UOB KayHian initiates Overseas Union Enterprise (LJ3.SG) at Buy with a $4.25 target price, pegged at parity to FY11F RNAV, offering about 25% upside from current levels.
The house forecasts minimum FY11-12 yield of 2.6% and 3.3% based on a 50% dividend payout, adding the stock is an “attractive developer play on office upcycle.”
DBS Vickers initiates Amtek Engineering (M1P.SG) with a Buy call, and a target of $1.65, which offers 27% upside plus 5.0%-6.0% dividend yield.
It says “Amtek is a pioneering metal stamper founded in Singapore in 1970. After a private equity buyout in 2007, management quickly re-organised the business to move it further up the value chain and to improve the cross selling of higher value added products and services to existing and new customers.”
CIMB starts STX OSV (MS7.SG) at Outperform with a $1.60 target, based on 11x CY12 P/E (a 10% discount to rigbuilders’ 5-year mean).
“STX OSV is a designer and shipbuilder of high-end, customized offshore support vessels. With nine shipyards in four countries, it has exposure to global E&P spending,” the house says.
DMG initiates STX OSV (MS7.SG) at Buy with a $1.56 target price.
It says the company is in a good position to capture the returning demand for high-end platform supply vessels and offshore subsea and construction vessels, given its leading edge technology and strong market share in the high-end segments.
OCBC initiates coverage on First REIT (AW9U.SG) with a Buy recommendation and $0.84 fair value estimate.
The research house says FREIT "is well-positioned to capitalise on the growing demand for higher quality healthcare from the middle-class in Indonesia as well as increasing eldercare needs in Singapore."
OCBC notes FREIT has completed acquisitions of two Indonesian hospitals recently "which we view as yield-accretive in nature."
Kim Eng initiates China Minzhong Food (K2N.SG) at Buy with a target price of $1.80, pegged at an undemanding 9xFY12F P/E.
It says, “with China emerging as an increasingly important vegetables supplier to the world, the group looks set to enjoy continued growth in its export sales for processed vegetables.” the house adds, domestically, Minzhong is also benefiting from the rise in demand for fresh quality vegetables on the back of increasing urbanisation, rising affluence and steady population growth.
AmFraser starts SunVic Chemical (A7S.SG) at Buy with a $1.02 fair value. It says there is diversified and growing demand for AA and AE for a wide range of common consumer goods.
“The wide demand base reduces the impact if a certain end-product enters a downtrend.” The house notes favourable cost of raw materials as the price of propylene has largely remained stable.
DBS Vickers initiates Xinren Aluminium (MN5.SG) at Buy with a $0.70 target.
Says the company is well positioned in the Chinese aluminum industry as an integrated manufacturer with 275,000 tons smelting capacity and 50,000 tons fabrication capacity.
BNP Paribas starts Sembcorp Industries (U96.SG) at Buy with a $5.90 sum-of-the-parts target price.
Expects the stock’s performance to be driven by its unit SembMarine (S51.SG), which historically has a 90% price correlation with oil prices.
Says orders for SembMarine are likely to increase to $3.3 billion next year from the $1.25 billion trough in 2009, driven by a rig replacement cycle and better returns from its high-specification rigs.
Samsung Securities starts Yanlord Land (Z25.SG) at Buy with a $1.95 target price, based on a 20% discount to a 2011 NAV estimate.
Says the China-based high-end developer continues to surprise the market with its ongoing success with quality project launches.
Credit Suisse starts Ascott Residence Trust (A68U.SG) at Neutral with a $1.30 target price. Says the hospitality REIT’s earnings have become more stable after its recent acquisition of 26 serviced apartments in Europe, with 47% of its EBITDA now derived from stable income vs 4% previously.
HSBC initiates CapitaMall Trust (C38U.SG) at Overweight with $2.22 target price; says the REIT’s stable income profile ensures steady payouts while its asset enhancement initiatives will result in continued rental uplift.
Says the “recent correction (is) an opportunity to go long on Singapore’s oldest REIT.”
DBS Vickers starts Consciencefood Holding (L1D.SG) at Buy with a $0.38 target based on 7x FY11 P/E.
Says the immediate growth driver for the Indonesia-based instant noodles maker is its expansion into cup noodle production in FY11.
Nomura starts Mewah International (MV4.SG) at Buy with a S$1.30 target price. Says the palm oil refiner’s large scale and risk management capability help it achieve stable margins.
Cites company’s strong distribution network in Africa’s downstream business as one of its key strengths, given that more than 40% of consumer pack earnings have come from the continent over the past 3 years.
Goldman Sachs starts Olam (O32.SG) at Neutral with a S$3.20 target price. Says the commodity trader’s ROE peaked at 30% in FY08 and has since de-rated to 17% in FY09-10.
Notes while the company is selectively investing in upstream and midstream businesses to boost margins and restore ROE, this may take time to mature, with upsteam earnings subject to agriculture commodity prices.
“Olam tends to sell on a forward basis for a long duration which we think may reduce the correlation with spot prices in the short term.”
Shares –0.6% at $3.19.
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Goldman Sachs starts Noble Group (N21.SG) at Buy with a $2.60 target price, implying 15.3x FY11 P/E.
Says commodity supply chain manager could benefit from a strong 2011 macro outlook as pro-cyclical commodities like coal and oil, plus metals are expected to account for 60% of next year’s earnings.
DMG starts Mun Siong Engineering (MF6.SG) at Buy with a $0.28 target price.
Says the provider of mechanical and electrical engineering services is well placed to ride the strong growth in petrochemical industry in Singapore, where oil giants Shell and Exxon Mobil have set up new petrochemical plants.
CIMB starts Foreland Fabrictech (B0I.SG) at Buy with $0.16 target; says “with margins picking up after the recent recession, capacity expansion and producing high-grade products efficiently would be its forward growth drivers,” for Fujian-based fabric maker.
Standard Chartered starts Pacific Andes Resources Development (P11.SG) at Outperform with $0.47 sum-of-parts target price.
Expects steady recurrent earnings from supply chain management business, with unit China Fishery’s (B0Z.SG) strong growth momentum, margins underpinning group prospects.
