Towards Financial Freedom
DBSV S'pore Wired Daily 18 October 2013
Today's Focus
Keppel Corp - 3Q13 results in line; O&M margins stronger than expected. Maintain BUY with
unchanged TP of S$12.90
3Q13 bottomline for Keppel Corp was largely in line. The key highlight was the stronger than expected O&M operating margin that expanded 2.3ppts q-o-q to 16.5%, attributable to more deliveries of KFELS B class jack ups and higher repair margins for certain projects. However, this was offset by lower O&M revenue recognition resulting from slower order book drawdown. Property income rose 70% q-o-q to S$201m, driven by home sales in Singapore and China. 9M13 net profit amounted to S$1.08bn, forming 71% of our full year estimate. Order flows are gaining momentum; YTD order wins stood at S$5.3bn, and looks set to exceed our full year expectation of S$6bn.Maintain BUY with unchanged TP of S$12.90.
1Q14 earnings for Singapore Exchange were lifted by lower expenses; total revenues were in line with expectations. Annualised expenses were below target; we expect pick up in technology expenses and depreciation ahead. Base DPS of 4 Scts was declared as expected. Maintain HOLD and S$7.15 TP.
Dalian Deepwater Development initiated termination of its drillship order with Coscoon the grounds of delay in delivery and is seeking refund of payment totalling US$110m. The actual financial impact is still unknown at this juncture. Taking cue from previous similar cases, we believe Cosco will likely have to reverse any profits it has recognised on the project before a new buyer is found.
The drillship is >80% completed implying revenue recognition of >US$400m. Given the project overrun, reversal of profit should be small, if there is any. Cosco is currently talking to potential buyers. Separately, Cosco announced contract wins totaling over US$400m comprising:
1) newbuild contract for a jack up drilling rig from Asian shipowner worth US$180m. To be built in Dalian yard and delivered by 3Q15
2) conversion of a semi-completed hull to high end floating accommodation unit valued at over US$
170m; delivering in 24 months from Nantong yard; and
3) newbuild contract for a 30k dwt cargo and
training ship from a chinese shipowner worth RMB325m (US$53m); To be delivered from Dalian
yard by 3Q15.
The latest wins lift Cosco's YTD new orders to US$2.2bn, surpassing our expectations of US$2bn. Maintain HOLD and TP of S$0.83.
Cordlife is partnering with Golden Meditech to expand its product presence in China. It has signed a non-binding Memorandum of Understanding (MOU) with Golden Meditech, a leading integrated healthcare enterprise in China. This is to further capitalise on the fast-rising Chinese middle class, whose population is estimated to grow from 290 million in 2011 to a projected 590 million by 2025. This strategy is in line with Cordlife's growth plans to improve economies of scope via offering of complementary products and services that cater to the mother and child segment, through partnerships and collaborations.
Sysma Holdings proposes to place 19.5m new shares at the price of S$0.312 per share. The issue price represents a discount of 9.9% to the last volume weighted average price. Gross proceeds of approximately S$6.08m will be utilized to fund the Group's business expansion and for general working capital purposes.
ISDN Holdings may consider separate public listings for its coal-related ventures in Myanmar as an added measure to raise funds for the project development. ISDN has previously announced a joint venture agreement with its Myanmar joint venture partner Tun Thwin Mining to invest, develop, construct, operate and manage a 540 megawatt (MW) coal-fired power plant in Kalewa, North West
Myanmar.
Far East Group is proposing to undertake a renounceable non-underwritten rights issue of up to 36.2m new shares at an issue price of S$0.15 for each Rights Share, on the basis of one (1) Rights Share for every two (2) existing shares held. The Issue Price represents a discount of approximately 26.8% to the last weighted average price. Net proceeds of approximately S$5.2m will be used for acquisitions and working capital purposes.
Blumont Group has secured US$200m of funding from Platinum Partners Value Arbitrage Fund LP, a New York-based global investment fund. Under a binding term sheet entered into yesterday, Blumont will issue redeemable convertible bonds to Platinum Partners, in four equal tranches of US$50 million - each at a coupon rate of 8% per annum, payable on a semi-annual basis.
Non-oil domestic exports (NODX) fell year-on-year for an eighth consecutive month in September, though the contraction was narrower than market forecasts, as higher non-electronic exports such as ships and petrochemicals helped offset weaker electronics ones.
NODX eased from a 6.8% y-o-y decline in August to a 1.2% dip last month. Expectations were for a 2.8% drop. Shipments to the United States and China, two of Singapore's largest markets, have recovered strongly. The top three contributors to the export contraction were the European Union, South Korea and Japan. Electronic NODX fell year-on-year for the 14th straight month in September, even though the decline eased to 5.5% in September from 9.2% the previous month. Non-electronic shipments swung to a 0.9% increase, from a 5.6% decline.
S&P 500 hit a new record high but Dow ended the day flat as weakness in IBM, Goldman Sachs and UnitedHealth was balanced by strength in American Express and Verizon. Both Dow heavy weights - IBM and Goldman Sachs reported weaker than expected results. About 70,000 federal workers filed for unemployment benefits during the first week of October. The 16-day shutdown comes with a $24bn price tag, according to Standard & Poor's.
Source: DBSV
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
