CapitaCommercial Trust
Price – $1.13
Target – $1.37
CapitaCommercial Trust (CCT) proposed to embark on a $92m asset enhancements initiative for 6 Battery Rd, which is expected to be completed in 2013, but may stretch into 2015. The move will be funded internally, with the cost spread over 6 years, and is expected to yield a return on investment of 8.1%. To minimize downtime, the work will be carried out only during the interim period when new tenants fit out their space. Separately, Standard Chartered will be giving up 70ksf of space in 2011. We believe this is an opportune time for CCT to reduce its tenant-concentration risks by leasing out the space to more than 1 tenant, and in turn likely to limit any decline in renewal rents. In our view, this initiative is a defensive move to position CCT’s crown jewel positively against new buildings. Maintain OUTPERFORM. – CIMB-GK (31 May)

Noble Group
Price – $1.74
Target – $2.50
Being more exposed to industrial resources which is less resilient in a weaker environment and the leverage on its balance sheet, were the key negative stock price drivers as Noble declined about 20% year-to-date. However, Noble has a strong balance sheet – ungeared at -12%, with about US$400m in excess cash as of 1Q10. With more than two-thirds of its debt duration being 2.5 years or more, there should also not be refinancing risk in the near term. Noble’s credit spread on its 5–7 year debt papers has increased by a third since the end of March, and it is helpful that Fitch recently upgraded the outlook on Noble’s credit rating from Stable to Positive and reaffirmed its BBB- rating .With a large part of the US$642m investment from Chinese Investment Corp undeployed, there is an opportunity for Noble to further drive strategic investments. Maintain OUTPERFORM. – Macquarie (31 May)

Think Environmental Co, The
Price – $0.425

Target – $0.330
Think Environmental Co, The (TTEC) reported a 21% and 33% rise in its 2H10 revenue and PATMI respectively, due to improving office equipment sales and reduction in operating expenses. However, the financial crisis has hit the EPCC business more severely than expected. Till date, TTEC’s 75% owned subsidiary, IPT, has received 4 Letter of Intent awards but has yet to receive any firm contract wins. Furthermore, due to funding issues, Think Greenergy, England and Wales (TGE) will only be operational in Sep-10. TTEC has also acquired a 30% stake in a Singyu Energy Co for $2.1m. Singyu Energy Co has been awarded a biomass WTE project in China and is expected to be operational beginning Jun-10. In light of these, we are revising our earnings estimates downwards by 35% to $15m for FY11 and 16% to $29m for FY12. Downgrade to SELL. – DMG & Partners (31 May)

Genting Singapore PLC
Price – $1.00
Target – $1.29
According to the Singapore Tourism Board, tourist arrivals jumped 20.4% YoY – the fifth straight month in which record monthly visitor arrivals were logged. This bodes well with Genting Singapore’s recent post of a much stronger-than-expected set of 1Q10 results. Meanwhile, our checks suggest that the gaming activities over at Resorts World Sentosa (RWS) have remained fairly stable and were not adversely affected by Marina Bay Sands’ opening. RWS hotels continue to see high occupancy rates (>60%) and recently ramped up its daily intake for Universal Studios from the initial 3k visitors to 5k as the park continues to get run-in; we should see a further increase due to the upcoming June school holidays. Phase 2 of the integrated resort and new attractions should be ready by end 2011. Maintain BUY. – OCBC Investment (27 May)