Buy, Sell, Hold....What analysts say

KING WAN CORP ---> OSK-DMG:

King Wan Corp: SGD0.32 BUY (TP: SGD0.43)

Good Things Are Worth The Wait

King Wan’s (KWAN) 1QFY14 was above expectations with revenue at SGD25.1m. Its net profit of SGD2.6m is equivalent to half of the core 1.5-cent dividend. We note that the company’s new development property, Skywoods, should be launched in 2QFY14. KWAN also issued an update on the status of the KTIS IPO, which should go live within six months. Maintain BUY with a TP of SGD0.43 based on a 7% yield.

ROWSLEY ---> OCBC

Last Thursday, Rowsley received the
approval in-principle from SGX for its
proposed acquisitions of RSP Group and the
Vantage Bay site in Iskandar, and a 2-for-1
bonus issue of warrants. Management
reports that it would dispatch a circular and
convene an EGM to seek shareholder
approval in due course.

We note that, on 2
Aug 2013, management announced that
“barring unforeseen circumstances, the deal
should complete in the second half of 2013
after regulatory and shareholders’ approval.”
In our research piece, we carry out an
analysis of Rowsley’s value under a
successful RTO scenario, and also under a
failed RTO scenario. If Rowsley’s proposed
deal fails, we value each existing Rowsley
share at approximately S$0.034 – its book
value per share as at end Jun 2013.

However, if the deal succeeds, we calculate
from our analysis a value of S$0.67 to
S$0.85 for each existing Rowsley share
(before the 2-for-1 warrant issue ex-date).
(Eli Lee)
.

SUPER GROUP ---> Maybank KE

Ø We maintain our positive view on Super. We see further reasons to be
optimistic because of the company’s 1) good traction in new markets
which may become new growth pillars and 2) increasing importance as an
ingredients supplier
Ø Despite gross margins rising to 39% this quarter, we believe the
full potential of margin enhancement from softer commodity prices is
still underestimated by the market.
Ø We raise our FY13-FY14F estimates by 11-13% mainly on higher margin
assumptions and tweak our DCF assumptions. This derives a TP of
SGD6.10.

ST ENGINEERING ---> DBS Vickers

ST Engineering • Stock offers upside from US recovery, backed by an attractive yield

• Visible growth drivers in place at Aerospace, Marine divisions; in Asia as well as in the US

• Strong balance sheet and net cash position drive M&A ambitions; beneficiary if interest rate rises

• Proxy to recovery in the US and appreciating US$. Maintain BUY,TP S$4.80

YANGZIJIANG SHIPBUILDING ---> OCBC

Aiming to be amongst the select few left standing.
With more than 1,500 yards in China, YZJ’s CEO expects that more than half of the country’s yards will have to be closed down, and of the remainder, only 20% are likely to
be profitable. In our view, what is imperative for YZJ is to continue its smooth execution, secure orders (albeit at almost breakeven levels), scale up the value chain by building green vessels and developing its offshore
capabilities, while waiting for the industry consolidation to run its course. Should it be one of the few large yards left standing when the dust has settled, YZJ would then find itself in a stronger position than before. Maintain HOLD with S$0.99 fair value estimate. (Low Pei Han)

SUNTEC REIT ---> OCBC

At current price, Suntec REIT trades at one of the lowest P/B in the S-REITs sector at 0.73x, while offering a compelling FY14F yield of 6.9%. We are revising our fair value from S$1.85 to S$1.80 due to higher risk-free rate. However, as valuations remain attractive and outlook is positive, we maintain BUY on Suntec REIT.