Hi-P International (Not Rated) Hi-P was recently embroiled in a high-profile labour strike by 200 of its Shanghai workers when it attempted to consolidate two of its Pudong factories. The dispute has since been settled, with offerings of higher pay and travel incentives for its workers. However, the company does not expect any negative impact...

Eu Yan Sang (Not Rated) Healthzone Limited (HZL), Eu Yan Sang’s 16.6 per cent-owned Australian-listed associate, recently went into receivership and voluntary administration after failing to pay its suppliers. The carrying value of the investment was about S$8.8 million. Pre-tax contribution from HZL made up about 1.9 per cent of Eu Yan Sang’s total pre-tax...

SMRT Corporation (BUY; Target Price: S$2.04) As expected, SMRT announced that it will increase train frequencies on the North-South East-West Lines to lower the average interval waiting times during peak commuter travelling periods. As we have previously lowered our FY12F operating profits to account for the possibility of increased train runs and higher 3Q repair...

Keppel Corp (BUY; Target Price: S$11.40) Keppel Corp announced that its subsidiaries have secured contracts with a total value of S$150 million. This lifted their order win in 2011 to about S$10 billion (2010: S$4.6 billion), a new record for the offshore & marine unit. Details of the contracts: (1) Keppel Singmarine will build a...

Fuxing China Group Limited (NEUTRAL; Target Price: S$0.050) Fuxing recently announced that it expects to achieve a lower 4Q11 operating profit compared with that of 4Q10 and could see impairment losses from the write-down of its tangible and intangible assets. We estimate the write-down to be about RMB32 million, pertaining to the carrying value of...

Singapore’s Transport Sector (Ratings and Target Prices below) The uncertain economic outlook continues to weigh on business confidence, which in turn negatively impacts global travel and trade volume. Weak demand outlook and high current fuel prices raise concerns on the aviation and shipping sub-sectors, both of which we rate as UNDERWEIGHT. While the weakness seen...

Noble Group (BUY; Target Price: S$2.00) Noble Group’s 64.5 per cent-owned ASX-listed subsidiary, Gloucester Coal, has announced a merger with Yancoal, the Australian mining assets of Hong Kong-listed Yanzhou Coal Mining. Upon completion of the deal, Noble will hold an estimated 13.7-per cent stake in the enlarged entity and Yanzhou, an approximately 77-per cent stake....

Global Logistic Properties (BUY; Target Price: S$2.31) GLP announced that it has entered into a 50:50 JV with China Investment Corporation (CIC) to acquire 15 Japanese assets from Lasalle Investment Management (LIM) for US$1.6 billion, which is 7.5 per cent below valuation. The assets have total GFA of 770,989 square metres; 90 per cent are...

Amtek Engineering (Not Rated) Despite difficult economic times, Amtek’s 1QFY12 results showed resilient revenue growth of 9 per cent compared with a year ago. But gross and net profit margins declined (NPAT margin fell from 8 per cent to 6 per cent) due to strategic tooling sales done at cost, as well as forex-related losses....

CapitaLand (BUY; Target Price: S$2.76) We saw CapitaLand (CAPL) adding significantly to its bet on China last month with an acquisition in Chongqing (S$4.1 billion total development cost). Given CAPL’s balance sheet (gearing 0.28, cash S$5.5 billion), we believe management will continue to acquire Chinese assets notwithstanding hard-landing fears. We believe a hard look at...

Hi-P International (NEUTRAL; Target Price: S$0.62) Hi-P’s largest customer Research In Motion (RIM) had recently reported its 3QFY11 results on December 16 with US$265 million net profit (-70.7 per cent YoY) on the back of sales of US$5.2 billion (-6 per cent YoY). Along with the dismal results, management also shocked the investors by announcing...