Author: tfwee
STEng – BT
ST Engg wins $30m contract
SINGAPORE Technologies Engineering’s marine unit, ST Marine, sealed a $30 million design, construction and outfitting contract to build a 68-metre seismic survey vessel for Swire Pacific subsidiary Swire Pacific Offshore Operations (SPO).
SPO is one of the world’s most established offshore support providers with over 20 new vessels on order for delivery till 2011. It has done extensive planning for this newbuild vessel and will be providing the vessel’s basic design and major equipment, including the seismic survey equipment. The vessel will be in compliance the American Bureau of Shipping classifications, and will also have Ice Class Notation C.
ST Marine has also been slowly building up its expertise and reputation in the speciality vessel market. Just last month, it secured a contract to convert a platform supply vessel to a geotechnical survey vessel and in July, it got another job to build and outfit a diving support vessel.
Construction for the latest contract is expected to start in May and delivery is scheduled for the second half of 2010. The deal is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of the group for the current financial year.
‘As one of the global leaders in the offshore marine industry, we remain committed to continuously improving the standards in technical excellence and client-oriented services. Marine services in the seismic survey industry, like exploration and development support, is an exciting field in which we have now established a firm footing. Given ST Marine’s sterling reputation, I believe that we have found a reliable partner that is more than able to deliver a top quality product,’ said SPO deputy managing director Brian Townsley.
‘We are very honoured to partner Swire Pacific Offshore to augment its modern offshore fleet. This contract is a significant milestone in ST Marine’s relationship with SPO and we hope to partner SPO further in its dynamic growth. Through this contract, we shall be building our first seismic survey vessel in Singapore, leveraging our experience of having repaired and converted almost 100 seismic survey vessels,’ said ST Marine president Chang Cheow Teck.
ST Engineering shares closed seven cents lower at $2.29 yesterday.
SFI – BT
Temasek in talks to sell $321m SFI stake
Move aimed to unlock shareholder value and optimise returns, says Singapore investment company
TEMASEK Holdings’ wholly owned subsidiary, Ambrosia Investments, is in talks to sell its majority stake in Singapore Food Industries (SFI).
Singapore investment company Temasek owns 69.87 per cent of SFI, according to Bloomberg data.
Temasek’s total stake is valued at about $321 million, based on SFI’s current market value of about $460 million.
Ambrosia had told SFI in late October that it was evaluating its option with its SFI stake.
SFI said in an update yesterday: ‘The board has been informed by the company’s majority shareholder Ambrosia Investments that discussions are presently ongoing between the majority shareholder and a potential acquirer with respect to the majority shareholder’s stake in the company.’
The board cannot assure that any transaction would materialise, SFI said. No other details were provided.
Temasek’s managing director of investments, David Heng, said Temasek reviews its portfolio regularly as an ‘active investor’ and is exploring its options on SFI with the aim of ‘unlocking shareholder value and optimising returns’.
The SFI announcement comes after Temasek halted the sale of PowerSeraya last week, citing market conditions. In an earlier report, BT quoted sources as saying that lower-than-expected bids could be one reason prompting Temasek to call off the genco sale.
SFI is an integrated food group. Besides Singapore, it has established a presence in the UK, and also has operations in Ireland, China and Australia.
The group reported a 4.9 per cent year-on-year rise in net profit to $5.78 million for the three months ended September 2008. This was despite a 2.4 per cent slip in sales to $158 million.
SFI has $17.4 million in cash and cash equivalents as at Sept 30, down from $21 million a year ago.
Shares of SFI fell as much as 5 per cent yesterday and ended down 1.7 per cent at 89 cents. The stock has risen 9.2 per cent since Oct 23, when SFI said Ambrosia was evaluating its SFI stake. It hit a year-high of 97.5 cents on Nov 7.
SingTel – DBS
Regional associates – victims of high competition and low usage
Story: We are concerned that regional subscriber growth may not translate into earnings growth. ARPU and EBITDA margins of regional associates are under pressure, due to (i) intense competition in Indonesia, Pakistan and Bangladesh (ii) softening minutes of usage in Philippines on the back of weak economic outlook. While usage may recover with better economic outlook, high competition may continue to dent the group earnings.
Point: We want to highlight three key points.
