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Investors’ Corner
Investors' Corner | 05 February 2010
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By: Lai Wyai Kay
Articles (53) Profile

Biosensors Int’l Group
Price – $0.80
Target – $1.23
Biosensors (BIG) reported a strong set of 3Q10 results, with 9M net profit meeting 85% of our FY10 forecast, underpinned by strong drug-eluting stent (DES) revenue growth (28% q-o-q) and contributions from JW Medical Systems (JWMS). We see catalysts in continued momentum in its forthcoming results, the potential value-unlocking of its 50% stake in China DES supplier, JWMS, and Japan’s approval of Terumo’s Nobori Stent, whose technology is licensed from BIG. The US$4.5b DES industry is one of the most profitable segments in the medical technology space, driven by innovation. Start-ups like Biosensors with leading-edge technology are subject to takeovers by incumbents. Excluding its 50% stake in JWMS (US$468m on our estimates), BIG is trading at 8x FY11F core P/E, 1.3x FY11F price/sales, which implies that the stock is undervalued. Reiterate BUY. – Nomura Securities (29 Jan)

CDL Hospitality Trusts
Price – $1.76
Target – $2.32
CDLHT acquired 5 hotels in Brisbane and Perth (1139 rooms in total) for A$175m. The freehold hotels are well-located in CBD areas. We believe the purchase price is attractive and expect minimal rental growth for the 5 hotels until 2021, as the lease with Accor allows rent to rise by only 0.4% for every 5% increase in RevPar. After 2021, rent could potentially rise by 30-40%. We reiterate that CDLHT is one of our top picks in Singapore. This acquisition shows management’s ability to source out deals to grow the portfolio with wellpositioned assets. The trust is also best placed to benefit from the 18% p.a. growth in Singapore hotel RevPar in 2010-2011 as the two integrated resorts open. We continue to expect the trust to be on the look out for accretive acquisitions. Key target markets are Australia, Japan, Singapore and China. Unchanged at BUY. – UBS Investment (29 Jan)

CapitaRetail China Trust
Price – $1.20
Target – $1.22
CRCT’s 4Q09 results were in line with our expectations. Gross revenues and net property income were 5.3% and 0.8% lower y-o-y at $29.6m and $20.3m respectively, mainly due to weaker Rmb and S$, tenant remixing activities at Wangjing mall coupled with lower performance from Saihan Mall. Income available for distribution grew a marginal 1.3% to $12.9m. The trust also revalued up its book value by 1.2%, gearing levels remained the same at 33.6%, interest cover is high at 8.0x. Performance should remain stable in 2010. While occupancy levels remained relatively stable at 95%, rental reversions at Wangjing (- 4.9%) and Xizhimen (-3.3%) continued to be negative in 4Q09 due to tenant remixing but declines narrowed when compared to a year ago. While CRCT’s exposure to China’s consumption and urbanization story is positive, we see limited upside to our target price at current levels. Maintain HOLD. – DBS Vickers (1 Feb)

Wilmar Int’l
Price – $6.59
Target – $6.54
Wilmar announced that its application to list its China operations on the Hong Kong Stock Exchange had expired, with no intention of submitting a fresh listing application. We believe this announcement is ‘old news’ and should not have a lasting or major effect on Wilmar’s share price in the future. Our six-month target price is based on the assumption that palm oil-related stocks such as Wilmar will trade in association with crude palm-oil (CPO) prices based on their historical correlation. We forecast CPO price to decline to about US$650/tonne by 30 June 2010 from a current spot price of about US$717.75/tonne. We are cautious about palm-oil prices, which we expect to decline by 30 June 2010 as a result of rising inventory. We are positive on Wilmar’s refining business, where we think market fundamentals will be stronger than for the plantation operation in 2010. Maintain HOLD. – Daiwa (2 Feb)

CDL Hospitality Trusts  1.620 -0.010 -0.61%   
Business: A stapled group comprising CDL Hospitality REIT and CDL Hospitality Business Trust.

Insight: Apr-19, 1Q19 gross revenue and NPI dropped 10.6% a... Read More
CapitaLand Retail China Trust  1.540 +0.010 +0.65%   
Business: Co is a real estate investment trust with a portfolio of retail real estate across China.

Insight: Apr-19, 1Q19 gross revenue increased 1.1% in SGD t... Read More
Wilmar Int'l  3.840 -0.06 -1.54%   
Business: Co's integrated agribusiness model encompasses the entire value chain of the agricultural commodity processing biz, from origination and processing to branding, merchandising and distribution of a wide range of agricultural pdts.

Insight: May-19, 1Q19 revenue fell 6.2% to US$10.4b driven ... Read More

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