DBS Equity Research: Wired Daily 28 Jan 2015

kiasutrader

Publish date: Wed, 28 Jan 2015, 02:36 PM

Amtek - Re-initiate coverage with BUY recommendation and target price of S$0.74

We re-initiate coverage on Amtek with a BUY recommendation and target price of S$0.74, implying 19% upside potential and 6% yield. Amtek is an end-to-end design and manufacturing solution provider for precision components, casing and enclosures. Its recent acquisition of Interplex Industries - a miniature precision engineering player - in July 2014 appears to be fairly positive. The Automotive sector, the largest contributor (22% of group revenue) and also secures better margins than other segments, is another key driver. This segment is likely to see double-digit growth at Amtek and Interplex, with China and US as the key markets. Amtek also benefits from strong USD revenue.

4Q14 results for Cache Logistics Trust in line. DPU remained flattish at 2.146 Scts due to an expanded share base. We have adjusted our earnings to reflect lower margins and rental achieved in our forecasts. New DPU of 8.4/8.7 Scts is close to 5% below our original forecasts. Maintain BUY, TP S$1.28 (Prev S$ 1.37).

Parkway Life REIT's4Q14 DPU of 2.9 Scts in line. Contribution from Japan acquisitions is expected to drive growth. Asset recycling, acquisitions are potential re-rating catalysts. Maintain BUY, TP S$2.66.

Armarda Groupproposed to issue 2,121.3m new shares at an issue price of S$0.005 for each Placement Share, amounting to an aggregate amount of approximately S$10.6m. The Issue Price of S$0.005 for represents a premium of approximately a 66.67% premium to the last volume weighted average price. The proceeds will be mainly used to finance or fund any possible acquisitions, purchases or investments in relation to data centre projects.

Singtel and Ericsson signed a memorandum of understanding (MOU) for a five-year partnership to test 5G technologies for future standardisation. They will explore 5G uses for consumers and enterprises, with the partnership including workshops to align 5G requirements and exchange ideas, as well as trials on potential technologies. Singtel plans to bring 5G here in 2020, making it one of the first in the world to offer it.

The Monetary Authority of Singapore (MAS) said it would continue with the policy of a modest and gradual appreciation of the S$NEER policy band but the slope of the policy band will be reduced. There will be no change to its width and the level at which it is centred. This measured adjustment to the policy stance is consistent with the more benign inflation outlook in 2015 and appropriate for ensuring medium-term price stability in the economy. MAS is also revising its inflation forecasts for 2015. CPI-All Items inflation is now projected to come in at -0.5 to +0.5%, from the +0.5 to +1.5% expected in October. Meanwhile, MAS Core Inflation is expected to be +0.5 to 1.5% this year, down from the earlier forecast range of 2 to 3%.

There were 67,400 job vacancies in September 2014, an increase of 8.9% from the 61,900 recorded in the previous year. Not unexpectedly, about 80% of the vacancies - or 49,860 job openings - were in the services industry, reflecting expansion of childcare and pre-schools, healthcare and tertiary institutes.

US stocks tumbled but ended off session lows following a drop in durable-goods orders and as disappointing results from Caterpillar Inc to Microsoft Corp heightened concern about the economy's strength. December durable goods orders fell a worse-than-expected 3.4% compared to consensus expectations for a 0.3% decline. Meanwhile, new home sales rose a better-than-expected 481k compared to 450k consensus expectations. Technology stocks fell led by Microsoft after reporting software-license sales to businesses that were below forecasts. Caterpillar shares fell after forecasting 2015 results that trailed estimates after plunging oil prices signaled lower demand from energy companies. In after hours trade, shares of Apple Inc. rallied after reporting revenue that topped estimates. Yahoo! Inc. shares also gained in late trading after announcing a tax-free spinoff of its stake in Alibaba Group Holding Ltd.

Source: DBS

ARA LOGOS Log Tr (K2LU)ParkwayLife Reit (C2PU)SinoCloud (5EK)Singtel (Z74)

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