THE EDGE ISSUE - SEP 03 - SEP 09, 2007.

COVER PAGE : Waiting out the STORM - Close to 80% of retail funds in Singapore lost money during the last three months.
COVER STORY : Equities still the preferred asset class(Page PW 2)
COVER STORY : Brazil valuations and earnings grow attractive(Page PW 4)
Doors to world's biggest casino open (Page 4)
S&P's Corbet leaves amid subprime fallout (Page 4)
Global overview : Who's the borrower ? (Page 6)
Tan Kim Seng's son among C2O's new investors (Page 8 )
Aussino lays the foundation for next growth spurt (Page 10)
Thorns in DBS's ROSA (Page 12)
Hotung now on a stronger footing, looks to China for new investments (Page 14)
WesTech's new share placement unlikely to satisfy all its funding needs (Page 16)
Pan Hong expands landbank amid heightened nervousness (Page 18 )
Cash is not always king (Page 18 )
Bouncing back with Centillion (Page 21)
Linair earnings soar on booming business in China, prepares for push into Mid East (Page 22)
Soft options for hard drives (Page 23)
Magnecomp's sale of HDD business a sign of industry maturity (Page 23)
Nokia's new door to revenue (Page 24)
Malaysian carriers flying high (Page 25)
Should Singapore worry about rising inflation ? (Page 26)
Why some nations stumble, others soar (Page 27)
When floodgates of Chinese capital open (Page 28 )
Another volatile week (Page 29)
Uni-Asia Finance : Riding the ship-financing and asset management wave (Page 30)
Buyout funds face elusive returns (Page 31)
Kuik family ups stake in Sim Lian Group (Page 34)
Fighting for quality (Page 40)
Dog days for the market (Page 40)


CITY & COUNTRY:

Ascendas India Trust : Ahead of the Game (Page CC 1)
Foreign investor appetite in India still strong (Page CC 5)
Mumbai rents are at 'exorbitant' levels (Page CC 6)
UK Lenders tighten subprime credit (Page CC 6)
Billionaire Adelson weighs India, Japan plans at Macau opening (Page CC 7)


BROKERS DIGEST:

Chemoil Energy (Aug 60: 62.5 US cents) TP: US$1.02
BUY (initiating coverage). Chemoil is a global leader in the marine-fuel supply chain. Chemoil has a very strong track record of delivering growth, which we expect will continue. The main drivers for the company's earnings growth will be the US$300 million ($457.5 million) capex programme, which should improve operational efficiencies such that the gross contribution per tonne increases from US$9.10 per ton in 2006 to US$10.50 per ton in 2008-09F. We estimate sales volumes will increase by 5% per annum, which is above the industry growth rate of 4% in the past decade, We derive our target price of US$1.02 (70% potential upside) using a three-stage DCF valuation, assuming a weighted average cost of capital (WACC) of 8.87%. - ABN Amro Research (Aug 27)

GuocoLand (Holdings) (Aug 30: $4.72) TP: $5.55
MAINTAIN BUY. 4Q2007 revenue grew 506% y-o-y to $361 million with profit after tax and minority interest increasing 262% to 194.7 million. This was due to higher contributions from projects in Singapore and Beijing, as well as revaluation of their investment properties, mostly from Tung Centre in Collyers Quay ($116.3 million) and the gain on the sale of BIL ($19.3 million). Cash and cash equivalents increased to $1.1 billion after it issued $690 million worth of convertible bonds in April. GuocoLand is proposing a final cash dividend of eight cents per share, the same as last year. We have fine-tuned our FY2008 and introduced FY2009 numbers and maintain a target price of $5.55, with a 10% premium due to its multinational exposure. - DBS Vickers Securities (Aug 27)

Rotary Engineering (Aug 30: $1.19) TP: $1.53
MAINTAIN BUY. Rotary recently reported a strong set of 1H2007 results, with turnover of $272 million and a record net profit of $28 million. The increase in turnover was largely due to revenue recognition from several ongoing projects on Jurong Island, namely the $547 million Universal Terminal project, which is 80% completed. We are revising up our revenues from $490 million to $549 million in FY2007 and from $537 million to $608 million in FY2008. Subsequently, our net profit estimates have been raised to $46.y million in FY2007 and $50.2 million in FY2008. We value Rotary on 18x PER FY07/08 blended earnings, a slight discount to the industry average PER of 21x. Our fair value estimate for the stock is raised by 27.5% to $1.53. - OCBC Investment Research (Aug 28)

China Haida (Aug 30: 24 cents) TP: 43 cents
MAINTAIN BUY. CH delivered revenue of 219.2 million renminbi ($44.3 million) in 1HFY2007. Gross margin suffered a 3.4 percentage point cut to yield a gross profit of 181.4 million renminbi, as a result of higher raw materials costs for aluminium panels. Profit before tax grew 12.8% while net profit after tax plunged to 17.1 million renminbi, 8.8% below 18.7 million renminbi in 1HFY2006. This is due to the cessation of concessionary tax rates of 12% and the application of the full tax rate of 27% and the inclusion of some non-tax deductible items. CH is trading at 5.5x FY2007F PER and 4.1x FY2008F PER. Our target price of 43 cents is derived on 8x FY2008F EPS. At the current share price of 26 cents, it is supported by 1x P/NTA FY2008F and 0.1x PEG FY08F. - Westcomb Securities (Aug 27)

