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Bookmark this page   Saturday, 04 Jul 2009

Today's Headlines Pacific Andes Holdings: Post rights, still a BUY Summary: The recent Rights cum warrant issue has helped to lower Pacific Andes Holdings’ (PAH) gearing from 0.9x to 0.6x. With net proceeds of S$204m, the fund will form part of its working capital and for general corporate expenses. Recent rebound in crude oil prices should not create undue concern over its costs of bunkers, as this formed about 11% of FY09 cost of sales (even when oil prices shot to record high then). We are expecting organic growth in FY10 and FY11, stemming from the deployment of five vessels to the South Pacific which will mean increased catch volume as well as better synergies from its integrated Peru operation. Maintaining the same peg of 6x blended earnings, our post-rights adjusted fair value estimate is 31 cents. The stock has done very well this year, outperforming the STI with a gain of 68% versus 32% for the STI. With the recent softness in the market and with a potential upside of 48% to our fair value, we are reiterating our BUY rating. Previous Headlines >>     Market Pulse Pacific Andes (3 Jul 2009) KepCorp, Sembcorp Marine & SingTel (2 Jul 2009) Semiconductor Sector (1 Jul 2009) Straits Asia Resources (30 Jun 2009) UOB, Olam & Property (29 Jun 2009) Market Pulse: KS Energy Hyflux (25 June 2009) DBS & CMT (24 Jun 2009) Wilmar (23 Jun 2009) Market Pulse: Rotary & Midas (22 Jun 2009) more >>   Research Pacific Andes Holdings: Post rights, still a BUY Summary: The recent Rights cum warrant issue has helped to lower Pacific Andes Holdings’ (PAH) gearing from 0.9x to 0.6x. With net proceeds of S$2 ... Singapore Rig Builders: Unsubstantiated pricing; stay NEUTRAL Summary: The Singapore market continues to pin O&M plays such as Keppel Corporation (KepCorp) and Sembcorp Marine (SMM) to the movement of oil pr ... Semiconductor Industry: Recovery likely to come in 2010 Since our last sector report in May, we continue to receive myriad of positive news on the semiconductor industry. While some industry watchers wa ... Straits Asia Resources: Improving outlook The outlook for Straits Asia Resources Ltd (SAR) has improved along with tightening energy markets. The impact of global economic stimulus plans h ... Olam International Ltd: Shopping for distressed assets Olam International Ltd (Olam) has revived its inorganic growth pipeline with the purchase of tomato processing assets of SK Foods, a California-ba ... Singapore Property: Showflat visits update In our recent showflat visits, our check with property agents suggest that local buyers are still driving the demand for private properties and th ... more >>    Strategy Strategy: Realigning dividend expectations Summary: With the bears out in full force, investors will be looking to flee to safe harbours of high yield stocks for their money. However, some ... more >>

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