Tuesday, November 19, 2013

Singapore Stock Tips: MIDAS (Target Price SGD0.75)

Midas Holdings: SGD0.50 BUY (TP: SGD0.75) A Strong 3Q13 Midas’ 3Q13 PATAMI was at CNY16.4m vs a CNY6.1m loss a year ago. This was boosted by its associate NPRT booking CNY10.9m in earnings (vs a CNY7.0m loss in 3Q12). Operating profit was lower y-o-y, dragged down by lower gross margins and higher operating costs. Nonetheless, the company remains in a good position to secure more orders over the next few quarters. Maintain BUY with a TP of SGD0.75. • Revenue grows but gross profit is lower. Midas’ 3Q13 revenue surged 48.5% y-o-y to CNY301.0m, as utilisation of its production lines continued to improve (3Q13: 55%, 2Q13: 50%). However, as it took on more low-margin jobs, the gross margin dipped to 20.8% (2Q13: 22.5%; 3Q12: 31.5%). Going forward, we expect profitability to improve as more high-speed train orders, which command higher margins, are secured. • Order flow is improving. The China Railway Corporation recently released a second tender for train cars. China CSR Corp (1766 HK, NR) and China CNR Co (601299 CH, NR) secured the bulk of the first tender’s orders a few months ago. The results of the second tender are expected to be announced in Dec 2013, with China CSR and China CNR being the likely winners again. As both companies are major customers of Midas, it is in a good position to secure more orders. This is expected to boost its current orderbook of CNY900m, with deliveries scheduled for 2014 and 2015. In the meantime, its associate Nanjing SR Puzhen Rail Transport (NPRT)’s orderbook is currently at CNY8.5bn. • Higher revenue estimates, but at lower gross margin assumptions. Midas’ FY13 PATAMI is expected to be boosted by NPRT’s strong performance this year. NPRT’s 3Q13 performance has already exceeded our FY13F numbers. We raise our revenue estimates after taking into account the expected continued improvement in Midas’ capacity utilisation. However, we lower our gross margin assumption for FY13 and factor in higher operating expenses, which results in our PATAMI estimate of CNY32.9m for the period (from CNY80m). FY14 is expected to be stronger, as gross margins improve along with higher revenue and strong contributions from NPRT. Maintain BUY

Thursday, November 14, 2013

Singapore Stock Picks: Nam Cheong - BUY with a target price of SGD0.41). Upside Potential of 41 %)

Nam Cheong: SGD0.29 BUY (TP: SGD0.41) Record Quarterly Profit And Strong Guidance NCL posted a 3Q13 PATMI record of MYR58.7m (+86% y-o-y) – driven by its historic MYR1.7bn orderbook on hand, with shipbuilding gross margins surprising on the upside at 22.8% (2Q13: 17.3%). Thus, we increase our top-of-street FY13F/14F/15F estimates by 4/7/5% and raise our TP to SGD0.41 (from SGD0.39). One of our Top Picks, NCL combines 39% growth, 25% ROE, low 0.12x net gearing and healthy cashflow on a undemanding 7x FY14F P/E. • Strongest-ever quarter with better things to come. NCL’s bottomline beat our MYR50m preview estimate by MYR8.7m, as its 23% shipbuilding margin was even higher than our top-of-street forecast. While we expect a normalisation to the 18-20% range, margins should continue to enjoy support from higher-margin platform supply vessels (PSVs) and work-boats or -barges, which form >50% of expected future vessel sales by value. Our S-curve revenue model indicates that strong topline growth in the coming quarters (on its record MYR1.7bn orderbook) will continue to drive earnings growth. • A “happy” CNY dividend. Management remained coy on dividend guidance. We did detect a strong optimistic tone, with chairman Datuk Tiong Su Kouk expecting a “happy” dividend upon FY13 results being announced and a final dividend declaration during the Chinese New Year in CY14. Supported by its low 0.12x net gearing and healthy operational cash flow, we raise our payout ratio assumption to 25% from 20%, which translates into an attractive 3.1-4.3% yield from FY13F-15F. • Targeting a market share increase. NCL now has a shallow-water offshore support vessel (OSV) global market share of about 12%, up 10% from a year ago. Over the next three years, management sees room to improve on this, which we interpret to mean that a healthy growth rate is sustainable over the next 3-5 years. • Raise estimates, TP increased to SGD0.41. We raise our top-of-street FY13F/14F/15F estimates by 4/7/5% on the stronger margin outlook. This increases our TP to SGD0.41 (from SGD0.39), based on 10x blended FY13F/14F EPS. NCL remains one of our Top Picks for its 39% growth, 25% ROE, healthy cash flow and low 0.12x net gearing, for which investors are only paying 7x FY14F P/E. Maintain BUY