Hiap Seng Engineering (Aug 30: 83.5 cents) TP: 84 cents
MAINTAIN BUY. The group recorded impressive FY2007 revenue and profits. Turnover grew 63.1% to $180.8 million, driven largely by the strong uptake of compression and process projects. Operating profits surged by 171.6% to $18.56 and profits attributable to shareholders grew 175% to $15.436 million. Gross margin for FY2007 improved to 17.66% from 13.36%, driven by the conscious efforts in project management control and cost controls. Its order book currently stands at about $226.2 million. With the current buoyancy of the oil and gas industry, we expect its full-year order book to be about $300 million. Using a DCF model, the fair value of Hiap Seng is pegged at 84 cents. At the current price of 81 cents, the counter offers an upside potential of 16%. - NRA Research (Aug 29)

SMB United (Aug 30: 36 cents) TP: 54 cents
MAINTAIN HOLD.SMB United reported a good set of 1H2007 results with net profit of $8.9 million on revenue of $76.8 million. The 1H2007 performance included a gain of $3.1 million from the divestment of Oculus shares (balance of $3.3 million to be booked in 2H2007) and reversal of provision for doubtful debt of $1.6 million. SMB United has declared special dividend of 1.3 cents per share as a distribution for the gain of $6.4 million from the divestment of 22.5 million Oculus shares. We forecast earnings growth of 57.1% in FY2007, driven by volume and margin expansion for switchgear business. We expect earnings growth of 40.5% in FY2008, driven by contribution from contracts related to the integrated resorts. Our target price is 54 cents based on FY2008 PER of 15x. - UOB KayHian (Aug 24)

Federal Int'l (Aug 30: 78.5 cents) TP: $1.03
BUY (initiating coverage). The company has over the past two years made great strides into new businesses and is now reaping the profits of its labours. From a valve trading business, Federal now manufactures oil-and-gas equipment; owns a floating, storage and offloading vessel; has a contract for a power generation plant; and has delved into several joint ventures to expand its revenue base and create more recurring incomes. Federal's order book currently stands at about $229.5 million and we see them actively growing their base with more long-term contracts. FY2007 should see a 44% growth while expectations for FY2008 are at 25.6% net profit growth. Target price is $1.03, citing an upside of 36.8%. - OSK Research (Aug 28)

Olam Int'l (Aug 30: $3.02) TP: $3.57
MAINTAIN BUY. Olam announced a FY2007 net profit of $109 million, up 25.0% y-o-y. This was in line with our estimation of $109.5 million. On a per share basis, Olam recorded a 7.01 cents EPS for FY2007, a 25% increase from the 5.61 cents achieved in FY2006. Strong growth is driven by growth in sales volume and net contribution across all business segments. In our valuation model, we assume an average growth rate of 26% compound annual growth rate over the initial high growth period from FY2008-13 inclusive. Most of the five major acquisitions announced this year are expected to be earnings-accretive by mid-FY2008. Our valuation yield a fair value of $3.57, which translates to a FY2008 PER of 40.4x and P/BV of 10.8x. - Phillip Securities Research (Aug 30)

Thai Beverage Public Co (Aug 30: 25 cents) TP: 24 cents
MAINTAIN SELL. The Thai cabinet passed higher excise taxes on liquor and cigarettes, effective Aug 29. The new tax increases should affect Thai Beverage's white spirits, its Hong Thon brown spirits and its mid-range Scotch whisky products. Sangsom brown spirits products appear unaffected. We see a lack of growth drivers for Thai Beverage and believe the company also faces emerging threats, which could cause sales to decline. Our 24-cent target price for ThaiBev is based on our DCF analysis, which uses a WACC of 9.2% (beta of 0.75) and models a time horizon to 2014. Therafter, we assume a realistic 2% terminal growth rate. Based on our DCF valuation, the implied target PER is 11.5x FY2007E EPS. - Citigroup Research (Aug 28)


PERSONAL WEALTH SECTION:

Fund strategy in a volatile market (Page PW 1)
Commodity funds trounce falling stocks (Page PW 5)
Hedge fund investors trying to redeem the unknown (Page PW 5)
The Fed, investor confidence and volatility (Page PW 8 )


VOLUME MOVERS:

Centillion Environment and Recycling Ltd
Oculus Ltd
LC Development Ltd
Lian Beng Group Ltd


HOT STOCKS: THE TIDE GOES OUT FOR SOME MARINE STOCKS

COSCO CORP - Superior relative strength (Support at $4.62, a successful break above $5 mark indicates a target of $6.30)
Labroy Marine - Breakdown (A break below $2 indicates a target of $1.65)
Sembcorp Industries - Possible retreat (Resistance at $5.50. A pull back is likely to $5.25. A Break below this level will lead to a downside of $4.64)
Keppel Corp - Rebound ahead (Support at $12.30, Next upside is $14.00)
SembCorp Marine - Testing resistance, attempting breakout (tp = $4.80)
ASL Marine - Could break down (tp = $1.20