DBS Equity Research: Wired Daily 9 Sep 2014

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Publish date: Tue, 09 Sep 2014, 12:08 PM

Croesus Retail Trust - Acquires One's Mall in Greater Tokyo; marginal uplifts to FY15/16F DPU. Maintain BUY and TP of S$1.10

Croesus Retail Trust acquires One's Mall in Greater Tokyo for JPY11bn, a 5% discount to the independent market valuation. The acquisition is partially funded by recent S$72.2m share placement. We estimate 0.1%/0.8% uplifts to FY15/16F DPU with gearing increasing marginally to 52% (51.2% including JPY650m consumption tax) from 51.7% at end-FY14. Maintain BUY and target price of S$1.10.

Pacific Radiance announced that its indirect subsidiary, Radiance Offshore Holdings has entered into an agreement with DOT Holdings to form a JV Company, DOT Radiance in Singapore. The JV Company intends to be engaged in the business of owning and chartering of offshore support vessels.

Starburst Holdings has been awarded a S$3.2m contract for the maintenance of certain firearm shooting ranges in Southeast Asia. Under the contract, Starburst will provide comprehensive services for the maintenance of ballistic protection system of these firearm shooting ranges for a period of 3 years up to June 2017. The Group completed the supply, fabrication and installation of these firearm shooting ranges in 2012.

ST Engineering announced that its aerospace arm ST Aerospace will be injecting its pro rata share of US$20.8m (approximately $25.98m), as additional capital into its Xiamen-based engine MRO joint venture company, ST Aerospace Technologies (Xiamen) Company Limited (STATCO). The additional funding will support STATCO's business growth. STATCO provides MRO and total support services for CFM56-7B engines that power the Boeing 737 family of aircraft.

CNA Group proposed to spin-off its waste water treatment business in China by way of a separate initial public offering (IPO) and listing on the Catalist Board of SGX. CNA currently plans to retain a beneficial interest in at least 40% of the total issued share capital of the NewCo following the completion of the proposed listing.

Chuan Hup Holdings has accepted an option to purchase several office units at 143 Cecil Street for S$31.7m. These are leasehold properties with a lease duration of 99 years commencing on 12 October 1982 and have a total area of approximately 1,492 square metres. The Properties have been approved as office units. The acquisition provides the Group with an opportunity to own a strategically located commercial property, which will enable the Group to earn a sustainable and recurring source of rental income.

Swiber Holdings has priced RMB450m in principal amount of 7.75% fixed rate notes due 2017. Net proceeds raised will be used for financing the general working capital and capital expenditure requirements of the group. The notes, which will be issued under the S$1 billion multicurrency debt issuance programme, will mature on Sept 18, 2017.

LifeBrandz is expected to report a loss for FY2014. Further details of the Group's performance will be disclosed when it announces its FY2014 unaudited financial results in late September 2014.

Hiring intentions in Singapore are expected to weaken in the fourth quarter of this year compared to Q4 2013, though the employment outlook remains positive, according to a survey. The Manpower Employment Outlook Survey by Manpower Group Singapore, a human resource consultancy, covered 663 employers.

Resale prices of non-landed private homes rose a slight 0.4% in August, compared to July, according to flash data released by the Singapore Real Estate Exchange (SRX). August's price gain was surprisingly led by properties in the city area and city fringe, which reported increases of 4.8% and 1.5%, respectively. In contrast, resale prices in the suburbs fell 1.1%. The market continues to expect an overall drop of 4-8% in the next 12 months, led by city-area condominiums.

China's imports unexpectedly fell for the second consecutive month in August, posting its worst performance in over a year. Imports fell 2.4% in August compared with a year ago, missing consensus estimate for a 1.7% rise. In contrast, China's exports were surprisingly buoyant in August amid stronger global demand. They jumped 9.4% yo-y to beat a forecast rise of 8%, although the growth rate slowed from 14.5% in July. That pushed the trade surplus to an unexpected all-time high of US$49.8 billion, which could put further appreciation pressure on the yuan.

US stocks ended mixed as declines in energy companies along with oil prices overshadowed a rally by Yahoo! Inc. According to Bloomberg, 8 of 10 main industries in the S&P 500 fell today, with energy shares lead declines. Brent crude briefly fell below US$100pbl for the first time since June 2013 as Chinese imports slipped in August, bolstering concern there's a global oil surplus. The IEA warned last month that oil markets in the U.S. and Europe face a glut amid constrained consumption and the recovery of supplies from Libya. Yahoo shares rose to the highest level since 2006 after Alibaba Group Holding Ltd. said it plans to raise as much as US$21.bil in an IPO. Apple Inc. will unveil the latest iPhones and a wearable gadget at an event later tonight.

Source: DBS

Pacific Radiance (T8V)Starburst (40D)ST Engineering (S63)Chuan Hup (C33)

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