DBSV S'pore Wired Daily 7 June 2013

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Publish date: Fri, 07 Jun 2013, 12:01 PM

Today's Focus

Amara Holdings - Spreading its wings in Asia; fair value S$ 0.75

With yesterday's decline to 3193, STI is now trading below the 13.9x (average) blended FY13/14F PE level at c.3287. At these levels, PE valuation for the Singapore market is no longer at an elevated level. STI has also corrected to and even dipped slightly below its 200-day EMA, which is a demonstration of the correction depth of 280pts. We continue to seek a short-term low level as the current forward PE level is becoming attractive and the oversold nature of the technical indicators with 14-day RSI at 21.3, daily stochastics at 5 and weekly stochastics at 20.

DBSV Research issues an Equity Explorer on Amara Holdings with fair value of S$ 0.75 which offers 19% potential upside to current price. Amara is an Asian integrated lifestyle group with three key business areas: hotel investment and management, property investment and development, and specialty restaurants and food services. Further to its regional ambitions, the group intends to grow its hotel business in Myanmar through a JV to develop and operate a hotel in Dagon Township, Yangon, with capital of US$50m.

SembCorp is preparing for an initial public offering of the independent water and power project's (IWPP) JV company on the Muscat Securities Market. The Sembcorp Salalah Power and Water Company, in which Sembcorp Utilities holds a majority 60% stake, will see its stake diluted by 35% after the IPO, reports said. Other stakeholders are Oman Investment Corporation with a 35% stake, and Bahrain-based Instrata Capital with 5%.

Jaya Holdings has signed contracts for three of its four new build platform supply vessels (PSVs) well ahead of their delivery dates from the shipyard. The total value of these three contracts is more than US$60m, including optional extension periods.

Ramba Energy's major shareholder Edward Seky Soeryadjaya has been approached by a potential buyer keen on a 51% stake in Ramba. The possible offer would be via a voluntary conditional cash partial offer at an indicative price of between 60 cents and 70 cents a share.

CNA Group has won projects totaling up to S$13.8m across Asia. One of which includes a contract from Laos Airport Authority for a Common Use Terminal Equipment solution in Luang Prabang Airport for a 15 year term from June 2013 onwards. Others include the India Metro Railway project for Bangalore Metro Rail Corporation, third Down Town Line contract - 16 underground MRT stations to be fitted with CNA's Local Sequential Controller System and securing more Vietnam projects.

ECS Holdings has signed an agreement to distribute Lenovo smartphones in Malaysia and Thailand. Lenovo is the world's second-largest PC maker and has risen rapidly to become China's second-largest smartphone manufacturer.

In property news, Hewlett-Packard has put its freehold office and manufacturing premises on Alexandra Road up for sale. The property could fetch around $370-390m, according to market estimates. Just eight months ago, Neptune Orient Lines sold its 26-storey headquarters office tower next door, NOL Building, for $380m.

US markets rebounded from early session losses to finish firmer ahead of tonight's May job numbers. Yield on the 10-year Treasury note fell to the lowest level in 2 weeks ahead of the data release tonight as investors seek the safety of bonds.

Source: DBSV

Amara (A34)Sembcorp Ind (U96)Eneco Energy (R14)

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