DBS Equity Research: Wired Daily 13 May 2015

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DBS Equity Research: Wired Daily 13 May 2015

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Publish date: Wed, 13 May 2015, 06:30 PM

CSE Global - Strong order book despite headwinds. Upgrade to BUY on unchanged TP of S$0.65

Bumitama - 1Q15 earnings below expectations; expect yields and earnings to recover in 2H15

UOL - 1Q15 results in line. Attractive valuations; BUY, TP S$9.31

1Q15 net profit of S$ 7.6m (+1% y-o-y) for CSE Global in line with our expectations. High contribution from Americas supported revenue, strong GP margin from offshore projects. Order wins from Americas and Middle East are expected to underpin CSE's strong order book. Upgrade to BUY on unchanged TP of S$0.65 and yield of ~5%.

Bumitama Agri's 1Q15 earnings of Rp182bn were below expectations on annualised basis. Lower CPO yields prompted higher third party FFB, while USD debts incurred US$32bn in translation FX losses. We expect yields and earnings (excluding translation FX losses) to recover in 2H15. Earnings, TP and BUY rating unchanged for now, pending publication of export levy regulations.

Excluding one-offs, UOL's 1Q15 net profit would have remained flattish instead of a 39% y-o-y dip. Portfolio of retail, office and hotels are expected to remain stable despite headwinds. The stock is trading at an attractive 0.7x P/Bk NAV which is conservative, with potential upside coming from value extraction via (i) realising value at listed associate UIC, or (ii) marking its hotel portfolio to market. Maintain BUY with our target price maintained at S$9.31.

1Q15 results for Overseas Education slightly below expectations, mainly due to a drop in enrolment in the junior schools as a result of the impending shift in campus from Patterson Road to Pasir Ris in August this year. We expect enrolment to stabilise from FY16 onwards. Maintain HOLD, TP reduced to S$0.96 (Prev S$1.02).

Super Groupreported 1Q15 results slightly below on weaker sales and margins. We continue to expect a slow recovery for the Group, supported by new product launches this year. Nonetheless, we are also cautious on growth going forward as the ASEAN region's general consumption outlook remains weak. We reduce FY15F/FY16F earnings by 5%/3% to reflect the sales weakness in 1Q15. Maintain HOLD with lower TP of S$1.45 (Prev S$ 1.46).

Excl. translational FX losses, 1Q15 core earnings of US$52m for Golden Agri Resources would have been below our/consensus estimates. The drop was attributable to lower CPO ASP and lower downstream margin y-o-y. FFB output guideline reduced to the lower end of 5-10% growth. Earnings forecasts and TP of S$ 0.45 unchanged for now.

Ezion's 1Q15 earnings were below expectations. Net profit slid 9% y-o-y and 15% q-o-q to US$41m, fell short of our US$50m estimate by 18%. Results were dragged down by lower than expected revenue of US$90m (-5% y-o-y; -14% q-o-q) and gross margins of 46.1% (-4.0ppt y-o-y; -4.5ppt qo-q). More update to follow after results briefing this morning.

SIA Engineering reported another quarter of disappointing numbers as 4Q15 net profit of $41.4m was down 37% y-o-y and 11% q-o-q. Revenue was down 11% y-o-y, dragged down by lower heavy maintenance revenue, offset to an extent by higher fleet management revenue. For full year FY15, earnings were down 31% y-o-y to S$183m. A final dividend of 8.5Scts a share was proposed, which implies total dividends of 14.5Scts for FY15, lower than our estimates of 16Scts. This is compared to 25Scts (including special dividends) paid out last year. Our forecasts, TP and recommendation are currently under review. Full note will follow after management briefing later this morning.

Vardrecorded net loss of NOK92m in 1Q15, despite higher revenues of NOK3.1bn (up 14.6% y-o-y) on the back of higher number of vessel deliveries during the quarter. While lower than our expectations, part of the losses are attributable to the sharp rise in unrealised forex losses amounting to NOK274m during the quarter. Forex losses arise due to US$ loans outstanding. Order wins have slowed down considerably, as expected, owing to the dip in oil prices and there was no new order intake during 1Q15. More details following briefing later today. We currently have a FULLY VALUED call on Vard with a TP of S$0.51.

Q & M Dental Group proposed acquisitions of eight dental clinics located island wide. Total consideration of S$20.3m is payable in cash and Q & M shares (S$10.85m in cash and S$9.45m in shares).

China Everbright Water has secured Ju County Chengbei Waste Water Treatment Project in Rizhao City, Shandong Province. The Project completed construction and commenced operation in June 2014, and has a designed daily waste water treatment capacity of 40,000 m3. China Everbright Water secured the Project on a TOT (Transfer-Operate-Transfer) basis for a concession period of 29 years, commanding a total investment of approximately RMB103m.

Ramba Energy said that it is in talks "with a party" for a potential investment into its drilling operations at its West Jambi block in Sumatra, Indonesia.

US stocks fell but recovered from session lows as treasuries stabilized from an earlier loss and the USD weakened. Greece managed to make a €750m payment to the IMF, that brought a temporary relieve for investors. But this was dashed on quickly as it emerged Greece had emptied an IMF holding account for the payment. Greece, as an IMF member, holds reserves from the IMF and must pay interest if those holdings are not kept at a certain level. Euro-area nations warned Greece still faces a battle to release financial aid.

Source: DBS

CSE Global (544)Bumitama Agri (P8Z)UOL (U14)Ezion (5ME)SIA Engineering (S59)Q&M Dental (QC7)China Everbright (U9E)Eneco Energy (R14)

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