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Investors’ Corner
Investors' Corner | 25 February 2011
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By: Gerald Teo
Articles (40) Profile

F J Benjamin Hldgs
Price – $0.385
Target – $0.425
We like FJB for its exposure to the Asian consumer retail segment and we believe it is well poised to benefit from increasing retail spending in the region. FJB has exclusive distribution rights in the region for a range of world-renowned brands and a reliable 30-year record in brand management and retailing. We believe the true potential of RAOUL lies in the huge US and European markets where FJB sells its RAOUL products to departmental and specialty stores. If RAOUL is able to gain acceptance in these markets, it could grow to an $400m business in 5-10 years’ time. We believe our target price fairly reflects FJB’s existing brand distribution and management business. However, there could be added value if RAOUL manages to take off bigger and faster than expected. Initiate with HOLD. UOB Kay Hian (22 Feb)

Price – $2.10
Target – $1.90
We believe the Libya protests may have an impact on Hyflux’s operations in Libya. Hyflux has significant exposure in Libya and Algeria, and continues to look for opportunities for water projects in the MENA region. We see risks that the contracts in Libya might not be honored if there is a change in government given these projects are co-owned with the existing government. If there is no change in government, we would still expect further delays for these contracts before work can begin. The tender for the 318,500m³/day Singapore desalination plant closed in Oct-10 with Hyflux putting in the lowest first-year tariff bid of $0.45. We believe Hyflux remains a strong bidder for this project given the proximity of this plant to its existing SingSpring plant. Downgrade to NEUTRAL. – JPMorgan (21 Feb)

Oceanus Group
Price – $0.25
Target – $0.375
Oceanus Group (Oceanus) issued a warning on 21 Feb-11 that it will probably record a net loss for 4Q10. As such, we have revised down our 2010 net-profit forecast by Rmb120m (36.2%). We spoke to management, who noted that the 4Q10 loss is due primarily to: 1) the bio-asset revaluation being lower y-o-y, 2) feed costs, and 3) further provisions for restaurants. Management is still trying to get to the root of the problems, but we suspect there may have been a change in accounting treatment by the company’s third-party valuation agent. The company’s share price declined by 12.3% on 21 Feb, the date of the announcement, which we think reflects the negative news in full. Maintain BUY. – Daiwa Securities (21 Feb)

Raffles Medical Group
Price – $2.16
Target – $2.35
Raffles Med’s 4Q10 results were in line with our estimates. Dec-quarter revenue grew 9% y-o-y, while core net profit rose 6% y-o-y to $12m. The $0.025 final dividend declared brings full-year payout to 41% of earnings, or up 16% y-o-y. Operating margin (excluding property revaluation gains) during the quarter was 20.4% (slightly down from 21.1% a year ago), but strong cash flows increased the cash hoard to $84.6m. Raffles Med has won the tender for a seven-storey freehold podium/ commercial property (Thong Sia Building) at 30 Bideford Road for $92.08m (or $2,158 psf/net lettable area), with plans for a specialist medical centre. Location is strategic we believe, given proximity to Orchard Road and Parkway’s Mount Elizabeth Hospital. Maintain NEUTRAL. – Credit Suisse (21 Feb)

F J Benjamin Hldgs  0.031 -0.001 -3.13%   
Business: Co engages in the brand building and management, and development of retail and distribution networks for international luxury and lifestyle brands.

Insight: Aug-18, FY18 net loss narrowed significantly to $1... Read More
Hyflux  -- -- --   
Business: Provides integrated water management & environmental solutions. [FY17 Turnover] Municipal (82.5%), industrial (16%), others (1.5%).

Insight: Mar-19, 9M18 revenue sank 75% due to lower enginee... Read More
Oceanus Group  0.003 -- --   
Business: Co's principal biz activities include aquaculture pdtn & abalone processing & distribution.

Insight: May-19, 1Q19 revenue slid 32.4% mainly due to a de... Read More

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