DBS Equity Research: Wired Daily 4 Jan 2015

kiasutrader

Publish date: Wed, 04 Feb 2015, 03:58 PM

OSIM - Expect higher costs, unexciting outlook. Downgrade to HOLD, TP cut to S$1.94

4Q14 results for OSIM International in line with expectations, supported by TWG. Both sales (S$177m) and earnings (S$27m) were flat y-o-y but improved sequentially (+12%, +67%, respectively) from a disappointing 3Q14. We expect higher costs, unexciting outlook for regional discretionary spending going forward. We trim FY15F earnings by 4% to account for higher costs. Downgrade to HOLD, reduce target price to S$1.94 (Prev S$ 2.59) based on lower 14x FY15F PE.

Starburst Holdings has been awarded a S$11.8m contract (with option for additional works valued at S$1.7m) for the Marina One project at Marina Way in Singapore. Under the contract Starburst will undertake the supply, fabrication, delivery, installation and warranty of facade steelworks. Works for this contract will commence in February 2015 and are scheduled to be completed in August 2016.

Soilbuild Construction Group has been awarded a S$26m contract by the Housing & Development Board (HDB) for the design and build of upgrading projects and contingency works. The construction period is approximately 18 months.

CNA Groupproposed to place 119.4m new shares at the issue price of S$0.0335 per share. The issue price represents a discount of less than 10% to the last volume weighted average price. The estimated net proceeds of about S$3.8m shall be used for general working capital and investment.

Sim Lian Groupproposed to acquire a freehold commercial property located at 59 Albany Highway, Perth, Australia for A$72m. The total net lettable area (NLA) of the Property is approximately 12,813 square metres. The Group intends to fund the acquisition with a combination of internal funds and bank borrowings.

Guocoland has raised S$170m via two bonds issuances. The dual-tranche offering comprised a S$120m 2.5-year bond that paid a coupon of 3.60%, and a S$50m five-year bond that paid a coupon of 4.20%.

Sino Construction has entered into a Joint Venture Agreement to establish and operate a jointly owned subsidiary in Singapore named Magnum Modular Power Generation. This new subsidiary will undertake the business of power generation, through proprietary Micro Power Plant (MPP) technologies; with additional focus on multiple fuels feed stocks namely, biofuel.

China Yuanbang Property Holdings is expected to report a loss before tax for 2QFY2015 and 1HFY2015, due to an unexpected delay of the certification procedures for some residential blocks of the Group's Xilang project.

Singapore's manufacturers had a subdued start to the new year, with the latest purchasing managers' index (PMI) signalling that industrial activity shrank for a second straight month in January. Even though the barometer of manufacturing activity inched upwards to a reading of 49.9, from December's 49.6, this was still under the 50-point threshold. The primary factors behind the stillcontractionary PMI reading were contracting new orders and inventory.

Source: DBS

Starburst (40D)Soilbuild Const (S7P)GuocoLand (F17)

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