STOCKS NEWS SINGAPORE-Index edges down; Sembcorp Industries outperforms

Last Updated: Mon, Nov 12, 2012 05:30 hrs

Singapore shares were slightly lower, but Sembcorp Industries outperformed the market after several brokers highlighted the strong growth momentum and attractive valuation of the conglomerate's utilities business.

The Straits Times Index was down 0.1 percent at 3,006.22 points, while MSCI's broadest index of Asia-Pacific shares outside Japan was 0.2 percent higher.

Shares of Sembcorp Industries rose as much as 2.4 percent on a volume of 3.3 million shares, 1.2 times the average full-day volume over the past 30 days.

Sembcorp reported a 18.5 percent fall in third-quarter net profit to S$181.2 million ($148 million) from a year earlier, dragged by lower revenue recognition for its rig building projects.

However, net profit for its utilities unit jumped 27 percent to S$99.8 million. Utilities contribute about 55 percent of the group's net profit, while marine constitutes nearly 39 percent. The rest came from urban development and other businesses.

UOB Kay Hian said Sembcorp's utilities earnings growth in 2012-2015 fiscal years will be driven by three additional power plant capacities in Oman, Singapore and India.

Maybank Kim Eng said after stripping out Sembcorp's other business segments, utilities valuations still look "extremely attractive", trading at an implied price-earnings ratio of about 6.3 times for fiscal year 2013.

Shares of Harry's Holdings Ltd jumped as much as 53 percent to S$0.23, matching the price offered by F&B Asia Ventures Ltd, a unit of Everstone Capital Partners II LLC, to privatise the Singapore bar chain operator.

More than 1.5 million shares changed hands, 10 times the average full-day volume over the past 30 days.

1323 (0523 GMT)

(Reporting by Eveline Danubrata in Singapore; Editing by Sunil Nair;


12:09 STOCKS NEWS SINGAPORE-OCBC raises Tat Hong target price to S$1.70

OCBC Investment Research raised its target price on Tat Hong Holdings Ltd to S$1.70 from S$1.42 and maintained its 'buy' rating, citing the strong growth momentum of the cranes and heavy equipment supplier.

Tat Hong shares were down 1.1 percent at S$1.385 on Monday. The stock has jumped 57 percent so far this year versus the 21 percent gain in the FT ST Small Cap Index.

Tat Hong reported a 37 percent increase in second-quarter net profit at S$17.3 million ($14.1 million), mainly due to the strong performance by its crane rental and tower crane segments.

OCBC said given the tight utilisation rates of Tat Hong's cranes, the company was expected to buy more crane assets in the second half of 2013 fiscal year for various projects in the region.

This should deepen its market presence and provide the next leg of growth for 2013-2014 fiscal years, OCBC said.

1203 (0403 GMT)

(Reporting by Eveline Danubrata in Singapore; Editing by Subhranshu Sahu;


10:16 STOCKS NEWS SINGAPORE-Mewah at 2-mth low after Q3 net profit fall

Shares of Mewah International Inc dropped to the lowest in two months after the palm oil firm reported a 82 percent fall in third-quarter net profit to $1.2 million from a year earlier.

Mewah shares fell as much as 4.6 percent to S$0.415, the lowest since Sept. 11. The stock has fallen nearly 11 percent so far this year, lagging the 25 percent gain in the FT ST Mid Cap Index.

"The primary reason for the erosion in profits was Mewah's emphasis on trying to maintain its margins, even at the cost of volumes, and this resulted in net income being barely positive due to fixed costs," Nomura said in a report.

Nomura, which has a 'neutral' rating and S$0.45 target price on the stock, said the outlook for Mewah's fourth quarter appears weak due to the volatile crude palm oil prices. It added that a downward revision in its and consensus estimates is "inevitable".

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