Singapore's STI +0.1%; 3,280-3,320 range tipped

Singapore's STI ekes out slight gains, but penny stocks are garnering the bulk of market action. The STI is up 0.1% at 3,310.42.

"We just had the Easter weekend so everyone is just waiting to see what happens," says Kelly Teoh, market strategist at IG Markets Singapore, noting US manufacturing data disappointed Monday while the key US non-farm payrolls data are due Friday. "Everyone is sitting on the sidelines."

Volume is 1.39 billion shares valued at only $309 million; in the broader market gainers top losers 1.2 to one. OCBC tips a 3,280-3,320 range.

Thai Beverage (Y92.SG) is up 2.5% at $0.625 in strong volume, the best-performing STI component.

GLP (MC0.SG) is down 1.1% at $2.62, possibly tracking declines in the Nikkei due to its Japan exposure. STX OSV (MS7.SG) is up 2.0% at $1.255 after Maybank-Kim Eng initiated the stock at Buy with $1.66 target price.
 

Jan 14: Property stocks, Ezra, Hyflux

Here are some stocks and factors to watch this Monday morning:

Property stocks may come under pressure after the Singapore government increased a tax on foreign buyers as part of new measures to cool its housing market, which has seen continued strong demand in the face of a weak economy and previous efforts to curb prices.

Singapore offshore services firm Ezra said on Monday its first-quarter net profit fell 49% to US$6.8 million ($8.3 million) from a year earlier, dragged down by higher expenses and lower contributions from associated companies.

Singapore water services company Hyflux said its consortium had sealed a water purchase agreement to deliver desalinated water to Dahej Special Economic Zone in Gujarat, India. Hyflux expects to take on around US$420 million of the project value, the company said.

Qian Hu Corporation sank into the red in the fiscal fourth quarter and financial year that ended on Dec 31. The integrated ornamental fish service provider on Friday posted a loss of $49,000 in the last quarter of the year, on turnover of $19.83 million.

Nam Cheong on Friday proposed to raise capital for its shipbuilding and vessel chartering business through the placement of about 190 million shares at $0.255 per share.

STX OSV Holdings on Friday announced that Tidewater Inc has entered into an assignment agreement with STX Pan Ocean Co Ltd to take over three Platform Supply Vessels (PSVs) originally under construction at STX OSV in Norway.

Tiger Singapore recorded a 22% increase in traffic to 800 million revenue passenger-kilometres for the month of December 2012. This comes on the back of a 15% increase in capacity to 904 million available seat-kilometres.

 

STX OSV stake sale removes overhang: OSK-DMG

Fincantieri’s price for a 50.75% stake of STX OSV (MS7.SG) is “somewhat low” considering the Singapore-listed company’s relatively strong balance sheet, valuing the stock at 7X FY13 P/E, OSK-DMG says.

“This depressed sale price could be primarily driven by the desperation of the STX Group to sell its assets to pare down debts.”

While Fincantieri has lined up finances to acquire the rest of STX OSV, OSK-DMG doesn’t expect the general offer to succeed, noting the $1.22/share price is below the current share price, with the offer likely merely aimed at satisfying Singapore takeover rules; “we view the offer as unattractive to minority holders.”

It adds, Fincantieri might not get the 90% acceptance level needed to take the company private, noting Och-Ziff holds 12%. But it adds, “the change in major shareholder could remove the overhang on the stock and lead to rerating.”

It keeps a Buy call with $2.05 target. It notes STX Group is also looking to sell its STX Pan Ocean (GZ9.SG) holding. The stock is down 6.1% at $1.315. STX Pan Ocean is down 6.2% at $4.37.

Fincantieri makes low-ball bid for STX OSV: CIMB

Fincantieri’s $1.22/share price for a 50.75% STX OSV (MS7.SG) stake is a low-ball offer, says CIMB.

“We were surprised at the low sale price, which values STX OSV at 6.5x 2013 P/E and 2.2x 2012 P/BV. Though we understand Korean parent company STX Corp.’s urgency to restructure its balance sheet, the sale price undervalues STX OSV.”

While Fincantieri doesn’t intend to maintain STX OSV’s listing status, CIMB expects the stock to remain listed, given the low price; it notes Och-Ziff’s average cost for its 12% stake was around $1.33/share.

