DBS Equity Research: Wired Daily 26 May 2015

kiasutrader

Publish date: Tue, 26 May 2015, 03:54 PM

Yoma Strategic - Non-real estate business to pick-up the slack of a slow-down in property sales momentum. Maintain BUY, TP adjusted lower to S$0.78

The Singapore economy grew a better-than-expected 2.6% y-o-y in the first quarter of 2015, despite a contraction in the manufacturing sector. This beat both the initial flash estimate of 2.1% growth, and the market's expectation of 2.2%. Due to the decline in the output of the transport engineering, electronics, and biomedical manufacturing clusters, the manufacturing sector contracted by 2.7% y-o-y, extending the 1.3% decline in Q4 2014. Growth in the services sector accelerated to 3.1% y-o-y in Q1, up from 0.7% in the previous quarter. On a q-o-q basis, the Singapore economy grew 3.2%, far higher than the flash estimate of a 1.1% expansion. The Singapore government maintained its 2015 full-year growth forecast of 2-4%.

Singapore's non-oil domestic exports registered a 4.8% y-oy growth in the first three months of 2015, compared to the 0.5% rise in the final quarter of 2014, thanks to the higher shipments of both electronic and non-electronic NODX. Non-oil re-exports jumped 5.2% after a 1.8% increase in the previous quarter. The government maintains its total trade and NODX growth forecasts for 2015 at minus 7.0 to minus 5.0% and 1.0 to 3.0% respectively.

4Q15 results for Yoma Strategic Holdings in line. Property sales momentum expected to moderate as competition rises but the non-real estate business segments like automotive business and tourism segments are expected to contribute positively. The group is also on track to open its first "KFC" in 2016 and its planning another 2 more outlets in FY16. These initiatives under-taken by management are expected to propel the group towards diversifying its earnings base, deriving 50% of its revenue from non-real estate segments. Maintain BUY, TP adjusted to S$0.78 (Prev S$ 0.82). The drop is mainly due to push-back in sales assumptions for its projects.

Mapletree Logistics Trust acquires two assets in Vietnam and Korea for S$42.2m. These properties offer strong tenancies with high returns of 10% and 8% respectively. Stock is attractive offering 6.2-6.3% yields but given limited upside to TP of S$1.29, our HOLD call is maintained.

Frasers Centrepoint Ltd on Monday listed its seven-year retail bonds on the Singapore Exchange mainboard under the stock code "AXXZ". This is its first retail bond offering. The bond has a coupon rate of 3.65% per annum with a sevenyear tenure. The total issue size for the bond is S$500m.

IEV Holdings has been awarded a Gas Sale & Purchase Agreement (GSPA) from PT Kaldu Sari Nabati for the supply of compressed natural gas (CNG) to its manufacturing plant in Rancakekek, West Java, Indonesia for a period of two years.

Singtel wishes to remind holders of Singtel CHESS Depositary Interests (CDIs) that trading in Singtel CDIs on the Australian Securities Exchange (ASX) will be suspended on and from 29 May 2015, and Singtel will be removed from the official list of the ASX on 5 June 2015.

China Essence Group expects to register a net loss for FY Mar 2015. The Group reported no sale occurred during 1Q, 2Q & 3Q FY2015.

Singapore core inflation is at its lowest in five years. April's core inflation, which strips out the costs of accommodation and private road transport, fell to 0.4% y-o-y, compared to 1% the month before. Overall inflation eased to -0.5% in April from -0.3% in March. April's lower-than-expected inflation rates were due to transient factors, such as sharper price declines in oil-related items and a moderation in services inflation. The softer rental market and weaker Certificate of Entitlement (COE) premiums also remained a drag on headline inflation, as expected. Services inflation eased to 1.1%. Meanwhile, food inflation was stable at 2.1%.

Source: DBS

Yoma Strategic (Z59)Mapletree Log Tr (M44U)Frasers Property (TQ5)Medi Lifestyle (5TN)Singtel (Z74)

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