DBS Equity Research: Wired Daily 19 June 2015

kiasutrader

Publish date: Fri, 19 Jun 2015, 05:21 PM

Super Group - Recovery in progress, but along a gradual pace. Maintain HOLD, TP: S$1.25

We maintain our HOLD call for Super Group with a lower TP of S$1.25, pegged to a lower 20x FY16F PE, in line with its average valuation over the last four years. We believe earnings recovery momentum will be back-end loaded beyond 2H15F. Management may be lining up new products for launch over this period, but regional consumer sentiment remains tepid. Whilst we expect Super's earnings to have bottomed and recovery should be currently in progress, we believe it will be of a gradual pace.

Riverstone Holdingshad awarded to a company incorporated in Malaysia for the construction of a new glove factory building under Phase 3 in Perak, Malaysia. Total contract sum is approximately RM15.77m. Construction of the new glove factory building is expected to be completed by early of second quarter of 2016. The new glove factory building will be constructed to house production facilities which can potentially add a production capacity of approximately 1.0 billion gloves. This follows from the completion of the Phase 2 factory building this year where work on an additional 6 production dipping lines costing approximately RM19.13m is being installed. Upon their anticipated completion by the third quarter of this year, they will increase the Group's production capacity by approximately 1.0 billion gloves to 5.2 billion gloves per annum.

Ley Choon Group Holdingswas awarded a S$24.8m contract from the Changi Airport Group to resurface the taxiways at Changi Airport. Project commenced on 15 June 2015 and is expected to complete by 14 February 2017. Unfulfilled order book based on secured contracts stood at S$184.7m as at 30 April 2015, keeping the Group busy with projects for next two years.

SunMoon Food Companyis taking 51% stake in China fruitselling venture. It has proposed to acquire a 51% stake in Harvest Season Singapore. This will be paid for through an allotment and issuance of 60m new shares at 5.18 Scts per share, which works out to about S$3.11m. The new shares constitute approximately 18.82% of SunMoon's current issued share capital.

Noble Group will supply a single liquefied natural gas (LNG) cargo to Egypt in late June after winning a closed tender launched two weeks ago, trade sources said. Egypt launched the tender to procure one additional LNG cargo this month but invited only Vitol, Trafigura and Noble Group, one of the sources said.

In property news, Evia Real Estate-led consortium's top bid for a 99-year private condo site in Toa Payoh at a state tender was just 1.1% more than the closest competition. The group plans to build a 590-unit project on the site. Evia Real Estate joined forces with Maxdin and Malaysia-listed group Gamuda to place the top bid of S$345.86m or S$755.30 psf per plot ratio for the 1.2 hectare site at Lorong 6/Lorong 4 Toa Payoh. The tender drew 14 bids.

US stocks rallied as investors reacted to the outlook for a gradual pace to rate hikes. The FED signaled this week that it won't be raising rates quickly as officials seek more decisive evidence of a rebound in growth. Meanwhile in Eurozone, leaders there called an emergency summit after Greece failed to reach a deal with creditors. The ECB was said to be considering a Greek request for more bank aid, with an extraordinary meeting of euro-leaders set for Monday after talks on Thursday faltered, this according to Bloomberg. The IMF has said Greece will immediately be considered in default unless it pays about about €1.5bil due to the fund by month's end.

Source: DBS

Riverstone (AP4)Ley Choon (Q0X)SunMoonFood (AAJ)

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