“Though STX OSV could succumb to some near-term selling pressure, we believe its fundamentals could eventually provide support at $1.30-$1.40.”

It keeps a Neutral call with $1.47 target, implying 7.8x 2013 P/E and 2.7x 2013 P/BV. The stock is down 6.4% at $1.31.

DBS raises target on STX OSV to $2.10

DBS Vickers increased its target on offshore vessel builder STX OSV Holdings to $2.10 from $2.00 and maintained its ‘buy’ rating, after raising its 2012 fiscal year order win forecast by 10% to 11 billion Norwegian krones ($2.3 billion).

STX OSV shares were up 0.6% at $1.595 on Wednesday. The stock has increased 37.5% so far this year versus the 29% gain in the FT ST Midcap Index.

“We like STX OSV for its undemanding valuation, its market leading position as a builder/designer of large complex and highly customised OSVs (offshore support vessels), and its strong execution track record,” DBS said.

STX OSV is well positioned to capitalise on the tight capacity in Brazil, supporting growth in its order intake for 2013 and 2014 fiscal years, DBS said, adding that it believes the downside is limited on the possible stake sale by STX OSV’s parent company.

South Korea’s STX Corp chose Italian ship builder Fincantieri SpA as the preferred bidder for its controlling stake in STX OSV, a spokesman for STX said in August. 

Oct 11: F&N, OUE, SingTel, Tiger Air, ST Engineering, STX OSV

Singapore stocks may fall after Japanese machinery orders fell and Standard & Poor’s downgraded Spain’s debt rating.

The blue-chip Straits Times Index ended 1.05% or 32.10 points lower at 3,033.81 on Wednesday. In the broader market, losers outnumbered gainers 275 to 126. Overall volume traded was 1.64 billion shares. Here are some stocks and factors to watch:

The Fraser and Neave board said a Thai takeover offer for the Singapore drinks and property group is "not compelling but fair". However, in a circular issued by F&N on Wednesday evening, directors who are shareholders said they did not intend to accept the offer -- putting pressure on the bidders to raise the price.

Property developer Overseas Union Enterprise confirmed reports that it had made a $1.4 billion bid for the hospitality and serviced residence business of Fraser and Neave. It said the offer was in line with its long-term goal of growing its business and hospitality was one of its core areas.

Dynasty Real Estate Investment Trust, which is managed by a unit of property fund manager ARA Asset Management and owns Chinese assets, is offering 893.9 million and 901.3 million units to investors at 4.40 to 4.70 yuan ($0.86–0.92) a unit, according to a prospectus filed on Wednesday for what will be Singapore's first yuan-denominated initial public offering.

Singapore Telecommunications (SingTel) announced that it has secured the broadcast rights to all 380 Barclays Premier League (BPL) matches for the next three seasons commencing August 2013. These rights were acquired on a non-exclusive basis.

Tiger Airways saw its passenger load factor in September 2012 rise 2 percentage points to 80% from a year earlier. The budget carrier booked 552,000 passengers in the month, up 40% from 395,000 a year ago, while traffic - measured in revenue passenger-kilometres - improved 36% to 850 year-on-year.

ST Engineering said its aerospace arm ST Aerospace secured new contracts worth about $590 million in the third quarter of this year.

STX OSV Holdings on Wednesday said it has secured contracts for two Offshore Subsea Construction Vessels (OSCVs) from Oslo-listed Siem Offshore Inc.

Nam Cheong said its wholly-owned subsidiary, Nam Cheong International Ltd, has secured sale contracts worth US$52.1 million (S64 million) for two platform-supply vessels.

Tiong Seng Holdings said its wholly-owned subsidiary, Tiong Seng Contractors, has been awarded a $93 million contract to build 97 terrace houses in Serangoon Gardens.

Lonza said it has been awarded a five-year agreement worth US$9.5 million ($6.15 million) by the National Institutes of Health Center for Regenerative Medicine based in Bethesda, Maryland.

Lian Beng Group said its net profit for the fiscal first quarter ended Aug 31 decreased 44.9% year-on-year to $10.51 million, down from $19.08 million.

Grand Banks Yachts will keep all four directors on its board, with resolutions to remove them having been defeated at an extraordinary general meeting (EGM) on Wednesday.

