Nam Cheong: Enter at Placement Price Before Record Results (BUY, S$0.255, TP: S$0.33)

Chart Source: Next View

Company Profile:
Nam Cheong is the largest Offshore Support Vessel (OSV) builder in Malaysia, specialising in small-mid
AHTS, PSVs and accommodation barges. It also operates a fleet of standby vessels.

Major Shareholders:
SK Tiong Enterprise Sdn Bhd (30%)
Hung Yung Enterprise Sdn Bhd (16.7%)
Su Kouk Tiong (8.6%)

Nam Cheong is set to report its strongest-ever results next Monday evening.
By our estimates, it will report RM50.8m for the quarter, trumping with ease
4QFY12’s RM26.4m. We are raising our FY12F estimate by 4.5% to RM138m,
implying 48% growth over FY12. The share price has retraced 11% since its
peak last month, and is now at the placement price of SGD0.255. We view
this as a very attractive entry point at 7.8x FY13F EPS.

Sold 9 vessels in the quarter out of 21 for the full year. 4QFY12 was a record
in many ways, with Nam Cheong closing almost half its full-year sales (which were
themselves a new high) in one quarter alone. Remember that Nam Cheong
recognises all revenue on work completed up to the point of sale immediately,
thereafter following percentage-of-completion, and this sets Nam Cheong up for
the strongest-ever financial performance.

Previous margin assumption too conservative. Raise FY12F EPS by 4.5%.
3QFY12 saw shipbuilding gross margins at 25%, a sharp rise from the 15%-18%
of the first two quarters. These high-margin works will continue in 4Q, and thus we
raise our full-year building margin expectation to 18.4%, implying 18% for the
quarter under preview. This increases our FY12F bottom line to RM138m from
RM132m.

Very strong ROE to be maintained. We continue to see strong growth in Nam
Cheong over the next three years, with ROE being maintained between 20% and
25%. We forecast net profit growth of 25%/14% over FY13F/FY14F, and these
estimates have not included the potential increase in the shipbuilding programme
that is likely to be announced next Monday.

Attractive valuation at 7.8x PE for largest OSV builder in the Eastern
Hemisphere. At the current price, which incidentally equals the recent placement
price, Nam Cheong is trading at only 7.8x/6.9x FY13F/FY14F EPS. This is
attractive for the largest OSV builder this side of the world, capturing almost the
entire Malaysian market, and being a major beneficiary of Petronas’ surging
capital expenditure budget. We continue to value Nam Cheong at 10x FY13F EPS
for a TP of SGD0.33.

(source: DMG Partners Research)

Swing Media May Rise On HK Dual Listing Plan

Swing Media to seek dual listing in Hong Kong
Singapore-listed data storage manufacturer Swing Media Technology (SWMT.SI)said it is planning a dual primary listing of its shares on the Hong Kong stock exchange. The firm's main manufacturing operations are in Hong Kong and one of its main markets is China. (source: http://www.theedgesingapore.com/the-daily-edge/business/13558-swing-media-to-seek-dual-listing-in-hong-kong.html)

According to DJ News,Swing Media Technology (5BQ.SG) may head higher on hopes dual listing in Hong Kong will see shares attract more interest, improve valuation.
Company says listing is, "expected to enhance the reputation of the company in China;" is also "important for its long term growth and development" and "will broaden the company''s investor base and improve the liquidity of its shares."

DMG Partners maintain BUY TP at SGD0.105. With Swing Media announcing that its tie-up with PetroChina to venture into the solar indurtry has been on track. The company's strategy of branching out of its core optical media manufacturing business and into clean technology is therefore looking to be promising. In addition, DMG Partners has highlighted that the market may also rerate this stock for its exposure into the solar industry which is expected to yield higher profit margins as to its optical media division. Besides, Swing Media revealed that Shanghai Hui Yang New Energy Technology (SHY) has been awarded a contract to install solar powered energy systems in 20 petrol stations for China's biggest oil producer, PetroChina.SHY is to be 80%-owned by Swing Media through a sale and purchase agreement that was previously announced during Oct 09. (source: DMG Partners Research)


Strategy:
Prefer buy: SGD0.055 or below

StarHub rated HOLD

(chart source: chartnexus)

Company Profile: StarHub Limited is a Singapore-based provider of mobile, Pay TV, broadband and fixed line services.

Major Shareholder:
1. Temasek Holdings (49.1%)
2. NTT Investment (10.0%)

Dividend accumulated for the year : SGD0.18 ONE-TIER TAX

AmFraser Research in an Oct 21 research report says: "Recent price fall reflects much negative impact from the loss of key sports content in the Barclays Premier League (BPL) and ESPN Star Sports. We have cut our EPS forecasts by 5% in FY2010 and FY2011, based on a worst case scenario of StarHub losing all sports pack revenues and a 10% cable TV subscriber migration.

"Strpping off $80 million in expenses on a full year basis from 2H 2010 revises our EBITDA forecast margin for FY2011 from 31.3% previously to 31.7%. We have lowered our fair value to $1.94 - based on a DCF approach - revising our terminal growth assumption from - 5% to -6% on the back of reduced opportunities and increased competition in the Pay TV market. StarHub is currently trading close to our fair value. HOLD"

(source:http://www.theedgesingapore.com/component/content/8937.html?task=view)

Strategy: Hold at this level while support is mainly at SGD1.85. Anything below SGD1.90 is worth buying.

United Envirotech bags contract for Phase 1 building of wastewater recycling plant in China for $29.5m

Mainboard-listed United Envirotech, one of the leading membrane-based water and wastewater treatment solutions providers, says it has secured a contract to build and operate a 160,000 cubic metres/day wastewater treatment and recycling plant in Hegang City, Heilongjiang province, China, for a concessionary period of 30 years.

The BOT project will consist of two plants both slated for completion over two phases.

Phase One of the project will comprise the building of the wastewater treatment and recycling plant with treatment capacity of 80,000 cubic metres/day to be completed by next October.

Together with the construction of common facilities, the total cost of investment for Phase One is estimated to be RMB145 million ($29.5 million).

(source:http://www.theedgesingapore.com/the-daily-edge/business/9001-united-envirotech-bags-contract-for-phase-1-building-wastewater-treatment-plant-in-heilongjiang-for-596m.html)

Gambling boost - Genting Singapore

Kim Eng Holdings Ltd.’s Singapore-based property analyst Wilson Liew said price increases were more subdued for landed and luxury properties only because buyers in that segment typically tend to exercise more caution.

“Because of the absolute quantum that’s required to purchase such apartments, some people are waiting,” Liew said in a phone interview before today’s price statistics. “Buyers want to see the integrated resorts become fully operational because they’re targeted at bringing in the high-rollers. If they put Singapore in the limelight, more people will start putting their money in.”

Genting Bhd., Asia’s biggest publicly traded casino operator, may open its $6.6 billion resort in Singapore before the end of 2009, CIMB Investment Bank Bhd. said Aug. 4 after a recent visit to the site, while Las Vegas Sands Corp. aims to open its casino-resort on the island by February.

Singapore Tourism Board Oct. 12 stuck to its forecast of attracting 17 million tourists to the city-state by 2015 and tripling tourism revenue to $30 billion.

(source:http://www.theedgesingapore.com/component/content/8994/8994.html?task=view&start=1)