Asia Trader & Investor Convention 2009

Make your way to Suntec Singapore Hall 401 this Saturday and Sunday (18th and 19th April) or visit http://www.theatic.net/

The Material provided above is for information only and does not constitute an offer or solicitation to purchase or sell the shares mentioned

The week ahead: April 13

Apologies to all as I have been busy.

These are the counters to look out for this week:
1) ARA Asset Management Ltd
2)Golden Agri
3)Indo Agri
4)Noble
5)Olam
6)SPC
7)SPDR Gold Share
8)UE
9) Wilmar



The Material provided above is for information only and does not constitute an offer or solicitation to purchase or sell the shares mentioned

The Week Ahead: 06/04/2009

From this week going forward, Singapore Stock Picks will present an outlook of the Singapore stock market for the week ahead and highlight 1-2 counters likely to be in the limelight.

Outlook:

Encouraging news from US are increasing the buying volume in Asia and it seems likely that there will be some consolidations next week in the Singapore market. However, Singapore economic figures does not look encouraging in the first quarter and a further slide is expected for 2Q2009. Despite attractive valuation, my personal opinion is that it is still premature to buy in aggressively.

Counter in focus: Golden Agri

High buying volume on friday as well as low stochastic makes it a good stock to look at and buy for the short term.

The Material provided above is for information only and does not constitute an offer or solicitation to purchase or sell the shares mentioned

A sound long-term investment: MIDAS HOLDINGS

Source:DMG

Right place, right time. Midas Holdings, which has investments in aluminium alloy extrusion products and polyethylene pipes, is set to enjoy strong growth on the back of the railway sector. It will also get a boost from 32.5%-owned associate NPRT, being one of the four entities with a licence to assemble/produce Metro train cars in China.Order book flow should remain robust going forward. Midas’ current order book is worth S$120m, with deliveries stretching out over the next two years. NPRT has a much bigger order book, clocking up RMB4.5b worth of orders (784 train cars) for delivery between FY09 and FY11. With many more railway systems to be added in major cities and also connecting various cities, we are confident Midas and NPRT will be adding to their current tallies.Direct beneficiary of the China stimulus package. Approximately RMB2t is budgeted by the Ministry of Railways (MOR) for expansion of China’s existing railway system between FY09 and FY12, mostly for intercity train systems. As much as RMB600b will be spent in FY09 out of this RMB2t. The MOR has also announced it will spend at least RMB500b on rolling stock alone in the next four years. We have estimated that Midas will see a RMB2b surge in orders, based on its 80% market share in AA train car body extrusion.Stable earnings growth. From FY04 to FY08, Midas grew its top line 140% from S$60.2m to S$144.5m, a CAGR of 24.5%. Despite the current credit and economic crisis, we believe Midas will continue its path of strong and stable earnings growth with the construction of a third AA production line and higher contributions from NPRT going forward.Valuation. We derive a 12-month fair-value target price of S$0.73 using our DCF model, applying a WACC of 15.5%, a beta of 1.1 and a terminal growth rate of 1%. At the last traded price, the stock is trading at 10.1x FY09 and 7.5x FY10 P/E, offering a yield of 2.3% and 2.9% respectively. Its China-based peers trade at 21.8x FY09 and 16.5x FY10 P/E. Initiate with BUY.

source:DMG

The Material provided above is for information only and does not constitute an offer or solicitation to purchase or sell the shares mentioned

MobileOne: S$1.52 NEUTRAL (TP: S$1.52) - Prospects largely priced in

source:DMG

Below expectations. In the year to 31 Dec 08, M1 saw net profit fall 12.6% to S$150.1m on the back of a 0.3% dip in revenue to S$800.6m. The telco was hit with higher acquisition and retention costs as competition intensified in response to mobile number portability (MNP). FY07 also benefited from tax adjustments and excluding which, net profit fell a slimmer 4.5%. The results were below our expectations.

Pressures lifting. EBITDA marginimproved to 44.0% in 4Q08, up from 40.9% in 4Q07 and 41.6% in 3Q08, as competitive pressures tailed off. However, due to compressed margins over the first three quarters, EBITDA margin came in at 42.9% for FY08 - 1.2ppt lower YoY. Other signs that competition is easing –lower churn rate as well as falling acquisition and retention costs per customer.

Balance sheet strengthens. Gearing has been reduced from 130% in FY07 to 104% in FY08. It has a net debt/EBITDA of 0.7x, with a healthy EBITDA/Interestof 41.8x. This ensures that that pay outs will continue to be healthy. In FY08, it dished out dividends of 13.4 S¢ per share, equivalent to an 80% payout.

Little key updates. Management kept plans very close to their chests. Theyindicated that the market is going to be a lot more rational this year, a point which has already been factored by the market. What investors were more interested in was the hunt for the new CEO, but little was said about that.

Earnings and target price lowered. We have lowered our earnings estimates for FY09 by 5% to S$141.6m (-5.6% YoY). In FY10, we expect earnings to grow 4.6% to S$148.1m. Payout, assuming that it is maintained at 80%, works out to a prospective yield of 8.3%. Based on DDM, we attain a target price of S$1.52, down from S$1.58 previously. We believe that the prospects have already been priced in. Downgrade to NEUTRAL.

source:DMG

The Material provided above is for information only and does not constitute an offer or solicitation to purchase or sell the shares mentioned