STX OSV wins 2 more shipbuilding contracts from Siem Offshore

STX OSV Holdings, the designer and shipbuilder of offshore and specialised vessels, said Siem Offshore has exercised its option with the company to design and build of two additional Offshore Subsea Construction Vessels (OSCV).

The vessels will be equipped with a 250t AHC crane and with Launch and Recovery Systems (LARS) for Remotely Operated Underwater Vehicles (ROV). Deliveries are scheduled from STX OSV Brattvaag in Norway in 2Q 2014. The hulls of the vessels will be delivered from STX OSV Tulcea in Romania.

STX OSV already has two OSCVs under construction for the same customer in Norway, and two Platform Supply Vessels (PSV) in Brazil.

Siem Offshore Inc. is an owner and operator of modern support vessels for the global oil and gas service industry. Siem Offshore Inc. currently has a fleet of 37 vessels in operation and 8 vessels under construction. The fleet includes large AHTS vessels, OSCVs, PSVs, and other support vessels. Siem Offshore is listed on the Oslo Stock Exchange.


 

Possible Petrobras change bodes well for STX OSV: CIMB

A report that Petrobras has reversed its requirement for seven PLSVs to be built in Brazil to possibly just one bodes well for STX OSV, CIMB says.

“The news bodes well for STX OSV, allowing its European and Vietnam operations to participate in the Brazilian buzz (less the overheated environment). Already, its current Brazil yard is booked until end-2013 and faces space constraints for building multiple units in larger categories.

CIMB estimates the newbuild values at US$200 million-US$350 million ($249 million-$436 million) for each vessel; it expects the results of the PLSV bids by end-year. The house notes Petrobras has shown greater urgency to meet its production target, as it has also accelerated its FPSO-integration awards.

CIMB keeps its FY12 order expectations for STX OSV at NOK10 billion, with 77% secured. It keeps an Outperform call with $2.09 target. The stock is up 1.9% at $1.61, extending Monday’s 3.9% rise in strong volume.

Macq starts STX OSV at Outperform, 'In sweet spot'

Macquarie starts STX OSV at Outperform with $2.16 target. The house expects the OSV market to remain skewed toward the high-spec segment, with STX OSV the global market leader.

“With 10 yards in four countries which are the hotbed of OSV activity and long-lasting relationships with all top Norwegian contractors, STX OSV is in a sweet spot.”

It says ultra-deepwater oil exploration has led to an increase in complexity and vessel intensity, and Macquarie expects the OSV building cycle has legs despite short-term oversupply concerns. It estimates 2012-13 order flows will improve to NOK12.5 billion ($2.7 billion) and NOK14 billion respectively from 2011's NOK11 billion,noting sustainable margins have improved to 12%-14% from 2009's 5%.

“STX OSV has the strongest balance sheet amongst its peers, highest FCF generation and highest ROEs. This allows the company to distribute handsome dividends to its shareholders. However, we think investors are ignoring the above and unjustifiably comparing STX OSV with the low-end OSV players listed on the Singapore exchange.”

It tips a strong case for a valuation re-rating. The stock is +4.3% at $1.58.

STX OSV shares up 3% on order wins

Shares of Singapore-listed shipbuilder STX OSV Holdings rose as much as 3% after it won two contracts worth 700 million Norwegian crowns ($149 million) to build two platform supply vessels.

Shares of STX were up about 2% at $1.55 at 11:01 a.m. and have risen 34% so far this year.

“We believe that order momentum in the North Sea underscores robust sector dynamics, despite ongoing Euro concerns,” CIMB Research said.

The contracts bring the shipbuilder’s order wins so far this year to 6.7 billion Norwegian crowns, two-thirds of the broker’s total order target for fiscal 2012.

CIMB Research kept its target price of $2.09 on STX OSV and maintained its ‘outperform’ rating, saying it liked the company for its high-end capabilities, market leadership and entrenchment in Brazil.

Nomura starts STX OSV as reduce

Nomura initiates coverage of Singapore-listed offshore vessel builder STX OSV Holdings with a reduce rating and a target price of $1.68.

STX OSV’s shares have risen 53% so far this year to close at $1.78 on Monday.

