Singapore Stock Recent News and Stock Brokers’ Reports (5-7 Sept)

Dowjones reported that Singapore listed company Sunningdale Technology +13.4% to 8-week high of S$0.47 in active trade on renewed speculation plastic components maker will be acquired. According to current rumor circulating among traders, at least
2 parties expressing interest, with offer price tipped at S$0.50/share.
"I suspect it's Temasek Holdings selling out and somebody is buying,"
says analyst, who doesn't want to be named; "I doubt there's going to be a bidding war because under the current market scenario, investors are a lot more cautious in terms of raising money given the possible credit crunch." Tips private equity fund as possible buyer; "we haven't heard fellow companies expressing an interest." According to company's 2006 annual report, Temasek Holdings owns 7.42% of Sunningdale. Sunningdale spokesman says firm not aware of any offer.

DMG :

Hor Kew Corporation is a recovery story, built on twin drivers of

scaling up residential development income and reversing losses from

construction and pre-fabrication operations. Sizeable contributions from

its 2 projects, One Oxley Rise and the upcoming East Coast Rd

development, are underpinned by high average selling prices and low

breakeven costs. Greater prefabrication volume coupled with improving

margins should support a turnaround in manufacturing contributions.

Meanwhile, potential for increasing construction profits, in tandem with

the robust industry, could provide room for earnings upside surprise.

Enhancement of shareholder value through renewing older industrial

assets could add another 2-3cts to asset backing. Recommend Buy with a

price target of $0.28.

CIMB maintains OUTPERFORM call on singapore stock China Hongxing Sports

CIMB comments :
"Brand visibility precedes pricing power
Although Hongxing may be trailing Li Ning in terms of brand recognition and retail presence, Hongxing has the ability to further raise ASPs given
that its products are still affordably priced at approximately Rmb250-290 in the mid-end segment. The group has also been increasing retail footage
for apparel and accessories. We project prices for these products to rise as well with new designs and improvement in product mix. We caught up
with management recently to gain further insight into its expansion plans for FY07-08 in view of the upcoming Olympics. To assist its distributors
with the opening of the additional 400 stores while mitigating credit risk, Hongxing will be sub-leasing stores to distributors who will continue
to bear operating expenses and inventory risk. We have fine-tuned our estimates to reflect higher gross margins.
Reiterate Outperform, with an unchanged target price of S$1.20 based on 24x CY08 EPS, which translates into 29x CY08 FD EPS, in line with China
sports shoe peers' average."

UOB technical analysis comments for singapore stock market and stocks :

Singapore bourse- The index had rebounded past recent high of 3442 yesterday to close at 3466. This does not change the overall cautious view. We think that the index will gradually head higher on low volatility as market players await the FOMC meeting on September 18. The low volatility could benefit some of the small cap stocks and REITS.

We feature some of these stocks.

1. China XLX- After falling from a high of $1.45, the stock has managed to establish a base near $0.90-0.925. Volume has also picked up significantly over the past 2 days suggesting increasing interest in the stock. Some of the resistance levels to watch out for are the $1.05 and the $1.13 level.
The double bottom pattern suggests that resistance at $1.13 will very likely be tested.

2. Beng Kuang Marine- We like the stock because it had gradually inched up forming a series of higher highs and lows. This suggests that the stock is re-establishing an uptrend. A 62% retracement of the recent decline could see the stock head up towards $0.87.

3. Ascendas Reit- Stock had fallen sharply from a high of $3.30 to a low of $2.30. At overnight close of $2.42, the stock offers a yield of 5.2% for FY07. We think the stock could potentially head towards $$2.65-2.70 in the near term.

BNP maintains BUY on singapore stock SIM LIAN – TP: SGD1.06

"Riding high on construction and property booms
Good progress; Maintain BUY with TP at SGD1.06 Sales of the four projects launched – Viz@Holland, Bleu@East Coast, Premiere and Carabelle - have been overwhelming, with almost all sold. Given its significant land bank of 2.4m sq ft GFA, we project Sim Lian will continue to achieve strong growth in the next three years. We maintain our BUY with revised target price to SGD1.06 from SGD1.00, and raise our profit estimates for FY08 and onward, reflecting higher margins, together with higher construction order book expected.

Contractor-cum-developer – Leveraging the construction boom Recently, BCA revised its construction demand forecast for 2007 upward to between SGD19b and SGD22b. With its outstanding capabilities and strong construction outlooks in Singapore, we believe that Sim Lian is able to grow its external order book and handle its own development well.

Attractive valuation among peers
Although some of its peers are also doing well, we admire Sim Lian’s strong overall performance and its attractive valuation. Its margins are in line with its peers, averaging around 19.9% (gross) and 12.8% (net), but it has high ROE of 26.4% against the industry average of 14.5%.

Good progress; maintain BUY with TP at SGD1.06 Given its significant land bank of 2.4m sq ft GFA, we forecast Sim Lian will continue to achieve strong growth in the next three years. We maintain our BUY with revised target price to SGD1.06 from SGD1.00, and raise our profit estimates for FY08 and onward, reflecting higher margins, together with higher construction order book outlook. "

Kim Eng initiates BUY on singapore stock Foreland Fabritech :

"Foreland currently trades at 8x FY07 EPS, a discount to its peer average of
10x FY07 EPS. We see fair value at 62 cents, in line with our PER and DCF
valuations. Foreland’s single-digit valuation is very attractive considering its
above-30% growth momentum and industry-leading gross margins. The
group’s competitive edge in the functional fabrics and sizable advance
production facilities constitute a strong value proposition. Recent share
buyback by the chairman signals his confidence in the group’s prospects."

