from a blended FY13F/14F.

First Resources'1Q13 earnings of US$63.6m (+30%y-o-y; -13% q-o-q) were ahead of expectations. Key difference: implied CPO ASP booked was 35% higher than average spot prices (net of export taxes). FY13F/14F/15F earnings were tweaked by +4%/-4%/-3% on changes in CPO ASP, FFB yields, and olein volume assumptions. BUY call reiterated for 15% upside to S$2.14 (Prev S$ 2.16) TP.

Midas reported a small loss in 1Q of Rmb 4.9m vs. profit of Rmb 15.2m last year due to lack of contract wins in the last 18 months. We expect a turnaround in 2H13 as the group's order book has now grown to c. Rmb800m from just Rmb400m in January. The magnitude of turnaround for Midas would depend on the timing of the high speed rail contracts. Maintain BUY with S$0.60 TP based on 1.2x P/BV.

FY13 results for SIA Engineering were slightly below estimates on lower revenues from fleet management and lack of special projects. We are scaling back FY14/15F earnings by 2/3% to account for the slower growth trajectory. Final DPS of 15Scts was declared, in line with our estimates, and implies total payout of 22Scts for FY13 (FY12: 21Scts). There is little room for further outperformance, maintain HOLD with a TP of S$4.80.

Thai Beverage's1Q13's net profit fall was within expectations. The net profit drop was impacted by net loss from F&N's operating results. Spirits volume is recovering from higher inventory carried by trade; we expect sequential improvement. Maintain BUY, TP: S$0.80.

1Q13 core earnings for Vardsaw a 25% sequential improvement but EBITDA margins still at low levels - in line. Outlook for subsea remains robust and there are also signs of improvement seen for AHTS market. The operating issues in Brazil should be largely resolved by end-FY13; we expect EBITDA margins to improve next year. Maintain BUY; TP revised down to S$1.46 (Prev S$ 1.57) as we trim FY13/14F earnings by 4/6%.

1Q13 net profit of S$12.7m for CSE Global, up 4% yoy, was inline and account for 23.1% of our full year estimates. Revenue declined 11% yoy due to lower onshore activity in North America and lower zero-margin revenue in Middle East and project delays. However gross margin improved to 31.5% versus 27.9% in 1Q12 due to higher margin offshore projects and lower zero-margin revenue. New order wins stood at S$95m, up 11% yoy, below expectations and only account for 17.2% of our full year estimate. We have a HOLD rating with TP of S$0.85. More updates after discussion with the management. 

IEV Holdings has achieved a new record in securing a contract for the supply of its proprietary Marine Growth Preventer (MGP) products valued at a total of approximately US$1.45m. The contract is the single largest order for MGP products secured by the Group to date.

Source: DBSV