“Although the outlook for the company and the offshore support industry remains relatively positive, order book replenishment remains a concern,” Nomura said in a report.

The broker said new contracts secured so far this year only accounts for 10% of Nomura’s order win assumptions.

It said STX OSV’s valuations also look lofty, as it is trading at 8.7 times its 2012 forward price-to-earnings ratio, the high end of its historical PE band of 4-9 times.

Out of 12 brokers tracking the stock, 11 have a buy or strong buy and one has a hold rating.

 

STX OSV Holdings rated 'buy' by DMG

DMG & Partners Research in a Mar 20 research report says: "STX OSV secured their first major order of the year with a contract from Island Offshore to build an advanced subsea support vessel valued at more than NOK500 million (US$87 million). Island Offshore is a repeat customer for STX OSV.

"We estimate that the new win lifted backlog order book to around NOK17.2 billion vs. its annual revenue capacity of NOK12 billion. We maintain our FY2012-2013F EPS estimates as we have factored in NOK12 billion new order win in FY2012.

"STX OSV is now trading at 10.5x FY12 P/E, 30% discount to average P/E of Singapore rig builders. We expect the tight supply and higher day rates for high-end offshore support vessels (OSV) to drive further new orders. Target price of $2.00. MAINTAIN BUY.

March 20: Global Logistic, STX OSV, Mencast

Singapore shares may open higher on Tuesday after Wall Street rose overnight as US housing data and sentiment for March remained at its highest level since June 2007.

Singapore’s benchmark Straits Times Index fell 0.68% on Monday to 2,990.09 points. Here are some stocks and factors to watch, according to Reuters:

Global Logistic Properties may be in focus as it announced a 50:50 joint venture with Japanese real estate company, Mitsui Fudosan Co., to develop a multi-tenant logistics facility with a gross floor area of 121,000 square meters in Ichikawa City, Chiba prefecture (Greater Tokyo), Japan.

Shipbuilder STX OSV said it secured two separate contracts worth an approximate total of 1.15 billion Norwegian Crown ($252.7 million) for the construction of an advanced subsea support vessel and an offshore subsea construction vessel. Delivery of the former vessel is scheduled for the first quarter of 2014 and the second quarter of 2013 for the latter.

Singapore sterngear equipment manufacturer and supplier Mencast will issue a total of 22.5 million new shares to four subscribers at $0.53 -- a discount of about 5.4% to the weighted average trading price of shares traded on March 14. The issue represents 11.8% of the total existing share capital of the company. Mencast shares resume trading on Tuesday after having halted its trading on Thursday.

DMG upgrades STX OSV to buy

DMG & Partners upgraded Singapore-listed offshore vessel builder STX OSV Holdings to buy from neutral and raised its target price to $2.00 from $1.20.

STX OSV have surged 33.0% so far this year and ended at $1.54 on Tuesday.

STX OSV reported quarterly earnings that beat expectations, DMG said. The firm said its fourth quarter net profit more than doubled to 638 million Norwegian krones ($141.7 million) on higher orders and strong margins. 

 

“Management remained cautious in their new order outlook but we are seeing signs that financing conditions are easing and orders for newbuilds could make a swift return,” DMG said in a report.

 

STX OSV rises after Q4 profit doubles

Shares of Singapore-listed offshore vessel builder STX OSV Holdings jumped as much as 6.5% to a record after the company’s fourth quarter net profit doubled, reported Reuters.

By 9:13 a.m. on Wednesday, STX OSV shares were 5.8% higher at $1.63 with more than 17.0 million shares traded in just 13 minutes, 1.3 times its average full-day volume traded over the last five sessions.

On Tuesday, STX OSV said its fourth quarter net profit more than doubled to 638 million Norwegian krones ($141.7 million) on higher orders and strong margins.

 

Brokerage DMG & Partners upgraded the stock to buy from neutral and raised its target price to $2.00 from $1.20.

 

 

STX OSV jumps ahead of results

Shares of Singapore-listed STX OSV Holdings surged as much as 9.6% on expectations the offshore vessel builder’s quarterly results would top market estimates, reported Reuters.

STX OSV reports results after the close of trading hours on Tuesday. By 4:33 p.m., STX OSV shares were up 8.9% at $1.585 in a broader market up 0.2%.

