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Boustead Singapore (BUY; Target Price: S$1.36)

Boustead’s FY11 net profit saw a 21 per cent YoY increase to S$52.2 million, despite provisions of S$13.8 million for its Libyan projects in 4QFY11, which resulted in a loss of S$1.1 million for the quarter. Excluding the provisions, the results were largely in line with our expectation. Full-year dividend came up to S$0.07 a share, including a special dividend of S$0.03 a share, translating to an attractive yield of 7 per cent. In terms of valuation, we think the stock price is still at a depressed level and presents a good buying opportunity. Ex-cash FY12 PER (price-earnings ratio) of 7.3x, coupled with attractive dividend yield and strong net cash position of S$184.6 million, makes Boustead seem like a steal at its current price. Reiterate BUY with target price raised to S$1.36 after marginal adjustments to our figures. – Kim Eng Research

CNA Group (SELL; Target Price: S$0.14)

CNA’s 1Q11 results disappointed, attributable to lower than expected revenue and higher expenses. 1Q11 earnings were down 69.1 per cent YoY at S$0.6 million, on the back of a 22.8 per cent YoY decline in revenue, with reduced contribution from the Middle East. Following the disposal of its 49.9 per cent-owned water treatment associate, Standard Water Ltd that resulted in losses of S$25 million in FY10, we expect CNA to return to the black in FY11, although it is likely to be below our initial forecast of S$6.4 million. Thus, we have lowered our FY11 earnings estimates to S$2.4 million. On the bright side, CNA’s balance sheet is strengthened following the share placements to Mitsui and Mitsubishi and it intends to tap on their businesses/network to expand. However, in the absence of a strong near-term catalyst, investors will probably take a while before revisiting this stock. Maintain SELL recommendation, with a lower target price of S$0.14, based on 11.9x FY11 earnings. – DMG Research

Eu Yan Sang International (BUY; Target Price: S$0.99)

Established in 1879 and listed on the SGX in July 2000, Eu Yan Sang is a manufacturer and retailer of Traditional Chinese Medicine (TCM) with sales predominantly from Singapore, Hong Kong and Malaysia. We like the stock as: it is a well-established and trusted brand with a dominant market share in its three main markets; rising consumer affluence and health consciousness will be a catalyst to sales; margin expansion from effective cost  management; integrated approach to TCM to appeal to larger target market. We initiate with a BUY and target price of S$0.99, pegged to 15x FY12F earnings. – DMG Research

Foreland Fabrictech (NEUTRAL; Target Price: S$0.17)

Foreland has entered into a placement agreement to place up to 45 million new shares at a placement price of S$0.1235, representing 9.9 per cent discount to the volume weighted average price of S$0.1371 for trades done on May 24. The net proceeds will be S$5.5 million after deducting expenses of S$57,500. The company has a robust balance sheet given that it has zero debt and cash balances of RMB137.2 million as at 1QFY11. However, its existing coffers might not be sufficient to support its planned capex for new factories and increase in working capital on the back of business growth. The rough estimate for the capex ranges from RMB100 million to RMB140 million. The new shares would be placed to four investors. The prominent ones are Asdew Acquisitions and Han Seng Juan, making up about 88 per cent of the total new shares. We keep our forecast unchanged as we opine that the recent fund injection would have little P&L (profit and loss) impact. We adjusted up the weighted and total shares outstanding to reflect the issuance of new shares. Our target price as such is lowered to S$0.17 from S$0.19. It is based on a deep discount of 30 per cent on 7x FY11 PER (price-earnings ratio) to account for negative sentiment towards S-chip and uncertainty factors arising from the new factory. The rerating catalyst is the smooth transition to the new factory which will commence operation in 3Q. We downgrade the counter to neutral as the share price has increased nearly 70 per cent since our initiation report and share overhang might persist for a while as the placees could take profit from the discounted placement price. – NRA Capital

Metro Holdings (Not Rated)

As of FY11, Metro has a net cash of S$121.3 million. The proposed total dividend payout of s$0.05 a share for FY11 translates to a yield of 5.3 per cent. In addition, the bonus issue may help improve the trading liquidity of the stock.  Metro has significant investments in commercial properties in Tier 1 cities in China, namely, Shanghai, Beijing and Guangzhou, with an attributable NLA (net lettable area) of 1.5 million sq ft. With commercial assets attracting substantial investment attention, Metro is considering the possibility of divesting Metro City Beijing, which is valued at S$320 million and in which it has a 50 per cent stake. If divested, shareholders could look forward to more special dividends in FY12. Metro also has a 10.7 per cent stake in two funds led by Tesco, each invested in three mixed properties in China. One possible scenario is for these two funds to be combined and listed as a REIT, or sold to a third-party REIT, thereby allowing Metro to exit and realise its return on investment. – Kim Eng Research

Singapore Exchange (BUY; Target Price: S$8.97)

Singapore Exchange Ltd’s (SGX) share price has fallen about 27 per cent from its 52-week high. We attribute this to the current muted market sentiment for equities, as seen from the decline in trading volume and value on the local in April and May. This means that it will end the final quarter of FY11 on a quieter note. We believe that value is starting to emerge at current level as management is still pushing ahead with its organic growth plans and coming out with a series of new products, especially for the derivatives market. While the near term market sentiment is weak, we expect FY12 to be a better year, with projected net earnings growth of 14 per cent to S$309.0 million. Current dividend yield is also decent at about 3.0 per cent. SGX is a well-run and cash generative business model. At current price level, we are reiterating our BUY rating with fair value estimate of S$8.97. – OCBC Investment Research

Viz Branz (HOLD; Target Price: S$0.30)

Coffee prices have increased by 16 per cent and 23 per cent for Arabica and Robusta coffee since the start of the year. Escalating demand and threat of reduced supplies have fuelled price increases. As a producer of coffee related products, Viz Branz has naturally experienced cost pressures too and has hiked prices once this year. Despite the selling price increase, Viz Branz has not experienced a fall in market share or selling volume. We attribute this positive trait to its strong brand and quality recognition, and coupled with the inherently sticky nature of coffee consumption, and we believe that revenue growth prospects for Viz Branz should remain as forecasted. As such, we maintain our HOLD rating for Viz Branz at S$0.30, which represents a 15 per cent discount from our fair value estimate of S$0.35 on account of its low trading volume. – OCBC Investment Research