DBS Equity Research: Wired Daily 21 Oct 2015

kiasutrader

Publish date: Wed, 21 Oct 2015, 04:43 PM

M1 - 3Q15 net profit of S$ 44.9m (+1% y-o-y, +1% qo-q) in line. Maintain FULLY VALUED with unchanged S$2.60 TP

M1's 3Q15 net profit of S$ 44.9m (+1% y-o-y, +1% q-o-q) was in line. Service revenues were flat while higher handset sales squeeze margins. M1 saw further loss of mobile market share to 23.1% versus 23.9% in 3Q14 and 25.3% in 3Q13. We expect further downside for M1 from potential entry of fourth player to be announced in 2Q16. We model 7% revenue share for the fourth mobile player by 2022 and expect a 10% adverse impact on M1's revenue in 2022 versus 4% for StarHub. Maintain FULLY VALUED with unchanged S$2.60 TP.

COSCO Corporation has secured contracts valued at approximately US$150m to build one (1) 22,000 DWT Product Oil Tanker, scheduled for delivery in the fourth quarter of 2016, and two (2) Cargo Transfer Vessels, scheduled for delivery in the third quarter of 2017 and first quarter of 2018.

SATS' aviation operating data for 2Q and 1H FY2015-16. All operating metrics improved in the second quarter of FY2015-16 except for cargo/mail processed. The increases in passengers handled, flights handled, and unit services were driven by both full-service and low-cost carriers. In the first half of FY2015-16, cargo throughput registered a slight decline, while both gross and unit meals recorded broadbased growth. Flights handled and passengers handled declined due mainly to the loss of Jetstar Asia account in October 2014. However, SATS has resumed service for Jetstar Asia and is also serving the other Jetstar branded airlines since July 2015.

Noble Group may lose its investment-grade credit rating if its liquidity position does not improve in the next one to two quarters, according to Moody's Investors Service. Moody's rates Noble at Baa3, the lowest investment grade. Noble is rated BBB- at Standard & Poor's, also the lowest investment grade.

CITIC Envirotech was awarded a RMB400m engineering, procurement, construction (EPC) contract to construct a 80,000 m3/day wastewater treatment plant (WWTP) in Tianshui City, Gansu Province, China. The project will commence immediately and it is expected to be completed in 18 months.

Boustead Projects (a 51%-owned subsidiary of Boustead Singapore) announced that it has been awarded two contracts in Singapore recently, with a total value of S$59m. The latest contracts will raise the Group's order book backlog (as at the end of June plus new orders since) to S$273m.

TA Corporation expects to report a loss for 3Q2015 and FY2015. In addition to provision for impairment loss of S$5m on its development properties that was disclosed in the Group's FY2014 financial results, the Group expects further impairment loss provision on these development properties in the light of continuing negative trend for the local private residential property market.

Broadway Industrial Group is expected to report a net loss for 3Q15. The loss is mainly attributable to the devaluation of the Renminbi against the US Dollar, resulting in unrealised mark-to-market fair value losses from forward and derivative contracts previously entered into by the Group to manage its net currency exposure.

Source: DBS

COSCO SHP SG (F83)SATS (S58)Boustead Proj (AVM)TA (PA3)Broadway Ind (B69)

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