 

Nearly 31 million shares were traded, 3.9 times the average full-day volume traded over the past 30 days. STX was among the top 20 actively traded stock by volume in the local market.

 

STX OSV Holdings rated 'buy' by OCBC

OCBC Investment Research in a Feb 6 research report says: "Unlike Asian shipyards, which mainly construct vessels of higher standardization and less sophistication, STX OSV focuses on building technologically advanced and highly customized offshore vessels.

"In other words, STX OSV competes on design quality and manufacturing flexibility, while Asian shipyards compete primarily on costs and production volume. Given the general oversupply of OSVs in the market and an uncertain global outlook, we think that STX OSV is well-positioned both for growth and to weather any storm.

"The shares of major global offshore yards and local midcap offshore players are trading at 10x and 9.4x FY12F EPS respectively. We value STX OSV at 9.7x FY12F EPS. Fair value estimate of $1.65. BUY (initiating coverage)."

STX OSV Holdings rated 'buy' by DBS

DBS Vickers Securities in a Nov 21 research report says: "STX OSV announced that the contract for 8 LPG carriers for Petrobras Transportes S.A. (Transpetro) has been made effective. This contract will boost the group's FY2011 YTD order wins to NOK8.6 billion, forming 91% of our full year order wins assumption of NOK9.5 billion.

"We estimate STX OSV's orderbook now stands at NOK17.1 billion, vs. NOK13.6 billion as of end 3Q11, after including the Transpetro contract and the other 2 contracts secured in 4Q11 to date. Book-to-bill has been lifted to c. 1.5x from 1.2x previously. No change to our numbers, as this contract was already in our forecasts.

"However, this removes an ongoing concern among investors over the repeated delays in the contract being made effective. Target price unchanged at $1.54. MAINTAIN BUY."

STX OSV Holdings rated 'outperform' by CIMB

CIMB in a Nov 2 research report says: "Fears over the impact of tighter credit on STX OSV's order intake are valid, although we believe STX OSV's current order book is intact and cancellations risks are low.

"STX OSV is not directly dependent on funding from export. Rather, a handful of its clients rely on export to finance their vessel purchases. We believe STX OSV's order book of NOK14.2 billion is intact. We are comforted by STX OSV's track record of no order cancellations in the past 10 years.

"Target price of $1.39, based on 9x CY13 P/E. MAINTAIN OUTPERFORM."

Oct 31: SembMarine, Great Eastern, F&N, SIA Engineering, Singpost

Singapore shares may open lower on Monday, following a weak start in Tokyo and Seoul trading. Singapore’s benchmark Straits Times Index rose 2.04% on Friday to 2,905.72 points.

Sembcorp Marine has won two engineering contracts worth US$300 million ($373 million) from Exxon Mobil Corp (XOM.N) to build floating storage and offloading facilities at the Banyu Urip oilfield in Indonesia.

Palm oil firm Wilmar’s Australian sugar unit Sucrogen failed to secure enough support from Proserpine Co-operative Sugar Milling Association members for its planned purchase of Proserpine Sugar Mill, Wilmar said on Friday.

Great Eastern Holdings, the insurance arm of Singapore’s Oversea-Chinese Banking Corp, posted a 76% drop in third quarter net profit, hurt by marked-to-market losses on its investments.

Fraser and Neave said on Friday it had agreed to sell its entire 29.5% stake in China Dairy Group to Oasis Ventures, an affiliate of Shaanxi Coal and Chemical Industry Group, for around $37.9 million.

CapitaLand and its partner Hersing Corp. agreed to buy an industrial property in Singapore for $16.5 million from AIMS AMP Capital Industrial REIT.

SIA Engineering has reported a 2Q net income rose 7.1% to $71.2 million.

Singapore Post has reported a 2Q net income $30.6 million vs $39.7 million.

Singapore Telecommunications completed the sale of its internet broadband infrastructure assets to NetLink Trust for $1.89 billion.

Singapore public transport operator SMRT posted last Friday a 26% drop in second-quarter net profit due to higher energy and staff costs, and said full-year earnings may fall.

STX OSV Holdings, the offshore vessel builder, said on Sunday it had won contracts worth a total of more than 1 billion Norwegian Krones ($229 million) to construct four platform supply vessels for Island Offshore.