DBS Equity Research: Wired Daily 30 Oct 2014

kiasutrader

Publish date: Fri, 31 Oct 2014, 10:47 AM

OSIM - Weak 3Q14 results, cut FY14F-FY16F earnings by 19-23%. Maintain BUY with lower S$2.59 TP

OSIM reported a weak set of 3Q14 results, below expectations on weakness across Asia, higher TWG expenses, and one-off legal costs. We have cut FY14F-FY16F earnings by 19-23%. Going forward, TWG and new products are expected to drive growth amid short term drag. Current valuations have priced in negatives, maintain BUY with lower S$2.59 (Prev S$ 3.26) target price.

OCBC posted a 62% rise in quarterly profit, beating expectations, thanks to strong loan growth, higher margins and a one-off gain from acquisition. Excluding the one-off gain, the net profit of S$841m was slightly below consensus forecast. More updates to follow.

2Q15 profits for Yoma Strategic below forecast, capped by low margins and high costs. For 1H15, Yoma recorded core profit of S$3.6m, which met only 21% of our original FY15F.

A Singapore-backed consortium - which includes Yongnam and Changi Airport Planners and Engineers (Cape) - has secured a US$1.4 bn bid to construct Myanmar airport project, Yangon's second international airport. The consortium has been selected as the successful tenderer by Myanmar's Department of Civil Aviation (DCA), for the design, construction, operation and maintenance of Hanthawaddy International Airport (HIA) and its facilities on the basis of a public-private partnership agreement for a 30-year concession. Cape is a wholly-owned subsidiary of Changi Airports International (CAI), which is a unit of the Changi Airport Group. The consortium also includes Japan-based engineering contractor JGC Corporation.

Trek 2000 International has entered into a joint venture (JV) cooperation with Taiwan listed Unimicron Technology Corporation ("Unimicron"), a subsidiary of UMC, the world's largest printed circuit board manufacturer to produce solidstate drives (SSDs) for portable consumer electronics. The new JV, UniMemory Technology (S) Pte Ltd ("UniMemory"), constitutes a partnership between Trek and Unimicron with a paid up capital of US$5.0m, of which Trek's share is US$3.5m or 70% stake in UniMemory.

The Singapore Exchange (SGX) is exploring the feasibility of an equity crowdfunding platform for early-stage companies, and has formed a team focused on small and medium-sized enterprises (SMEs).

Singapore is the best country to do business in, topping for a ninth straight year, according to a World Bank report. Singapore was on top of the ranking with a score of 88.27, and New Zealand close behind with 86.91. Hong Kong ranked third, followed by Denmark and South Korea in the top five. The scores measure the operating environment for a business, including how easy it is to start a company, to transfer a property or resolve a commercial dispute; the time and cost of clearing imports and exports through a port; how easy is it to get an electricity connection, and other issues that face business owners in any country.

The US Federal Reserve announced the end of its bondbuying program after a two-day meeting, marking the close of a six-year effort to stimulate the economy. The central bank also voted to keep its key interest rate near zero, and said it will maintain interest rates at the current low rates "for a considerable time." The Fed has given indications that it will likely raise the interest rate in 2015. Stocks added to earlier losses after the statement was released, while the yield on the benchmark 10-year US Treasury note hit a three-week high.

Source: DBS

OCBC Bank (O39)Yoma Strategic (Z59)Trek 2000 Intl (5AB)SGX (S68)

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