Telkomsel earnings may continue to decline. While Telkomsel may show some improvement from 2QFY09 results, as minutes of usage (MoU) increase in response to sharp price cuts, its SGD earnings contribution is likely to decline 23% (Prev 14% decline) in FY09 and 10% (Prev 8% decline) in FY10. A part of it can be attributed to an 18% weakness in Indonesian currency (IDR). Our assumption of SGD/IDR of 7300 compared to current exchange rate of 8000 implies downside risk to our estimates. Revision in Warid, Bharti and Globe earnings. We project Warid to post losses of S$90m (Prev S$23m loss) in FY09 due to higher network rollout and borrowing costs. We project Bharti’s pretax SGD contribution to increase 1% (Prev 9%) in FY09 as a result of higher USD borrowing costs and 18% (Prev 17%) in FY10, reflecting the low base. Globe contribution could decline 10% (Prev 5% decline) in FY09 due to lower usage and grow 5% (Prev 0%) in FY10 as economy stages a recovery.
Open-ended guidance for associates. Following the 2QFY09 results, management lowered its guidance for regional associate’s pre-tax earnings contribution from “low-double digit growth” to “lower than last year”. However, the guidance did not specify whether single digit or double-digit decline. We estimate associate contribution in FY09 and FY10 could decline 15% (Prev 4%decline) and grow 6% (Prev 4%) respectively.
Relevance: We lowered our FY09 and FY10 earnings estimates by 5.1% and 5.5% respectively, which are 5% and 7% below revised street estimates respectively. Maintain FULLY VALUED, with SOTP-based target price of S$2.34. We advise investors to accumulate SingTel towards our trough valuation of S$2.02.
November 2008
Results Announcement
- 4 Nov 08 : SFI (Q308) – EPS 1.1ct (todate 4.7ct)
- 4 Nov 08 : STEng (Q308) – EPS 4.31ct (todate 12.42ct)
- 5 Nov 08 : StarHub (Q308) – EPS 4.65ct (todate 13.15ct) ; Div 4.5ct (todate 13.5ct)
- 12 Nov 08 (AM) : MIIF (Q308) – EPS -7.05ct (todate -9ct)
- 12 Nov 08 (AM) : Singtel (Q209) – EPS 5.45ct (todate 10.97ct) ; Div 5.6ct
- 12 Nov 08 : SBSTransit (Q308) – EPS 2.7ct (todate 9.76ct)
- 13 Nov 08 : ComfortDelgro (Q308) – EPS 2.32ct (todate 7.45ct)
- 20 Nov 08 (AM) : SPAus (1H09) – EPS A5.85ct ; Div A5.927ct
|
Stock |
Period |
DPS ct |
Price |
Yield |
PE |
Div Breakdown |
|---|---|---|---|---|---|---|
|
SPH |
FY087 : Aug |
27.0 |
S$3.55 |
7.606% |
13.15 |
Interim 8ct ; Final 9ct + 10ct (Special) |
|
SingPost |
FY08 : Mar |
6.25 |
S$0.76 |
8.224% |
9.79 |
Q1 1.25ct ; Q2 1.25ct ; Q3 1.25ct ; Q4 2.5ct |
|
Sing Food |
FY07 : Dec |
5.0 |
S$0.905 |
5.525% |
14.84 |
Interim 1.8ct ; Final 3.2ct |
|
STEng |
FY07 : Dec |
16.88 |
S$2.36 |
7.153% |
13.92 |
Final 4ct + 10.88ct (Special) ; Interim 2ct |
|
Stock |
Period |
DPS ct |
Price |
Yield |
PE |
Div Breakdown |
|---|---|---|---|---|---|---|
|
SBSTransit |
FY07 : Dec |
17.25 |
S$1.69 |
10.207% |
10.32 |
Interim 6ct ; Special 8ct ; Final 3.25ct |
|
ComfortDelgro |
FY07 : Dec |
10.15 |
S$1.36 |
7.463% |
12.67 |
Interim 3.125ct + Special 3.375 ; Final 3ct + Special 1.5ct |
|
SMRT |
FY08 : Mar |
