Sep[4] - ST Engineering (Benefit from stronger USD)

COUNTER: Singapore Technologies Engineering Ltd

OVERVIEW:
Headquartered in Singapore, the counter is an integrated engineering group providing solutions and services in aerospace, electronics, land systems and marine sectors. It has over 100 subsidiaries and associated companies in 46 cities across 24 countries. Temasek Holding is its major shareholder with 51% of shares. It is ranked among the largest listed entity in local market.

HIGHLIGHTS:
[1] On 1H2015, the counter achieved revenue at $3.06b which was comparable to 1H2014. Net profit dropped 6% year on year. Marine segment registered huge drop in revenue at 20% year on year, due to lower shipbuilding revenue from local and US operation. The rest of segments is comparable year on year.

[2] The order book stood at $12.4b by 1H2015. $2.3b of orders is expected to deliver in the remaining of months of 2015. New contracts worth at $1.34b were secured on latest quarter from aerospace and electronics segments.

[3] The management is expecting higher revenue and profit on 2H2015. For full year 2015, it shall be comparable to full year 2014.

INVESTMENT THEMES:
[1] The counter has its ~22% of sales in US. Its revenue is priced in USD, but most of the cost like labor costs are charged in SGD. In the medium term, this should translate into higher profit due to strengthening of USD against SGD.

[2] Defence related work accounts for 33% of total revenue, with majority from Singapore government. FY2015 defence budget is projected to rise 4.4% year on year, which in turn should benefit the counter.

[3] The following chart is showing historical 10 years P/E range of the counter. It is now trading at low end, thus present attractive entry price. Dividend yield is > 5% as of now.

ENTRY PRICE:
From the price chart, the counter has fallen to low range over past 5 years. Immediate support is 2.74, so suggestion is to accumulate now. Investor could target both dividend and price gain in mid to long term.

Sep[3] - Centurion (Housing business on the rise)

COUNTER: Centurion Corporation Limited

OVERVIEW:
The local company started its business in optical storage media industry and listed on SGX in 1995. Following a reverse acquisition exercise in 2011, it successfully diversified into the accommodation business. As at March 2015, its portfolio consists of 14 operational accommodation assets totaling 45,662 beds. 9 of them are worker accommodation assets in Singapore and Malaysia. The rest are student accommodation assets in Australia and UK. It develops, owns and operates these dormitory assets.

HIGHLIGHTS:
(1) Latest financial results saw net profit from core business on 1H2015 surged 45% to $19mil year on year. This was mainly due to expansion into student accommodation in UK, coupled with increase of bed capacity in local worker accommodation.

(2) On July, 4th local worker dormitory will be completed. Further expansion of bed capacity in Malaysia will be completed on 4Q2015. The counter expects to increase 80% of bed capacity in its overall portfolio by end of 2017.

(3) In view of strong and stable financial performance, the management decided to pay dividend on half year basis to reward shareholders.

INVESTMENT THEMES:
(1) Throughout past 4 years, the counter has been showing its growth in revenue, earning as well as total asset. In business prospect, further more income could be expected up to next two years. Looking at current P/E ~ 3.2x, price has entered attractive range. Expected dividend yield will be 2.5 ~ 4%

(2) The counter business operation is highly recurring from rental income. Most broker firms derived target price > $0.65 for the counter based on DCF model.

(3) The counter issued $65mil fixed rates notes in Jul 15. With the fund coupled with existing cash balance of $81mil, management indicated ambition for further strategical investment thus creating more value to shareholders.

ENTRY PRICE:
Accumulate the counter amid recent market sell down.

Sep[2] - SingTel (Defensive play)

COUNTER: Singapore Telecommunication Limited

OVERVIEW:
The counter is a leading communication group with significant presence in Singapore and Australia (Optus). It own stakes in regional mobile associates, namely Bharti Airtel (India, South Asia and Africa), Telkomsel (Indonesia), Advanced Info Service (Thailand) and Globe Telecom (the Philippines). The services range include fixed line, mobile, data, internet, TV, infocomm technology (ICT) and digital solutions.

HIGHLIGHTS:
(1) Latest quarter results saw underlying net profit up 1.6% year on year. Depreciation of regional currencies, especially AUD and Rupiah was major downside catalysts. In constant currency term, the net profit would have improve 4.6%.

(2) In Singapore, the consumer revenue rose 6%, driven by higher mobile data revenue and equipment sales. The enterprise revenue fell 3% because revenue from fibre rollout has been transferred to NetLink Trust.

(3) In Australia, the consumer revenue is flat in SGD term but up 13% in AUD term. Optus' 4G population coverage rose 4% quarter on quarter to 90% at end July, with the rollout of new 700MHz network. Other regional associates improved 8.6% in total year on year.

INVESTMENT THEMES:
(1) Among local peers, the counter shall be the least susceptible to potential entry of 4th telecommunication operator. It has expanded its business footprint into the regions. Overseas associates contributes > 60% of its EBITA in FY15.

