Excerpts from latest analysts reports....

OCBC says VIKING’S fair value is 32 cents

Analyst: Low Pei Han

Promoter Hydraulics, a subsidiary of Viking, is the largest supplier of hydraulic winches and power packs in South East Asia. Photo: Viking website

Viking Offshore & Marine (Viking) reported a 112% rise in revenue to S$79.7m and saw a 14-fold increase in net profit to S$12.6m in FY10.

Net profit was 0.2% shy of our full year estimate, and exceeded management’s guidance of S$10.5-12m.

We estimate core net profit was about S$4.9m vs. approximately S$1.1m loss in FY09.

With the recovery in rig orders, we understand that Viking has already secured work from recent rig contracts won by Keppel Corporation. The group also signed S$24.8m worth of contracts with overseas customers in 2010.

The swift pick-up in new rig orders has meant that a challenge for the group and its competitors may be an impending labour shortage rather than a lack of jobs.

Going forward, we will focus on Viking’s integration process, its ability to execute projects well and control costs. A first and final dividend of 0.3 S cents has been proposed, representing about 13% of FY10’s net profit.

Maintain BUY with SOTP-based fair value estimate of S$0.32.

Recent story: VIKING OFFSHORE & MARINE: Why it's 20% of my portfolio


CIMB ups BROADWAY’S target price to $1.84

Jonathan Ng

Broadway manufactures the actuator arms of Hard Disk Drives.
Core earnings slightly below; maintain OUTPERFORM. Stripping out forex gains of S$1.5m, core net earnings of S$8.7m were 4-5% below consensus and our forecasts as higher-than-expected sales were overshadowed by lower-than-expected GP margins.

Nevertheless, we raise our FY11-12 estimates by 1% after incorporating higher sales but lower margin and effective tax assumptions. We also introduce FY13 forecasts.

Following our upgrade, we have a slightly higher target price of S$1.84 (from S$1.82), still valuing Broadway at 8x CY12 P/E (within its 5-year trading band). We expect a 2H11 earnings recovery to provide stock catalysts.

Recent story: BROADWAY, INNOTEK: What analysts say now.....

DMG expects TDR listing to trigger stock price increase for SINO GRANDNESS

Analyst: Tan Han Meng, CFA, CPA

Sino Grandness' vegetable and fruit juices are selling very well in China.

Sino Grandness (SFGI) announced yesterday that it is planning to offer and list Taiwan Depository Receipts (TDRs) on the Taiwan Stock Exchange representing a number of ordinary shares of the company to be decided by its Board.

Our study on eight SGX-listed companies that are recently dual-listed in Taiwan suggests it takes an average 150 days from first announcement of TDR plan to eventual dual-listing, with share price in Singapore appreciating an average of 16% during the period.

In particular, consumer-related counters Oceanus (BUY) and Super (NEUTRAL) saw positive returns of 21% and 40% respectively.

We think SFGI’s dual-listing could possibly take place coming Jun-Jul (assuming necessary approvals are obtained) and believe its share price will react positively to the event in the near-term.

Maintain BUY at TP of S$0.68, pegged to 6x FY11F P/E. SFGI is due to report its 4Q10 results on 22 or 23 Feb.

Recent story: BRIGHT WORLD, SINO GRANDNESS, UMS: What analysts now say.....

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