UOB-KayHian initiates BUY call on Singapore stock China Farm Equipment with S$0.81 target, based on 13X FY07 P/E.

UOB says the singapore listed China based company is seeing strong demand for farm equipment as Beijing wants to quickly raise agriculture sector''s mechanization rate to improve efficiency as more farmers move to cities to look for work amid rising urbanization. UOB adds China Farm has strong market position and offers solid foundation for further growth as its products are specially tailored according to the similar geographical features of the four provinces (Hunan, Hubei, Jiangxi, Anhui). Therefore, the markets in these areas are stable and almost no other company would compete with China Farm there.

DBS initiate BUY on singapore stock HupSteel Ltd

"Hupsteel is an established steel stockist, leveraging on its close ties with steel mills to secure supplies of a wide range of steel products for their customers in the oil and gas, marine, and construction sectors in an efficient manner.

Point: Robust growth in the demand for steel is expected to continue into the next couple of years with shipyards in the region continuing to experience strong order book growth. In addition, demand from the construction sector is expected to kick in with major construction projects such as the Integrated Resorts and Marina Bay Financial Centre coming on-stream.

Relevance: We have forecast an earnings growth of 18.3% and 17.9% in FY08 and FY09 respectively, to $36.9m and $43.5m. Given its exposure to the strong growth sectors and buoyant earnings outlook, we believe a 10x PE on
FY08 earnings is undemanding. This works out to a fair value of $0.73 for Hupsteel, which represents an upside of 38% to its last traded price. We therefore initiate coverage with a BUY."

OCBC initiate BUY call on Singapore stock Federal International Limited:

"We are initiating coverage on Federal International with a BUY rating and a fair value estimate of S$1.05. It recently delivered a strong set of 1H07 results with net profit up 45% YoY to S$7.8m. Following the recent succesful conversion of a FSO, Federal has announced a slew of other projects, broadening its earnings base from its core trading business and more importantly, developing a stream of sustainable recurring income. In June, it signed a 12-year Power & Steam Purchase agreement with Natural Fuel Ltd (NFL) for a cogen facility. This deal comes with several interesting features including a long term contract, sale of surplus energy to the grid with revenues shared on a pre-deterrmined basis, ability to generate carbon credits, and as a platform to potentially secure a second cogen plant. We are projecting net profits of S$17.0m for FY07 and S$20.0m for FY08. Our fair value estimate is based on 15x FY07 diluted earnings and offers a potential upside of 32% from current price level."

CIMB initiate Outperform call on Singapore stock China Sunsine Chemical Holdings with target price S$0.50

CIMB comments :
Initiating coverage - Leading rubber chemical specialist by Jessie LAI
Leading rubber chemicals producer in the world, by production
capacity. China Sunsine Chemical Holdings (Sunsine) principally
engages in the production of rubber chemicals, essential for rubber
production. Capacity of its key product, rubber accelerators, is
slated to expand 56% to 50,000 tonnes p.a. by end-09, elevating the
company to the largest rubber accelerator producer in the world.
World renowned customer base and strong relationships. Sunsine's
customer base includes all ten of the world's ten largest tyre
producers, and major tyre producers in China. This underscores the
quality of Sunsine's products and its credibility in consistent
delivery. Tyre producers accounted for 64%-69% of group's revenue for
FY06 and 1H07, respectively.
Deepening of customer relationships. Sunsine's targeted marketing
efforts at large tyre customers ensure recurring and increasingly
larger orders, and the opportunity to cross-sell different rubber
chemical products to the same customer.
Sales and profits set to grow by 28% and 24% CAGR for FY07-09,
respectively. Growth should be fuelled by the 56% expansion in rubber
accelerator capacity and contributions from new rubber chemical
products. Projected 3-year EPS CAGR for FY07-09 is lower at 13% due
to share capital dilution post-IPO.
Initiate coverage with Outperform and target price of S$0.50, based
on 12x CY08 earnings, in line with international peers, Lanxess and
Chemtura. Compared to SGX-listed peers (9x CY08 P/E), we believe
Sunsine should be valued at a premium given its more established
brand name in the specialty chemicals space, and its strong clientele
base. We see potential catalysts from evidence of Sunsine passing on
its increased costs to customers, and any M&A announcements.

DBS initiates BUY on signapore stock KSH Holdings :

Story: With over 20 years of experience, KSH is a well-established and reputable main contractor in Singapore and Malaysia, involved in projects across all property segments.

Point: With a huge orderbook of S$332m (2.5x FY07 revenue) as of May ’07 and with potential to win more contracts given the firm outlook for Singapore’s construction sector, the prospects for KSH are bright. We believe that the Group can grow its bottomline by over 30% this year (FYE Mar ’08), with strong momentum going into FY09 and beyond.


Relevance: We believe that valuations for KSH are undemanding at 10.3 FY 08 earnings, compared to peers such as Yongnam, which are trading at 24x current earnings. Furthermore, KSH has interests in properties that are worth at least 45cts per share. We have a target price of S$1.52 for KSH based on 9X FY09 PER. The price upside potential to our fair value estimate is 60%. We are initiating coverage on KSH with a BUY rating.