DBSV S'pore Wired Daily 28 November 2013

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Publish date: Thu, 28 Nov 2013, 11:42 AM

Today's Focus

United Envirotech - Growth delayed to FY15; downgrade to HOLD, TP reduced to S$0.91

Recurring income model for United Envirotech remains intact but escalating costs need monitoring. Our analyst has cut FY14/15F earnings by 36%/19% to account for higher costs and slow EPC (Engineering, Procurement and Construction) execution. Downgrade to HOLD on limited upside to reduced TP of S$0.91 (Prev S$ 0.98). Earnings catalysts: EPC wins, higher than expected accretion from Memstar. Memstar takeover is long term positive but EPS dilutive near term. Technically, there is downside risk to $0.75 or even as low as $$0.66. These 2 levels are the major 38.2% and 50% downward retracement of the stock's bullish trend from a low of $0.31 (Jun12) to $1.02 (July13).

Upstream oil and gas firm Interra Resources' latest development well in the Tanjung Miring Timur (TMT) field in

Indonesia has achieved a flow rate of 650 barrels of oil a day. The firm currently has an average shareable production of 1,904 barrels a day. The firm has also started drilling another well in the TMT field, the third of four that it plans to do.

ST Engineering announced that its electronics arm, ST Electronics has set up a wholly owned subsidiary, ST Electronics (Thailand), in Thailand with a paid up capital of Thai Baht 120,000,000 (about S$4.8m). It will offer ST Electronics' transportation and advance electronics solutions in Thailand.

China Aviation Oil, Asia's top jet fuel buyer, is seeking up to 1.6 million barrels of jet fuel for delivery over late December to January, a tender document showed. This is about 30% higher than what the company has been requiring every month over the past two tenders, though the reason was not immediately clear. CAO had earlier halved its monthly jet fuel requirement for October due to a tax policy change that went into effect in August. China removed a value-added tax exemption on imported jet fuel used by Chinese airlines on their international flights, making imports more expensive than buying from domestic refiners, traders said. CAO resumed normal purchase volumes in September for its late October to November volumes, though it is unclear if this will be a long-term trend.

Singapore's services sector continued to put up a strong showing in the third quarter, with all segments experiencing higher turnover compared with a year earlier. Business receipts from companies in services - excluding wholesale & retail trade, and accommodation & food services - rose 8% y-o-y, in line with Q3 government data released last week. Business services enjoyed the highest growth of 12.2% compared with

a year ago, while financial & insurance services followed close behind with an 11.6% rise in revenue.

U.S. stocks rose as Hewlett-Packard led a rally in the technology sector while data on employment and consumer

confidence boosted optimism in the economy. Hewlett-Packard posted revenue and profit that topped analysts' estimates. Weekly jobless claims fell more than expected at 316k (consensus 330k). The Thomson Reuters/University of Michigan final index of consumer sentiment unexpectedly rose to 75.1 in November from 73.2 a month earlier.

Source: DBSV

ST Engineering (S63)China Aviation (G92)Interra Resource (5GI)

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