Today's Focus
Tiger Airways (Buy, $0.95) - Dec and CY4Q12 operating stats point to an earnings turnaround; chart turns bullish.


Shares of Tiger Airways (Buy, TP: $0.95) rose yesterday after the company reported a strong set of December operating statistics, continuing its strong momentum in recent months and validating our analyst's views on its impending turnaround. For the month of December, overall passenger carriage grew by 34% yoy with a 3ppt improvement in load factor to 86%. For the quarter ending Dec '12, overall, passenger carriage grew by 42% yoy with a 5.7ppt improvement in load factor to 84.6%. Based on the operating  statistics, we believe Tiger Airways could be profitable in the  coming quarterly results release (at the very least close to break-even), which would end its streak of 6 consecutive quarters of losses and set a platform to return to full profitability in this calendar year.

The technical chart of Tiger Airways looked to have just turned bullish. Shares had been caught in a major symmetrical triangle consolidation for about as long as the company has been making losses in the past few quarters. It finally rose above this 12-15 month symmetrical triangle for the 1st time yesterday. The stock has also just risen above its converged 15D, 65-D and 200D EMA, which hints of an important upturn cycle ahead. Technically, the stock can attain our fundamental TP of $0.95 beyond the short-term.

Ezra posted 1Q13 results below expectations, but improving profitability on Offshore Support seen, which generated gross margins of ~24% (+6ppt q-o-q) on better utilisation rates. Separately, Ezra announced a batch of contract wins worth >US$160m from across its business divisions. In FY13 YTD, c.US$400m of subsea work has been secured, vs our full-year assumption of US$1bn, lifting its current backlog to c. US$930m. We have fine-tuned our FY13/14F earnings forecasts by -9%/-2% respectively. We expect bumpy road ahead to recovery; maintain BUY, TP raised to S$1.58 (Prev S$ 1.30) pegged to 1.15x FY14P/BV (previously 0.9x FY13 P/BV), in line with its historical average valuation post-GFC.

1Q13 results for SPH were marginally weaker than expected. Print ad growth was weaker due to economic uncertainty, offset partially by property rental contribution. Along with the muted domestic growth outlook, we expect SPH growth to remain lacklustre but DPS should remain intact at 24 Scts. Maintain HOLD for 5.8% yield, TP: S$4.01.

CapitaMalls Asia has been awarded a prime site for a shopping mall in Wuhan, China. The site, measuring about 70,400 sq m, was awarded at a price of RMB660.0m. Based on total gross floor area, excluding car park, the land cost is about RMB2,700 (S$525 / HK$3,328) per sq m. Subject to planning approval,
CapitaMalls Asia will develop the site into a six-storey shopping Mall. Targeted to open in 2015, the mall will be positioned as a one-stop shopping destination catering to the growing middleincome population.

Global Logistic Properties has pre-leased approximately 77,000 sqm to Deppon Logistics, one of China's leading third-party logistics providers. With the inclusion of these leases, Deppon Logistics is now GLP's second largest customer in China at 2.8% of total leased area. Sin Heng Heavy Machinery has incorporated a heavy machinery leasing venture in Myanmar. Sin Heng owns half of SH Equipment (Myanmar) Ltd, while the other half is controlled by Starhigh Asia Pacific, a vehicle of Myanmar native and naturalised Singaporean Si Thu Phyo. According to its CEO, Don Tan Cheng Soon, the company was already in advanced negotiations for several ports, power plant and oil & gas projects in Myanmar. Mr Tan said the incorporation of the new venture would deliver the quantum leap Sin Heng had been seeking since listing more than two years ago.

China Environment has been awarded the Fujian Provinciallevel Enterprise Technology Centre status recently. All the enterprises awarded this Provincial-level Enterprise Technology Centre status will receive grants from the government. This measure encourages enterprises to make progress in technology innovation and also motivate them to strengthen their R&D capabilities and profitability.

China is considering expanding its renminbi qualified foreign institutional investor (RQFII) scheme, said Guo Shuqing, chairman of the China Securities Regulatory Commission. The RQFII scheme allows qualified investors to place offshore renminbi funds into mainland stock and bond markets, while the qualified foreign institutional investor scheme (QFII) allows them to buy stakes in Chinese-listed stocks or bonds. Mr Guo added that current QFII and RQFII investment accounts, which account for 1.5 to 6% of the Ashare market, have room to be increased nine- or 10-fold.

US indices finished mixed with concerns about Apple's iPhone sales overshadowed a rally in Dell and commodities. Meanwhile, the Shanghai Composite rallied 3.1% yesterday after Chinese regulators said foreign-investment quotas can increase.

Source: DBSV