Singapore Stock Picks: Ezion Holdings BUY (Target Price SGD2.65)

Ezion Holdings: SGD2.11 BUY (TP: SGD2.65) Strong Earnings From Bigger Fleet Of Service Rigs Ezion reported solid 3Q13 net profit of USD38.2m (+137% y-o-y) thanks to higher revenue from service rigs and logistics support operations in Australia. We maintain our FY13-15F EPS estimates pending an update with management. The strong set of results reaffirmed our BUY rating on the stock. Our SGD2.65 TP is based on 16x blended FY13/14F EPS. 3Q13 earnings above expectations. 3Q13 net profit surged by +137% y-o-y to USD38.2m, thanks to higher revenue (+97% y-o-y) from the deployment of more service rigs and contributions from offshore logistics support services in Australia. Excluding a USD18m gain from disposal, 9M13 core net profit of USD103m (+127% y-o-y) accounted for 78% of our FY13 forecast. We believe the stronger-than-expected earnings were boosted by solid operations in Australia and lower interest expenses arising from interest capitalised for assets under construction. Balance sheet gearing at 1.05x. Ezion ended 3Q13 with a gross debt of USD1bn and gross cash of USD209m. Cash generation was in line with our estimate - 9M13 net inflow from operating activities was at USD82.8m. We expect net gearing to stay at around 1.0x by end-FY13. Assuming no new capex, net gearing will fall to 0.86x in FY14F and 0.52x in FY15F. We believe the current gearing level is not aggressive, as the business is supported by long-term charter contracts. USD1.9bn charter backlog. Ezion has won nine new charter contracts worth USD584m in 2013 and we estimate a total charter backlog of around USD1.9bn. More service rigs are expected to start deployment in 4Q13 and we see an upside risk to our FY13 EPS estimates. Based on its existing pipeline, Ezion’s fleet will grow to 29 units by FY15. Maintain BUY with SGD2.65 TP. At our TP, the stock is valued at 11x FY14F P/E. We like Ezion for its strong earnings visibility and growth, and undemanding valuation of 9x FY14F P/E. We expect the robust demand for service rigs to translate into more new charters for the company.

Intraday Trading Results for Oct 2013 on Malaysia CPO

Dear readers, Below are the trading results for Malaysia CPO for the month of October 2013. For readers who would like to subscribe for the intraday trading signals, please drop me an email at dmgasia@gmail.com

Tuesday, November 5, 2013

Malaysia CPO Intraday Trading Results for Sept 2013

Dear Readers, Below are the snapshot of the Sept Intraday CPO trading results. This results are based on total mechanical system with emotionless trading strategy. We will buy(long) or sell(short) the underlying contract based on our proprietary trading signals provided by our systems. Should you be interested to subscribe to our systems, the monthly subscription is MYR250. For readers please drop me a message via my email at dmgasia@gmail.com Whatsapp users can message me thru my number at +60124808221 (Keith) Here are the results for Sept Trading on the 3rd month contract.

CPO Intraday TRADE SIGNALS SUBSCRIPTIONS

INTRADAY PROMO FOR 1 WEEK TRIAL

FKLI Intraday Signal Subscriptions

HIGH PROBABILITY STOCK SCREENER

Market In&Out Stock Screener

CPO Trade Signal Subscription