Inphyy Corner

Golden Agri's CPO production predicted to revert back to 5-10% growth

Limited CPO price appreciation anticipated.

According to OCBC Investment Research, Golden Agri expects its CPO production in 2014 to revert back to the usual 5-10% growth.

Here's more:

As before, we believe that most of the positives have been captured in the recent run-up in CPO prices. In addition, we believe that further CPO price upside may still be capped by the expected jump in global oilseed production.

In its latest forecast, the USDA is projecting for production to hit a record 499.4m tons for 2013/2014, up 4.3m tons from Sep, with higher soybean, sunflower-seed and rapeseed accounting for most of the rise.

In any case, ourCPO price assumption for 2014 of US$830/ton (MYR2650/ton) has already taken into account these factors. It also offers an upside of nearly 12% from an average price of US$744/ton in 2013; but we are unlikely to see a return to the US$911/ton average seen in 2012.

Despite posting a disappointing set of 3Q13 results, Golden Agri-Resources’ (GAR) share price recently hit a high of S$0.61 on 18 Nov, buoyed by stabilizing CPO (crude palm oil) prices; this likely on increasing expectations of a lower CPO supply coming out from both Malaysia and Indonesia in 2013.

We believe that the recent announcement by the Indonesian government to double the mandatory bio-diesel blending to 10% from next year was also supportive of CPO prices.

However, as noted in our report dated 20 Nov, we believe that the run-up in share price looked overdone. And true enough, GAR’s share price has since corrected over 14% from that high.

Vard wins its first deal of the year estimated at NOK1.3-1.5b

Vessel delivery slated in mid-2016.

According to OCBC Investment Research, Vard Holdings Limited (VARD) announced its first contract win of the year last evening. This entails the design and construction of one Diving Support and Construction vessel (DSCV) for an international customer.

Here's more:

This vessel is of VARD 3 06 design and has a length of 157m, beam of 27m and an accommodation capacity for 150 persons. Delivery of this vessel is slated in mid-2016 from one of its Norway yards.

Although the value of the contract was not disclosed, we believe a ballpark range could be NOK1.3-1.5b, after drawing reference from a recent >NOK1b contract for a DSCV of smaller size secured on 30 Dec 2013 and a NOK1.4b Offshore Subsea Construction vessel contract secured in Jun 2012 with similar basic hull design and of a comparable size.

While we are positive on VARD’s bright start to the year, we maintain our HOLD rating and S$0.84 fair value estimate on the stock (pegged to 8x FY14F EPS), as we believe challenging conditions in Brazil will continue to pose downside risks to its margins and profitability.

Singapore Press Holdings: A soft landing for ad revenues

www.ocbcresearch.com/pdf_reports/company/SPH-140115-OIR.pdf

Golden Agri-Resources: Valuations look less pricey

www.ocbcresearch.com/pdf_reports/company...0Agri-140116-OIR.pdf

Hyflux: Proposed Issuance Of S$300 Million 5.75% Perpetual Capital Securities

16 Jan 2014 10:43

Hyflux Ltd has on 15 January 2014, entered into a subscription agreement with DBS Bank Ltd. as the sole lead manager and bookrunner in connection with the offer and proposed issuance of S$300,000,000 in aggregate principal amount of 5.75% perpetual capital securities. Pursuant to the Subscription Agreement, DBS has agreed and undertaken to subscribe and/or procure subscribers for all the Capital Securities at an issue price of 100% of their principal amount...

hyflux.listedcompany.com/newsroom/201401...257C6100483DFF.1.pdf

Delong: Joint Venture In Thailand To Manufacture & Sell Hot Strip Products

16 Jan 2014 17:35

Delong Holding Limited's wholly-owned subsidiary, Delong Steel Singapore Projects Pte Ltd, has incorporated a joint venture company in Thailand, known Delong (Thailand) Co., Ltd.. Delong Thailand was incorporated pursuant to a non-binding heads of agreement entered into by the Company, Permsin Steel Works Public Co., Ltd., Asia Metal Public Co., Ltd. and Thai Yuan Metal Public Co., Ltd., for the purposes of carrying out the manufacturing and sale of hot strip products. The HOA sets out the preliminary understanding and intention of the parties. The terms and conditions of the joint venture will be concluded in a definitive agreement to be signed between the parties to the HOA...

delong.listedcompany.com/newsroom/201401...257C6200333E00.1.pdf

Super Group - Turning the corner; up to BUY

research.maybank-ib.com/pdf/document/Sup...roup_170114_5640.pdf