Towards Financial Freedom
DBS Equity Research: Wired Daily 10 Sep 2014
Thai Beverage - Expect growth momentum to continue. Maintain BUY with higher TP of S$0.80
Despite a solid YTD share price performance, we expect further upside and reaffirm our BUY recommendation on Thai Beverage with a higher target price of S$0.80 (Prev S$ 0.68). We believe the Group will continue on its growth profile. Spirits continued its stellar performance and we expect this segment to remain as the key contributor to the Group. Beer should be profitable in FY14F, for the first time since FY08. Non-Alcoholic Beverage is likely to remain in the investment phase within our forecast periods. We project growth to continue into 2H14 and FY15. Corporate restructuring is an added catalyst on top of positive operating performance. Upside revision to FY15 forecasts possible if management sustains strong margins.
ST Engineering announced that VT Mobile Aerospace Engineering, Inc (VT MAE) and the City of Pensacola have signed an agreement to set up an aircraft maintenance, repair and overhaul (MRO) facility at the Pensacola International Airport in Pensacola, Florida. Under the agreement, the City of Pensacola will construct an aircraft hangar complex on 18.66 acres of greenfield land, and lease it to VT MAE for 30 years. The hangar will be able to accommodate two wide-body aircraft, and is expected to be ready for operations in mid 2016. VT Aerospace is a subsidiary of VT Systems, the US headquarters of ST Engineering.
Olam International announced that its wholly owned dairy farming subsidiary New Zealand Farming Systems Uruguay (NZFSU) will be investing US$80m to establish a new dairy processing facility in the central region of Uruguay. The project enables Olam to fully integrate its dairy supply chain and realise the full potential of NZFSU's dairy farming operation by leveraging its global trading and distribution network.
Global Logistic Properties has signed new lease agreements totaling 87,000 sqm with three leading third-party logistics (3PL) companies in Eastern and Midwestern China. GLP is extending strategic partnerships with Sinotrans and Best Logistics.
SPHannounced that its subsidiary SPH Magazines has acquired Asia's leading online luxury publication, Luxury-Insider.com, from WhiteWave Media Group (WWMG). Luxury-Insider.com, launched in 2006, was Asia's first completely digital luxury publication.
Yamada Green Resources is proposing to acquire a moso bamboo plantation for a period of 10 years for RMB234.5m. The market value of the Plantation was estimated to be approximately RMB242.8m. The Plantation, which is situated at Jiangle County, Fujian Province, China, has gross land area measuring approximately 67,000 mu. The Plantation shall be used solely for the cultivation and harvest of moso bamboo, spring bamboo shoots and winter bamboo shoots. The Group believes the bamboo plantation business will continue to generate a stable income stream in the future due to its higher resilience to fluctuating climate conditions experienced in recent years in the PRC. It will also enable the Group to diversify risks from largely reliant on its shiitake mushroom business.
SunMoon Food Company has entered into a Letter of Intent (LOI) with Rio Vista Ventures LLC, trading under the business name of Giumarra, to form two joint venture companies, one to source and acquire fresh fruits and vegetables, and the other to distribute them. Giumarra is one of the world's largest agricultural organizations and is recognized for setting standards of excellence in the world of agribusiness.
In property news, another deal could be brewing for the sale of the former Midlink Plaza site in Middle Road, after an earlier proposal to inject the property into listed nightspot operator LifeBrandz as part of a reverse takeover deal vaporised recently. This time around, China's Nanshan Group - which is involved in diversified businesses ranging from aluminium and golf courses to education and wine - is said to be in negotiations to buy the property on a completed basis. Talk in the market is that a price of about S$270m is being discussed. The site, which has a balance lease term of about 65 years, is being redeveloped into a 396-room boutique hotel, with some strata retail space. Nanshan is understood to be the Chinese party that last year acquired the Park Regis Singapore hotel along New Market Street/Mer-chant Road for around S$250m. It has also been taking part in Singapore state land tenders. Midlink Plaza is owned by 122 Middle Investment Pte Ltd, whose shareholders include Lian Beng Group, Centurion Properties, coffeeshop operator Chang Cheng Group and a vehicle controlled by K Box chain owner Jason Lee.
US stocks fell on valuation and as concerns grew that the FED may raise interest rates sooner than anticipated and a rally in Apple Inc. faded after the company announced its much anticipated new products. Financial industry opinions are mixed about the impact of a rate hike. Meanwhile, former Fed Chairman Alan Greenspan said the U.S. economic rebound has been hindered by a slump in the construction industry as wage growth remains slow and credit conditions tight. Apple shares failed to perform after unveiling new products that included a smartwatch, mobilepayments system, health applications and bigger-screen iPhones. McDonald's Corpshares fell after monthly sales missed estimates. Home Depot Inc. shares fell after confirming that hackers attacked its computer systems. Amazon.com Inc. shares retreated after the company cut the price of its Fire smartphone to 99 cents to boost adoption of the device.
Source: DBS
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