DBS Equity Research: Wired Daily 15 Jan 2016

kiasutrader

Publish date: Fri, 15 Jan 2016, 11:58 AM

Ezion - Trimmed FY16-17 net profit by 28-32%, after imputing a higher discount on average charter rates. Ezion remains our preferred Oil & Gas pick.

We reiterate our BUY call on Ezion, TP is unchanged at S$1.00, pegged to 0.8x P/BV. Rerating catalysts stem from earnings recovery with the resumption of service rigs currently under repair/upgrades in 1H16, delivery of newbuild liftboats, and successful diversification of customer base to win new charter contracts, while minimising rate reduction pressure from O&G customers. We have trimmed our FY16-17 net profit by 28-32%, after imputing a higher 15% discount (5% previously) this year and a further 5% next year on average charter rates. Ezion remains our preferred Oil & Gas pick.

4Q15 results for Cambridge Industrial Trust in line. Earnings outlook remains weak as vacancy rates are expected to inch up slightly from current 5.7% from future asset conversions. HOLD call, TP S$0.61 maintained. A high yield of 7.9% is likely to limit stock downside.

Perennial Real Estate Holdings(PREH) signed MOU to establish a JV (40-40-20) with Shanghai Summit and

Shanghai Renshoutang to set up eldercare and retirement home in Chengdu (Chengdu Xiehe Home). Total investments is about RMB150m. PREH plans to convert Chengdu Plot D2 (previously mixed-used residential and retail development) into eldercare and retirement home, leveraging on its close proximity to the Chengdu ParkwayHealth Hospital, expected to begin operations in 2H2017. Based on the preliminary information, we view this as positive as this allows PREH to recalibrate their strategy to ride past the challenging property market in Chengdu currently. In addition, with a relatively small investment cost, this could potentially provide a long-term stable recurring rental income. Maintain BUY call with TP S$1.32.

Fitch Ratings has affirmed Noble Group's investment-grade ratings after rival agencies cut the commodity trader to junk, while warning that any sign of deterioration in the company's ability to access unsecured bank funding could put that assessment in jeopardy. The company's long-term foreign-currency issuer-default rating and senior unsecured rating were both affirmed at BBB-.

Jumbo Group announced the opening of its third Jumbo Seafood outlet in Shanghai, PRC. Located at Shanghai International Finance Centre, Pudong. This latest restaurant is poised to bolster the Group's revenue contribution from the PRC. Jumbo plans to establish at least three additional F&B outlets in the PRC and/or Singapore within the next two years.

A consortium led by Frasers Centrepoint that placed the top bid of S$624.2m, towards the high end of market expectations, for a 99-year site near East Coast Park is planning to build an 800-to-900-unit condo designed to maximise seaview-facing units. In all, eight bids were received for the 1.9-hectare land parcel along Siglap Road near the junction with East Coast Parkway and in close proximity to the beach. The highest bid, which translates into S$858 psf ppr, was 4% above the second highest offer of S$825 psf ppr.

Source: DBS

Ezion (5ME)ESR-LOGOS REIT (J91U)Jumbo (42R)

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