7.75 |
S$1.63 |
4.755% |
16.46 |
Interim 1.75ct ; Final 6.0ct |
|
Stock |
Period |
DPS ct |
Price |
Yield |
PE |
Div Breakdown |
|---|---|---|---|---|---|---|
|
SingTel |
FY08 : Mar |
12.5 |
S$2.55 |
4.902% |
10.24 |
Interim 5.6ct ; Final 6.9ct |
|
M1 |
FY07 : Dec |
15.4 |
S$1.26 |
12.222% |
6.81 |
Interim 2.5ct + 4.6ct (Capital Reduction) ; Final 8.3ct |
|
StarHub |
FY07 : Dec |
16.0 |
S$2.08 |
7.692% |
11.11 |
Q1 3.5ct ; Q2 4.0ct ; Q3 4.0ct ; Q4 4.5ct |
|
Stock |
Period |
DPS ct |
Price |
Yield |
NAV |
Div Breakdown |
|---|---|---|---|---|---|---|
|
SPAus |
1H : Sep-08 |
A5.7431 |
S$1.02 |
11.178% |
A$1.00 (NTA) |
1H A5.7431ct |
|
MIIF |
1H : Jun-08 |
4.25 |
S$0.285 |
29.825% |
$1.14 |
1H 4.25ct |
|
MacCookPSF |
FY09 : Jun |
A1.75 (Gross) |
S$0.175 |
39.484% |
A$0.762 (NTA) |
Q408 A2.31ct @ 1.3092 ; Q308 A2.31 @ 1.2525 ; Q208 A2.31ct @ 1.2485 ; Q108 A2.31ct @ 1.3144 |
* SPAus and MacCookPSF DPU in A$. Yield is Calculated Using Latest Exchange Rate (0.9926) fm Yahoo
NOTES :
- Mkt Price is as on 28-Nov-08
- SPAus : 1H09 (Sep08) – A5.927ct (before tax) / A5.7431ct (after tax)
- SingTel : Q209 (Sep08) – Interim 5.6ct
- StarHub : Q308 (Sep) – 4.5ct ; Q208 (Jun) – 4.5ct ; Q108 (Mar) – 4.5ct
- SMRT : Q209 (Sep08) – Interim 1.75ct
- SingPost : Q209 (Sep08) – 1.25ct ; Q109 (Jun08) – 1.25ct
- SPH : 2H08 (Aug) – 9ct + 10ct (Special) ; 1H08 (Feb) – 8ct
- ComfortDelgro : Q208 (Jun) – 2.6ct
- SBSTransit : Q208 (Jun) – 3ct
- MIIF : 1H08 (Jun) – 4.25ct
- ST Engg : Q208 (Jun) – 3ct
- Sing Food : Q208 (Jun) – 1.8ct
- M1 : 1H08 (Jun) – Interim 6.2ct
- MacCookPSF : FY09 (Jun) – A1.75ct (Gross ie. before with-holding tax) / Quarter ; Source : SGX
- MacCookPSF : Q408 (Jun08) A2.31ct @ 1.3092 ; Q308 (Mar08) A2.31ct @ 1.2525 ; Q208 (Dec07) A2.31ct @ 1.2485 ; Q108 (Sep07) – A2.625ct (Gross) / A2.31ct (After With-hldg Tax)
SPAusNet – CIMB
Steady and predictable
• Steady demand in Victoria state. As the second most populous state in Australia with an annual population growth rate of 1.7%, the establishment of new townships and customer connections for gas and electricity distribution can drive steady demand growth for SPN.
• Certainty of revenue and cash flow. Management reiterated that regulated revenue (90% of group revenue) has been locked in until 2011. All the latest resets were done by Apr 08 and there are no further regulatory resets until 2011.
• Focus on maintaining A rating. While management acknowledges that mediumterm interest rates could fall and it may miss the opportunity to refinance at lower rates, its focus is on managing its long-term average cost of debt. Its key objective is to continue to meet and exceed credit rating criteria to maintain its A debt rating. This is important as A ratings will make it easier for SPN to secure future financing
• Reiterate Outperform, maintain forecasts. We maintain our core net profit forecasts and DCF-derived target price of S$1.44 (WACC 10%). Distribution for 1H09 was within guidance and the stock will go ex-dividend on the SGX on 28 Nov 08 for an interim dividend of 5.927 A cts.