DBSV S'pore Wired Daily 29 August 2013

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Publish date: Thu, 29 Aug 2013, 09:56 AM

Today's Focus

STI - Technical rebound from c.3000 towards 3100 before heading towards 2880 major support

Asian equity indices of Japan and Korea are starting Thursday's session higher as oil price pulled back and the Rupee rebounded, easing pressure on the equity sell-off. For the STI, continue to scope for a technical rebound from c.3000 towards 3100 before heading lower again towards 2880 major support.

United Envirotechannounced a RMB90m (~S$19m) EPC contract to upgrade a 100,000m3/day industrial wastewater treatment plant in Nantong City, Jiangsu Province, China. This wastewater treatment plant serves industries located in the Nantong Economic Development Zone and about 70% of the wastewater is from textile industry. Upgrading of the plant is required to meet the more stringent Grade 1A discharge standard imposed by the local government. This project will commence construction immediately and is expected to be completed by the end of Dec 2013. Together with a RMB100m contract announced last week, United Envirotech has met ~50% of our FY14 new win assumption of RMB400m. No change to our forecast, S$0.90 TP and Hold call.

Sin Heng Heavy Machinery reported a surge of 45.1% yo-y in net profit to S$13.7m for its financial year ended 30 June 2013. The higher profit was due to a 44.3% y-o-y increase in revenue to S$186.5m which was a result of broad-based improvement across geographical markets and business segments. Revenue of trading segment increased 49.3% to S$133.0m mainly due to the higher volume of cranes traded, whereas revenue of equipment rental segment improved 33.3% to S$53.5m mainly due to the increase in revenue from expanded fleet size. Gross profit margin improved to 16.2% for FY2013 from 15.8% for FY2012.

Q & M offers S$6m to acquire a 60% stake in the largest dental hospital in Donggang, PRC, to strengthen its presence in North-Eastern China. The proposed acquisition will involve the acquisition of two dental hospitals operated and owned by Dr Sun Zhizong. Q & M will receive a profit guarantee of at least $600k (RMB3m) per year starting from 2014 for a 12-year period until 2026. The proposed acquisition exercise is expected to be completed on 1 February 2014 and will be funded by internal cash, loans and/or issuance of new Q & M shares.
Intraco has joined forces with Tat Hong and a Myanmar businessman to set up a joint venture company to enter the crane rental and excavator distribution business in Myanmar. Called Tat Hong Intraco, the Singapore JV will hold the licence with various principals and engage in the distribution of cranes and excavators in the rapidlydeveloping nation. It will also incorporate Tat Hong Intraco Heavy Equipment, a wholly owned subsidiary in Myanmar, which will rent out cranes and run related business activities there.
Moody's Investors Services has upgraded Keppel REIT's corporate family rating to Baa2 with a stable outlook. Moody's has assigned the improved rating based on Keppel REIT's enlarged and quality asset portfolio in Singapore and Australia; strong operating performance; as well as proactive capital management, which minimises its refinancing risk for the next 12 to 18 months.
Stamford Tyres Corporation has completed the sale of its property located at 207 Balestier Road for S$6.3m cash. The net proceeds from the sale will be used for the Group's business and to fund the Group's investment in its distribution and warehousing capabilities as well as for working capital purposes. The Group is expected to record a net gain of approximately S$5.5m after taking into account the net book value of the Property and the expenses relating to the sale.
A freehold hotel development site at Lavender has been put up for sale with a guide price of about $28m to $30m. The 3,516 square feet site has been granted provisional permission for the development of a six-storey hotel comprising 60 rooms. The guide price works out to be about $466,000 to $500,000 per room.

US stocks rebounded, led by energy shares as investors watched developments in Syria. Russia had objected to a UN resolution authorizing action to protect civilians. A State Department spokeswoman said the U.S. will take "appropriate" steps without the international body's approval. The U.S. and its NATO allies began presenting their justification for military action as they advanced plans for launching strikes and prepared evidence that the Syrian government used chemical weapons on its own people. Meanwhile, the index of pending home sales for July fell 1.3% (consensus unchanged), the worst reading this year, after a 0.4% decrease in June.

Source: DBSV

Intraco (I06)Keppel Reit (K71U)Stamford Tyres (S29)

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