July[4] - Keppel DC REIT (Accumulate ~ 1.08, Ride with Big Data)

COUNTER: Keppel DC REIT

OVERVIEW:
Being a real estate investment trust (REIT), the counter mainly invest on real estate assets which are primarily used for data center purposes. Its current portfolio comprises 8 data centers which strategically located in key data center hubs across 7 cities Asia Pacific and Europe. Keppel T&T (refer to posting on 8 May, 2015) is the sponsor for the counter.

HIGHLIGHTS:
(1) 2Q2015 results saw revenue of $26 mil which beat prospectus forecast by 4%.

(2) The counter has hedged against currencies, AUD and EUR for 2 years, thus minimizing impact on its earning from currency fluctuations until 2017.

(3) DBS rated this counter at $1.12 based on Discounted Cash Flow model. (DCF)

INVESTMENT THEMES:
(1) Based on 1H15 distribution per unit (DPU) of $0.0356, full year dividend yield could reach > 6% based on current trading price ~ $1.08 per share.

(2) New acquisition of Intellicentre 2 in Sydney, Australia is set to contribute revenue income of 2H2015.

(3) Since debut on SGX end of 2014, the counter has been riding upward trend until result announcement last week. Its resilient nature against various market downturn proves its worthiness to be one defensive counter in investor's portfolio.

(4) Considering current low debt ratio < 30%, investor could expect the counter to expand existing portfolio thus producing higher return in distribution.

ENTRY PRICE:
Accumulate ~ 1.08.

July[3] - Triyards (Buy ~ $0.45, What if oil rebounds?)

COUNTER: Triyards Holdings

OVERVIEW:
Headquartered in Singapore, the counter is an engineering and fabrication solutions provider focused on the offshore oil & gas industry.  With its experience in delivering vessels and complex projects, it has established as a front runner in the fabrication of liftboats and other oil & gas related assets in South East Asia (SEA). It owns and operates fabrication yards in Vietnam, Singapore as well as engineering facility in Houston, US.

HIGHLIGHTS:
(1) 9MFY15 net profit down 12% year on year due to higher administrative expenses. However, gross profit up 5% and gross margin was stable at 22%.

(2) It announced new order win of USD175m from client in SEA region. Totally, it has secured USD501m of contracts. This marks 3 conservative quarters of increasing orderbook (USD350m, 370m, 520m as at end 1Q15, 2Q15 and 3Q15).

(3) Crude oil prices has been hovering around USD51 per barrel. Technically, it has built support ~ USD50 per barrel. From its one year chart, it could been forming higher low in the trend, so more upside movement is expected.

INVESTMENT THEMES:
(1) Following the latest financial results announcement on 7 July, the counter has been surging >10%. It indicated positive response from the market towards its business prospect. From the weekly chart as below, the counter has been showing strong rebound lately. Both EMA10 and 20 are converging and pointing upwards. Traders could take position for short term gain.

(2) UOB rates this counter based on FY16 price to book value at 0.8x, thus deriving target price of $0.87. Current trading price basically represent 100% room to grow. It is also interesting to note that the counter lately issued SGD29.5m of warrants with exercise price at USD0.56 to Ezion. It further indicate the ambition of management.

ENTRY PRICE:
BUY ~$0.45

July[2] - CDL HTrust (Buy ~ $1.62, Welcome back tourists)

COUNTER: CDL Hospitality Trust

OVERVIEW:
The counter is a stapled group comprising CDL Hospitality Real Estate Investment Trust ("H-REIT"), and CDL Hospitality Business Trust ("HBT"). It is established with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate, which is primarily used for hospitality and/or hospitality-related purpose.

Currently, it owns 14 hotels and two resorts, comprising six hotels in Singapore; five in Australia's key gateway cities of Brisbane and Perth; one in New Zealand's gateway city of Auckland; two in Japan's gateway city of Tokyo, two resorts located in the Maldives, as well as the shopping arcade adjoining Orchard Hotel (Claymore Connect) in Singapore.

HIGHLIGHTS:
(1) 1Q2015 results saw 6% drop of Net Property Income (NPI) year on year. This was mainly due to lower contribution from Singapore hotels which saw Revenue Per Available Room (RevPAR) falling 10% year on year.

