CIMB has downgraded Tiong Woon Corp. (T06.SG) to “neutral” from “outperform”, citing the company’s struggle to land shipbuilding contracts, secure customers for its cranes.
It says the demand for cranes in key sectors like construction showing signs of weakening, while lack of sizeable projects in Singapore’s oil & gas sector has resulted in lower crane utilisation rates.
The outlook for Singapore’s water treatment plays looks positive given good prospects in overseas markets, says CIMB-GK Securities.
The brokerage says Chinese government is committed to upgrading technology used in water treatment and boosting water treatment capacity, which should keep contract awards flowing in.
MobileOne (B2F.SG) and StarHub (CC3.SG) are sticking to rational iPhone pricings but other risks remain, says CIMB.
Until today, iPhone plans have only been offered by SingTel (Z74.SG).
“The telcos are rational by not straying too far from the incumbent’s pricing, thereby averting an all-out subsidy war, which had been our earlier concern,” says CIMB and does not expect SingTel to react aggressively when it launches its new iPhone plan this weekend.
Neptune Orient Lines (N03.SG) gained 0.7% to $1.54, tracking modest gains by most other blue chips, although buying was not widespread and volume stayed light, suggesting investors may still be concerned about impact of weak freight rates on bottomline.
“We expect the average rate to remain low until at least May or June, pending the renegotiation of transpacific rates,” says CIMB, which has “trading sell” call with a price target of $1.60.
Singapore stock market’s post-recession rally still has 6–8 months to go, judging from historical performance, says CIMB.
And the investment bank has chosen property, commodities, conglomerates as favourite sectors heading into 2010. Top stock picks include Golden Agri-Resources (E5H.SG), Noble Group (N21.SG), Sembcorp Industries (U96.SG), UOB (U11.SG), CapitaMalls Asia (JS8.SG).
CIMB in a Nov 23 research report says: “SIE’s 2QFY10 results beat our expectations because of stronger-than-expected line maintenance, following record-high flights handled at Changi. We believe the strength will persist with airlines reinstating flights that were cut in the past year and adding capacity as demand turns around.
CIMB in a Nov 18 research report says: “CapLand announced the launch of its CMA IPO yesterday with an offer price of $2.12 per share or 1.55x P/BV. While this pricing would not be immediately RNAV-accretive, we argue that benefits from a “leaner†balance sheet outweigh valuations. Better access to debt and capital markets is another positive.
Shares of Hyflux, the largest water treatment company traded in Singapore, rose after posting higher earnings and CIMB Investment Bank Bhd. and Oversea- Chinese Banking Corp. raised their price estimates.
Rotary Engineering shares surged to the highest level in 18 months in Singapore trading after CIMB Investment Bank Bhd. raised its share-price and earnings estimates.
The stock climbed 18% to $1.02 today, the highest since Jan 17, 2008.
CIMB raised its share-price estimate for the stock to $1.39 from 90 cents and maintained its “outperform” rating, saying a project in Saudi Arabia will boost earnings through 2011.
The project was awarded on July 9.
The brokerage raised its profit estimates for the three years through 2011 by as much as 66% to factor in higher revenue and profit margins.
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DBS Group Holdings (DBS SP), Southeast Asia’s biggest bank, declined 0.9% to $13.60. The company was downgraded to “neutral” from “outperform” at CIMB Investment Bank Bhd., which said the stock’s recent had been excessive.
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