SINGAPORE DAYBOOK : IPOs take a back seat in rocky stock market. Januarys four share sales, which raised $433.3m in gross proceeds, see mixed fortunes. [SINGAPORE] The anaemic stock market has taken the wind out of the sails of the initial public offering (IPO) market here. While January began on a bullish note with four listings that added more than $1 billion in value to the market - compared with the lone listing of Logistics Holdings in the same month last year - the next few weeks or even months could see a lull in IPO activity as potential issuers wait for the market to calm down. IPOs will definitely be reconsidered, said CIMB market strategist Benjamin Goh. Certainly companies dont want to issue their shares in a downward spiralling market. On Monday, the Straits Times Index fell below 3,000 points, a psychological support last breached in November 2012, on concerns over weakness in emerging markets, hints of an economic slowdown in China and a further reduction in the US Federal Reserves quantitative easing programme. (Source: The Business Times) MARKET SCOOP Yongnam back in running for Myanmar airport project Otto Marine sold 2 vessels for US$30m Lotte Shoppings IPO gains SGXs approval Global Invacom mulls secondary listing on Londons AIM SRC gets shareholders nod for US$500m mogas/cogen project (Source: The Business Times) PHILLIP Securities says … FIRST RESOURCES | BUY | TP: S$2.35 First Resources plantations are 8 years old on average, and 58% of its planted area (as of end 3Q13) is less than 7 years old Albeit FFB yield declined in 2013 due to newly-acquired assets and biological down trend, we see strong productivity gains over the next few years as its young estates mature We expect a 17% CPO production growth in 2014, buoyed by yield recovery from biological cycle First Resources growing production plays a key role in driving its 12% 2-year 2013F -2015F EPS CAGR, with increase maturity of its plantations Conservatively, we have modeled in a flattish CPO price from 2014 onwards, as we are neutral on the CPO price outlook in the near term on rising global oilseeds supply We estimate every 10% increase in our CPO price forecast will add ~S$0.51 per share (~22% to our valuation) First Resources is one of the cheapest Plantation stocks within the ASEAN space (9.9x 2015F P/E versus an average of 13-15x for peers) Our DCF (WACC 10.6%) based target price for First Resources is S$2.35 (19.9% potential upside including dividend yield) We initiate coverage with an “Accumulate” rating Downside risks includes prolonged plunge in CPO prices, weaker-than-expected production output UOB KAY HIAN says … REX INTERNATIONAL | BUY | TP: S$1.27 We are upbeat on the oil find in Oman as it will not only generate profit, if resources are found commercially viable But also further validates Rex’s claims on the effectiveness of its technology With its proprietary Rex Technology, Rex has also displayed its ability to constantly secure new concessions with its most recent win in the APA 2013 With the slew of positive news flow, we believe share price is poised for a recovery after it was heavily beaten down on negative sentiment in the broader market Prices have also seemed to have stabilised near S$0.53/54 We expect news flow from the company to be strong this year with Rex’s plans to start its drilling campaign in other concessions Drilling campaign for Trinidad and Tobago is expected to commence in 1Q2014 MAYBANK KIM ENG Securities says… GENTING SINGAPORE | SELL | TP: S$1.31 Assuming Resorts World Sentosa (RWS) commands a 47-48% VIP volume share We can expect GENS to also report 4Q13 VIP volume contraction of ~17% YoY to ~SGD16b This would bring RWS’ 2013 VIP volume to SGD74.5b, in-line with our forecast of SGD75.3b For mass market GGR, if RWS retained its 3Q13 market share of 44% in 4Q13, we estimate its 4Q13 mass market GGR would have eased by 5% YoY This would bring its 2013 mass market GGR to SGD1.7b, or a tad below our forecast of SGD1.8b GENS will release its 4Q13 results on 20 Feb 2014 While likely to be within expectations, we expect it will report a sequentially higher 4Q13 EBITDA of ~SGD350m and net profit of ~SGD200m As we do not think its VIP hold rate will be as poor as MBS’ We leave our estimates unchanged for now Nonetheless, we believe the consensus is too bullish on GENS’ earnings outlook And it is still premature to assign any “Japanese casino” option value to its share price as request for proposals are only likely to be issued in 2015, at the earliest Maintain SELL on GENS and TP of SGD1.31, based on 10x FY14E EV/EBITDA
Posted on: Wed, 05 Feb 2014 02:28:15 +0000
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