(2) Acquisition of Japan Hotels was completed on end of 2014. These hotels registered leap of 21% in RevPAR year on year due to 43% increase of foreign visitors. These income will only contribute to distributable income (in form of dividend) to shareholders from 4Q2015 onwards.

(3) The counter maintained its gearing ratio at healthy range ~ 32%. Floating rate borrowing was reduced from 48% to 39%. It should be ready to cope with any short term rate hike condition. Instead, the management has emphasized its ambition to further acquire profitable opportunity by using ample debt headroom.

INVESTMENT THEMES:
(1) In recognition of headwinds in Singapore tourism, Singapore Tourism Board (STB) has launched a series of initiatives to drive visitorship. Investor could take position for the rebound on tourism. Besides, coming financial results could see some positive catalyst from SEA game 2015.

(2) Generally, research houses put target price > $1.84 for the counter. Current trading price represents >15% of discount. Dividend yield is more that 6% annually. Investor could expect dividend > 0.052 per share to be released on August.

(3) The counter has been shedding >10% in prices. Worry over outbreak of MERS and rate hike from US could have been factored in. From the chart, it has been forming support ~$1.62 which is also nearing lower trading zone over past 3 years. Mid term traders could take position now.

ENTRY PRICE:
BUY ~$1.62

July[1] - Wilmar (Buy ~ $3.3, Eyes on Africa)

COUNTER: Wilmar International

OVERVIEW:
Founded in 1991 and headquartered in Singapore, the counter is today Asia's leading agribusiness group. Its business activities include oil palm cultivation, oilseed crushing, edible oils refining, sugar milling and refining, biodiesel and fertilizer manufacturing. The core strategy is a resilient integrated agribusiness model that encompasses the entire value chain of the agricultural commodity processing business, from origination and processing to branding, merchandising and distribution.

HIGHLIGHTS:
(1) Last month, Indonesia released export tax levy for various palm products. The bulk of the levy collection will be channeled to subsidize biodiesel, which would incentivize biodiesel production. Shall the new policy being executed successfully, Wilmar is set to be one clear beneficiary for its downstream operation and biodiesel segment.

(2) Latest financial results for 1Q15 saw net profit with a leap of 49% year on year which was spearheaded by soybean crushing margin. Low soybean prices due to oversupply of global soybean benefit China as it is the largest soybean importer and Wilmar is the largest soybean crusher in China (~22% of market share). The management is confident that the crushing margin remains positive going to mid-2015.

(3) African has been the world's second fastest growing economy over last two decades, according to the World Bank. Over the next decade, GDP is projected to rise by an average of 6% per year. The counter has been expanding its footprint in the continent since entering about 15 years ago. The revenue from African operation have increased by 29% over last five years.

INVESTMENT THEMES:
(1) Growth is the key to ensure profitability of business thus raising return to its shareholders. As one of the leader in agribusiness of Asia, investor could ride with the group's aggressive plan in expanding business footprint worldwide. Africa could be the bright spot of its business in future. The group has disclosed its ambition in the annual report of 2014.

(2) Agriculture is one of the key economy activities to human. Limited land and growing population shall lead to ascending prices on food in long term. Investor should position during current downtrend of plantation related companies due to lower commodity prices.

(3) From the chart, the counter has been trading between rising channel since end of 2014. Current trade price is near to the lower bound of the channel. Trader could take this as entry point for potential price gain. The counter used to issue dividend ~0.02 on August.

ENTRY PRICE:
BUY ~$3.3

June[4] - M1 (Buy ~$3.2; Let's make a CALL)

COUNTER: M1 Limited

OVERVIEW:
Established in 1997, the counter is 2nd licensed telecommunication service provider in Singapore. Besides mobile and iDD services, it also provides fibre broadband and fixed voice services. Its major shareholders, Axiata Group (from Malaysia), Keppel Co, SPH are holding 28%, 19% and 13% of shares separately.

HIGHLIGHTS:
(1) In 1Q2015, SingTel and M1 achieved increases in total mobile revenue at 2% and 1.6% year on year respectively. Starhub reported drop of 0.2%. In Broadband segment, M1 outperformed the peers with 31.2% growth year on year.

