Towards Financial Freedom
DBSV S'pore Wired Daily 8 November 2013
Today's Focus
Hyflux - Awaiting catalysts, maintain HOLD on limited visibility and upside to S$1.23 TP.
Hyflux reported an unusually strong 3Q13, bumped up by Tuaspring desal plant. 4Q is expected to slow down on lack of major project recognitions while the financial close of Dahej is only in 1Q14. Orderbook is depleting; future growth is dependent on new projects. Hyflux has >US$2bn in bidding/enquiry in the pipeline. Our analyst has tweaked FY13F and 14F earnings up by 2% each. Maintain HOLD on limited visibility and upside to S$1.23
TP.
3Q13 core net profit for Wilmarcame in at US$391m (+1% y-o-y; +60% q-o-q) - or 26% above mid-range forecast of US$303-317m. Including non-operating items, Wilmar booked 3Q13 earnings of US$416m (+3% y-o-y; +90% q-o-q). 3Q13 revenue was US$11,837m, (-4% y-oy, +14% q-o-q). The y-o-y decline was due to significantly lower palm oil prices. Our current Hold rating and TP of S$3.53 are under review, pending management outlook guidance.
StarHub's 3Q13 earnings of S$95.3(-1% y-o-y, -5% q-oq) was in line; 9M12 earnings comprise 75.9% of our FY13F forecast of S$378m. Weak mobile revenue was offset by lower handset subsidies and lower traffic costs. Non-mobile business was weak, as expected. Dividend yield of 4.5% and mid-single digit growth prospects are priced in; Maintain HOLD and S$$4.30 TP.
China Merchant Holdings reported results that were ahead of expectations. 3Q13 net earnings rose 46% yoy to HK$145.8m as revenue rose 37% yoy to HK$486m, due to the contribution of newly acquired Ningbo-Beilun Port E'way. Contribution from JV roads also rose 12% yoy to Hk$68.7m in the quarter. For the first nine months, net earnings rose 40% yoy to HK$450m on 34% top line growth to HK$1.4bn, as JV rose also contributed 23% yoy more to HK$207.8m. This is a strong set of results against our FY earnings forecast of HK$489m. More updates to follow.
2Q14 earnings for Yoma Strategic Holdings slightly ahead, driven by brisk property sales and pick up in construction. Star City is still the bright spot as Landmark awaits progress. Maintain BUY and S$1.02 TP.
ST Engineering posted a 10.3% y-o-y slide in net profit to $131.4m for 3Q13. Revenue was flat at $1.55 bn. For the nine-month period, net profit was 2.5% lower at $413.3m, while revenue was 0.8% higher at $4.69 bn. No dividend was announced for the quarter.
SIA Engineering reported a net profit of $71m for 2Q14, up 5.8% y-o-y. Revenue climbed 3.3% to $293.9m on the back of an increase in airframe and component overhaul work. For the six months ended September 30, net profit increased 2% to $140m, despite revenue slipping slightly to $583.3m.
COSCO Corporation has secured a Letter of Intent from Prosafe SE, for the engineering, procurement and construction of 2 (two) semi-submersible accommodation vessels with options for 4 (four) more units. The Letter of Intent covers two potential contracts, each in excess of USD200m. The vessels are scheduled for delivery in 2016.
Abterra is expected to report a loss for 3Q13, though the loss will be pared as compared to the loss for the previous corresponding quarter.
China Essence Group is expected to register a net loss for 2Q FY14. The Group saw a decrease in sales volumes for all its products in 2Q FY14 due to the low production level.
Mencast Holdings has entered into agreements to acquire the entire stake in CYE, a leading provider of precision
manufactured components and assemblies. The purchase consideration of S$11.0m will be satisfied by issue of new shares and cash.
Dow eased 1% despite upbeat economic data. GDP grew by 2.8% (QoQ) - above consensus expectations of 2.0% (DBS: 1.4%). However, private consumption - 70% of GDP and the ultimate driver of the economy - grew by only 1.5% (QoQ) in Q3, the lowest in 3.5 years. Business fixed investment - another 13% of GDP - rose by 1.6% (QoQ, saar); growth here has now averaged but 0.6% for the past nine months. In Europe, ECB unexpectedly cut a key interest rate to 0.25%. Nonfarm payrolls are on tap today. Markets expect a low 125k jobs were added in October.
Source: DBSV
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