(2) The counter has been shedding 15% from the peak at 4.4 since July. It represents dividend yield at 4.7%. Generally local research firms gave target price > 4.3 for it, so current price represents discount >10%. From the chart, price is residing near immediate support 3.65. Shall market sentiment overturn after General Election 2015 and US Federal meeting on coming week, recovery could be around the corner. 

(3) From the historical P/E chart, the counter has fallen below average P/E.

ENTRY PRICE:
Accumulate now.

Sep[1] - OCBC (Own the home of your saving)

COUNTER: Oversea-Chinese Banking Corporation Limited

OVERVIEW:
The counter is the longest established local bank, formed in 1932. It operates banking business as OCBC Bank (Malaysia, etc), Bank OCBC NISP (Indonesia, etc) and Bank of Singapore in over 18 countries and territories. It has strategical stakes in financial business, such as Great Eastern (insurance), Lion Global Investor (asset management) and OCBC Securities (brokerage). In greater China region, it has 20% stake in Bank of Ningbo and also fully acquired Wing Hang Bank on 2014.

On 2011 and 2012, the counter was ranked by Bloomberg Markets magazine as the World's Strongest Bank.

HIGHLIGHTS:
(1) Latest financial results saw the group's 1H2015 core net profit up by 12% to $1.6B year on year with net interest income leap by 14%. Operating profit increased 6% year on year. Such performance is in line with its peers.

(2) In constant currency terms, customer loans at 2Q2015 grew 18% to $210B year on year. 41% is contributed from Singapore and 28% from Greater China. Customer deposits also grew 22% to $246B.

(3) Both leverage and capital ratio are well above regulatory requirement by Basel Committee.

(4) Newly acquired Wing Hang Bank contributed HK$1B for 1H2015. In Greater China region, consumer loan grew 110% to $58B, while non-performing loan (NPL) remained low at 0.3%.

INVESTMENT THEMES:
(1) The counter couldn't be isolated from recent market sell down. Current share price represents P/E ~ 8.7 and P/B ~ 1.1 which has fallen into attractive prize zone. An estimated P/E chart can be referred to below chart. Shall current price hits lower price, the more value it presents.

(2) Shall US Federal Reserve announce rate hike either end of 2015 or beginning of 2016, SIBOR (Singapore Interbank Offered Rates) is expected to follow suit as well. Local banks will be beneficiary of rising rate undoubtedly.

(3) Over past 4 years, dividend issued by the counter has been increasing > 2% annually. Total dividend issued on 2015 is 0.36, so the current dividend yield is ~ 4%.

(4) Assuming 5~6% sliding on loan growth and asset quality, DBS rated the counter at $10. It is based on P/B ratio at 1.1

ENTRY PRICE:
Accumulate now so as to catch the low entry then look forward next rising trend.

Sep[1] - OCBC (Own the home of your saving)

COUNTER: Oversea-Chinese Banking Corporation Limited

OVERVIEW:
The counter is the longest established local bank, formed in 1932. It operates banking business as OCBC Bank (Malaysia, etc), Bank OCBC NISP (Indonesia, etc) and Bank of Singapore in over 18 countries and territories. It has strategical stakes in financial business, such as Great Eastern (insurance), Lion Global Investor (asset management) and OCBC Securities (brokerage). In greater China region, it has 20% stake in Bank of Ningbo and also fully acquired Wing Hang Bank on 2014.

On 2011 and 2012, the counter was ranked by Bloomberg Markets magazine as the World's Strongest Bank.

HIGHLIGHTS:
(1) Latest financial results saw the group's 1H2015 core net profit up by 12% to $1.6B year on year with net interest income leap by 14%. Operating profit increased 6% year on year. Such performance is in line with its peers.

(2) In constant currency terms, customer loans at 2Q2015 grew 18% to $210B year on year. 41% is contributed from Singapore and 28% from Greater China. Customer deposits also grew 22% to $246B.

(3) Both leverage and capital ratio are well above regulatory requirement by Basel Committee.

(4) Newly acquired Wing Hang Bank contributed HK$1B for 1H2015. In Greater China region, consumer loan grew 110% to $58B, while non-performing loan (NPL) remained low at 0.3%.

INVESTMENT THEMES:
(1) The counter couldn't be isolated from recent market sell down. Current share price represents P/E ~ 8.7 and P/B ~ 1.1 which has fallen into attractive prize zone. An estimated P/E chart can be referred to below chart. Shall current price hits lower price, the more value it presents.

(2) Shall US Federal Reserve announce rate hike either end of 2015 or beginning of 2016, SIBOR (Singapore Interbank Offered Rates) is expected to follow suit as well. Local banks will be beneficiary of rising rate undoubtedly.

(3) Over past 4 years, dividend issued by the counter has been increasing > 2% annually. Total dividend issued on 2015 is 0.36, so the current dividend yield is ~ 4%.

(4) Assuming 5~6% sliding on loan growth and asset quality, DBS rated the counter at $10. It is based on P/B ratio at 1.1

ENTRY PRICE:
Accumulate now so as to catch the low entry then look forward next rising trend.