| | |MARKET PULSE: Ezion, KepCorp, UOL | |----------------------------------------------------------------------------------------------------------------------------------------------------| | 17 Apr 2014| |----------------------------------------------------------------------------------------------------------------------------------------------------| |KEY IDEA | | | |Ezion Holdings: New contracts and new strategic investors | |Ezion Holdings recently clinched two service rigs charter contracts worth a total of US$78.7m, bringing its YTD order wins to US$260.3m. We believe | |this underscores Ezion’s dominant position in the service rigs market, especially in the Asia-Pacific region. Separately, Ezion also announced that | |it will issue 100m new shares (7.7% of Ezion’s enlarged share capital) to two subsidiaries of Hong Leong Company (Malaysia) Berhad (HLCM) at S | |$1.94/share, thus raising gross proceeds of S$194m. As the Chairman and CEO of HLCM is Tan Sri Quek Leng Chan, Ezion believes it will be able to tap| |on his vast experience and network, and has plans to increase its penetration into the Malaysian oil and gas market. We take into account these | |developments, and pare our FY14 and FY15 core EPS projections by 6.2% and 3.5%, respectively. Maintain BUY on Ezion, albeit with a reduced fair | |value estimate of S$2.41 (previously S$2.57). (Low Pei Han and Andy Wong) | | | |MORE REPORTS | | | |Keppel Corporation: A steady quarter | |Keppel Corporation (KEP) reported a 8.6% YoY rise in revenue to S$3b and a 5.1% fall in net profit to S$338.7m in 1Q14, and within expectations. | |Excluding one-off gains in 1Q13, net profit in 1Q14 was largely in line with that in 1Q13. Operating margins in the O&M segment remain healthy at | |14.6% in 1Q14, and construction of the semi-submersible rigs for Sete remains on track. On the infrastructure side, we understand that no provisions| |were made for the Qatar project in 1Q14. The O&M division secured S$1.9b of new orders in 1Q14, and it is expected that the ongoing bifurcation | |towards premium assets and the replacement of old rigs should continue to support order momentum. As at end 1Q14, the net orderbook stood at a | |record S$14.4b with deliveries till 2019. Maintain BUY with S$12.25 fair value estimate. (Low Pei Han and Carey Wong) | | | |UOL Group: Top bid for Prince Charles Crescent site | |Last evening, a consortium comprising UOL Venture Investments and Kheng Leong put in the top bid of S$463.1m in the government land sales tender for| |a residential land parcel at Prince Charles Crescent (Parcel B). The tender attracted seven bids and UOL’s bid was 5.2% above the second highest | |bidder. The site has a land area of 268.7k sq ft with a plot ratio of 2.1, and is located in an established residential estate within a 10-min drive| |to Orchard Rd and the city center. UOL’s top bid translates to a price of S$821 psf GFA, and we forecast breakeven and selling prices for this | |project at S$1.35k psf and S$1.60k psf, respectively. These estimates are fairly in line with prices at nearby Alex Residences and Echelon, and the | |selling price yields a reasonable margin of 16%. We note that UOL’s top bid of S$821 psf GFA is 15% lower than that for the neighboring site awarded| |in Sep-12 and reflects falling land prices given a weakening housing outlook. Pending the award of the site, our fair value estimate remains | |unchanged at S$6.95. Maintain BUY. (Eli Lee) | |----------------------------------------------------------------------------------------------------------------------------------------------------| | | | | |NEWS HEADLINES | | | |- US stocks rallied Wed, and three days of gains sent the benchmark S&P 500 into positive territory for the year. | | | |- Fewer Singapore businesses have M&A plans in the next three years than they did a year ago, said Grant Thornton in its International Business | |Report. | | | |- StarHub has become the first telco to bite the 4G bullet, saying on Tue that it will start charging mobile subscribers S$2.14 per month for using | |its 4G service in Jun this year. | | | |- Cambridge Industrial Trust has posted 1Q14 DPU of 1.251 S cents, a 1.4% increase YoY. | | | |- QT Vascular is aiming to raise S$55m in what is so far the largest IPO on Catalist this year. The offer is by way of placement, with 196.4m new | |shares priced at 28 S cents apiece. | | | |- Sabana REIT’s DPU fell 22% YoY to 1.88 S cents/unit for 1Q14. | | | |- Global Logistic Properties has leased 34,000sqm of space to a leading smartphone manufacturer at GLP parks in six cities across China. | |-----------------------------------------------------------
Posted on: Thu, 17 Apr 2014 02:34:10 +0000
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