(2) M1 management is guiding for "moderate" earning growth for 2015. It is also positive on its fixed services segment, where it expects to grow share in the government and corporate sectors, citing the launch of new services like ultra-high speed broadband plans, data centre and cloud-based applications.

(3) It has entered investment agreement with Telecom Oman (TeO) in Oman which is a high income country with 4mil of population. TeO is currently an international gateway operator and mobile services reseller. It could evolve to be 3rd mobile operator in Oman.

(4) Singapore could welcome a fourth Telco operator into mobile market. SMRT previously announced its intention for the 4th license, but has abandoned the joint bidding with OMGTel lately.

INVESTMENT THEMES:
(1) Amid market worry over interest rate hike and possibility of 4th Telco operator, M1 has shed 20% in share price over last 4 months. At current price level, the dividend yield could be ~5.7% which is the highest among its peers.

(2) Based on discounted cash flow model, target price of M1 is $3.58. Current share price presents 8% discount. DBS, OCBC and UOB have upgraded rating on the counter.

ENTRY PRICE:
BUY ~$3.2 which has been formed as support line from recent downfall.

June[3] - STI ETF (Bargain Hunting)

COUNTER: STI ETF

OVERVIEW: 

SPDR funds are a family of exchange-traded funds (ETF) traded in US, Europe and Asia Pacific and managed by State Street Global Advisor. SPDR® Sraits Time Index ETF ("STI ETF") is Singapore's first locally created ETF which can be traded like any listed share. It seeks to generate return that closely correspond to the performance of Sraits Time Index ("STI"). 

Adopting physical replication model, STI ETF actually buy into constituents of STI so as to track its price movement. It releases dividend bi-annually with annual yield about 2.8%.

INVESTMENT THEME:

(A) Looking into the following chart, the forward Price to Earning ratio (P/E) of STI used to be swinging within 13.0x to 14.5x or even bigger since 2013. Current STI valuation touched forward P/E about 13.02 which is at the lower end of the swinging range. So opportunity is present for bargain hunting.

(B) US might not raise up interest rate drastically by end of 2015. Local market could welcome next "spring" in mid term.

(C) General election is widely expected to be around the corner. Market sentiment could give a boost to the local index.

ENTRY PRICE:
It is suggested to put STI ETF into one's shares portfolio so as to enjoy with overall market growth instead of picking individual counter. It is for mid-long term holding. Currently, STI ETF is testing support ~3.35 second time. Should STI return to its average forward P/E about 13.7x, investor could target 3.5 as exit price. 

Suggestion is to accumulate ~3.35. Next support is 3.21. Provided general earning prospect from STI constituents retains, investor could buy again.

June[3] - STI ETF (Bargain Hunting)

COUNTER: STI ETF

OVERVIEW: 

SPDR funds are a family of exchange-traded funds (ETF) traded in US, Europe and Asia Pacific and managed by State Street Global Advisor. SPDR® Sraits Time Index ETF ("STI ETF") is Singapore's first locally created ETF which can be traded like any listed share. It seeks to generate return that closely correspond to the performance of Sraits Time Index ("STI"). 

Adopting physical replication model, STI ETF actually buy into constituents of STI so as to track its price movement. It releases dividend bi-annually with annual yield about 2.8%.

INVESTMENT THEME:

(A) Looking into the following chart, the forward Price to Earning ratio (P/E) of STI used to be swinging within 13.0x to 14.5x or even bigger since 2013. Current STI valuation touched forward P/E about 13.02 which is at the lower end of the swinging range. So opportunity is present for bargain hunting.

(B) US might not raise up interest rate drastically by end of 2015. Local market could welcome next "spring" in mid term.

(C) General election is widely expected to be around the corner. Market sentiment could give a boost to the local index.

ENTRY PRICE:
It is suggested to put STI ETF into one's shares portfolio so as to enjoy with overall market growth instead of picking individual counter. It is for mid-long term holding. Currently, STI ETF is testing support ~3.35 second time. Should STI return to its average forward P/E about 13.7x, investor could target 3.5 as exit price. 

Suggestion is to accumulate ~3.35. Next support is 3.21. Provided general earning prospect from STI constituents retains, investor could buy again.