DBS Equity Research: Wired Daily 15 Aug 2014

kiasutrader

Publish date: Fri, 15 Aug 2014, 10:32 AM

Thai Beverage - 2Q results in line, expect positive momentum to continue into 2H14, FY15F. Maintain BUY, TP: S$0.68

City Development - Diversification is key, expect stronger 2H. Maintain HOLD, TP: S$10.71

2Q results for Thai Beverage Public Company were within expectations, continuing on 1Q's positive momentum. Spirits, Beer and Food segments post positive contribution, offset marginally by loss in Non-Alcoholic segment. Interim DPS of THB0.15 declared (1H14: THB0.14). We project the Group's positive momentum to continue into 2H14 which is on track to meet our estimates. 3Q results should also show a strong y-o-y growth mainly on a low base last year (due to excise increase) and improving consumer sentiment. Maintain BUY, target price: S$0.68. Valuation looks undemanding while corporate restructuring is a possible catalyst.

2Q14 core net profit for City Development grew by 90% y-o-y. 2H14 is expected to see higher earnings from pre-sales; group consistently looking for new avenues to diversify earnings. Maintain HOLD, target price of S$10.71 is based on 15% discount to RNAV.

Midas' 2Q net profit declined 44% y-o-y to RMB8.3m, despite an 18% y-o-y increase in revenue to RMB336m. While gross profit increased 34% y-o-y to RMB33.9 with an expansion in gross margin, higher administrative (+45% y-o-y) and finance costs (+57% y-o-y) due to the opening of new facilities being a drag. On the bright side, contribution from NPRT increased 170% y-o-y to RMB8.5m. At half time, net earnings nearly doubled to RMB19.8m, but making up just 9.6% of our full year forecast. An interim dividend of S0.25cts was declared (same as last year). The main reason for the company missing our estimates is that the ramp-up and utilisation of its expanded capacity has lagged our expectations, resulting in lower revenue and margins than forecasted. The stock is not expensive at 0.83x FY13 P/B, and with profitability improving we are thus maintaining our BUY call. Our TP is under review as we are looking to slash our earnings forecasts. More updates to follow.

Tat Hong's 1Q15 earnings below expectations, but Australia improved q-o-q to deliver sequential earnings growth. Higher crane and equipment rental activities in Australia are driving q-o-q earnings improvement. We await Australia to deliver a more convincing turnaround before turning positive. Maintain HOLD with a slightly lower S$0.83 (Prev S$ 0.85) target price.

Weaker regional currencies, higher operating expense caused Petra Food's 2Q profit to slip by 10.7%, below expectations. An interim DPS of 2.21 US cts was declared, marginally lower than the 2.36 US cts in 1H13. We have cut FY14F/15F earnings by 10%/5%. Maintain HOLD, target price S$3.62 (Prev S$ 3.65).

2Q14 results for Pan United on track, aided by CCIP port's contribution and minority interest. Interim DPS of 1.5 Scents declared. We lowered FY14F/FY15F earnings by 6% to account for the slight slowdown in construction output in 1H14. We expect stronger 2H as Thomson Line commences construction. Maintain HOLD with S$1.08 (Prev S$ 1.00) target price as we roll forward our valuation parameters.

We expect an 8% y-o-y growth in FY14 contracted sales for Yanlord. 1H results were in line but full-year margins may

be lower than previously expected due to revision in delivery schedule. Gearing may come in higher by year-end. We revised down FY14/15 EPS by 10%/9% to reflect lower margin expectations. Maintain HOLD, target price S$1.13.

Swissco Holdings has entered into charter contracts worth a total of approximately US$94.8m. The contracts will last for up to a period of 2 years, providing four (4) mobile offshore drilling units to be used by an oil major to support its oil and gas activities in Latin America.

Sino Grandness Food Industry Group announced that it is engaged in discussions with a potential strategic investor for possible investment of a substantial stake in the Company. The terms of the investment are subject to finalisation.

US stocks rose as investors tracked developments in Ukraine, bonds climbed on bets central banks will support the economy amid weaker-than-forecast data in Europe and U.S. and brent oil tumbled to a 13-month low. Eurozone's 2Q GDP stalled at 0% q-o-q (consensus +0.1%) as its 3 biggest economies failed to grow, underlining the vulnerability of the region to weak inflation and the Ukraine crisis. The decline in German GDO was greater than economists forecast, while the stagnation in France prompted the government to scrap its 2014 deficit target. In US, weekly jobless claims climbed by 21k to 311k, higher than consensus expectations for 295k. In corporate news, Wal-Mart Stores Inc. reported stagnant same-store sales growth and cut its earnings forecast for the year. Cisco Systems Inc. says it is eliminating 6,000 jobs (8% of 74,000 workforce) world wide in a new round of cuts and forecasts little to no sales growth.

Source: DBS

ThaiBev (Y92)CityDev (C09)Midas (5EN)Delfi (P34)PanUnited (P52)Yanlord Land (Z25)Swissco Hldg (ADP)Sino Grandness (T4B)

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