OSIM Target Price $2.11 BUY by OCBC Research

OCBC has cut its target price for Singapore lifestyle products firm Osim International (OSIL.SI), which is best known for its massage chairs, to $2.11 from $2.34 and kept its buy rating.

OCBC Investment Research cut its target price for Osim to account for a larger share base resulting from the recent exercise of its warrants.

However, OCBC remains bullish on Osim's growth prospects as its product range should benefit from research and development efforts to boost product innovation.

"While current economic uncertainty surrounding the EU and U.S. could dampen investor sentiment, we believe that the fundamentals of Osim remain strong and ample growth opportunities exist," said OCBC in a report.
 

Petronas Chemicals BUY Target Price RM9.28 by OSK Research

OSK is upgrading Petronas Chemicals Group's 2012 financial year earnings forecast by 28 per cent based on expectations that current oil prices will sustain, which will, in turn, buoy the prices of chemicals products.

"Financial year 2011 were above expectations. We are upgrading our financial 2012 earnings forecast in line with the better outlook for the company.

"We continue to like the company's strong backing from Petronas group, especially in keeping its feedstock prices low, as well as, attractive dividend payout ratio of 50 per cent, which is the highest among its closest peers," it said in a research note today.

However, it said the company is still subject to uncontrollable factors which included fluctuations in the international price of petrochemical products, global economic conditions and utilisation of its production facilities based on demand.OSK is upgrading Petronas Chemicals Group's 2012 financial year earnings forecast by 28 per cent based on expectations that current oil prices will sustain, which will, in turn, buoy the prices of chemicals products.

"Financial year 2011 were above expectations. We are upgrading our financial 2012 earnings forecast in line with the better outlook for the company.

"We continue to like the company's strong backing from Petronas group, especially in keeping its feedstock prices low, as well as, attractive dividend payout ratio of 50 per cent, which is the highest among its closest peers," it said in a research note today.

OSK maintained a "buy" on the company.

However, it said the company is still subject to uncontrollable factors which included fluctuations in the international price of petrochemical products, global economic conditions and utilisation of its production facilities based on demand.

KNM BUY Target Price RM3.20 by Maybank IB Research

KNM Target Price :
RM3.20 by Maybank Investment Banking Research
RM3.43 by ECMLibra
RM3.34 by OSK Research.

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Hock Seng Lee HSL Target Price RM2.50 by OSK Research

Last year, HSL managed to secure RM532 million worth of jobs, which marginally surpassed our RM500 million target. This year, management is confident of bagging another RM500 million in new wins, with an upside potential of RM600 million, versus our assumption of a conservative RM400 million. In the near term, HSL may bag two road packages collectively worth RM150 million. It is also eyeing the Tg Manis port extension (RM300 million), Mukah airport extension (RM300 million), an education facility (RM260 million) and a flyover job (RM100 million).

We understand that the government intends to implement a mass affordable housing project across Sarawak worth RM1 billion. Another RM1 billion has also been allocated for rural infrastructure and utilities. While these jobs are sizeable, they will be broken up into packages worth RM20 million to RM30 million each, and we expect HSL to win some.

The management indicated that Phase 2 of the Kuching Wastewater Project is now 30% complete and on track for the 2Q2014 deadline. HSL has submitted its proposal for Phase 2 (RM500 million), with the results possibly made known after the state elections. The entire job over 4 phases is worth RM2.2 billion.

Given HSL's experience with Phase 1 and possession of the necessary equipment, we think it stands a good chance with the subsequent phases. We also gather that HSL is in discussions on a concession to maintain the wastewater system once it is completed.

The bulk of HSL's billings for the RM452 million Kuching sewerage project and the high-end The Leaf property sales should start accruing from this year, along with FY10's RM532 million new contracts.

Year-to-date, its order book replenishment stands at RM108 million, representing nearly a quarter of our FY11F new contract assumptions and nearly twice that of the same period last year.

The group is targeting RM550 million (our assumption is RM500 million) new contracts this year; with a particular focus on the Sarawak Corridor of Renewable Energy's (Score) agro-based growth node of Tanjung Manis.

Projects earmarked by HSL in Tanjung Manis this year include the RM350 million deepsea port extension, more than 100km of access roads and various high-margin marine civil works.

Also expected this year is the announcement of the remaining packages of RM2 billion worth of road jobs linking Score's energy sites involving 21 open tenders that were closed last year. HSL has tendered for seven of these.

Each package is valued at RM50 million to RM150 million. IJM Corp, Cahya Mata Sarawak Bhd (CMSB) and Loh & Loh Bhd Corp Bhd secured the early packages last year.

Keppel Land BUY Target Price $5.36 by CIMB Equities Research

CIMB Research has raised its target price for Singapore property developer Keppel Land (KLAN.SI) to $5.36 from $5.29 and kept its outperform rating.

CIMB Research said it expects Keppel Land to weather China’s property cooling measures relatively unscathed, as its township portfolio in Tianjin Eco-City, a China-Singapore government venture development, has seen strong initial residental sales and will produce sustainable growth in the next decade.

“Its stock underperformance serves to reinforce our positive view. We continue to expect price catalysts from rising China township prices and Singapore office rents,” said CIMB in a report.

The brokerage said it expects Keppel Land’s China business to increasingly become an important growth driver for the company’s value.

UOB BUY Target Price $25 by Credit Suisse

Credit Suisse has upgraded Singapore’s United Overseas Bank (UOBH.SI) to outperform from neutral and raised its target price for to $25.00 from $22.50.

Credit Suisse has raised its earnings per share estimates for UOB from 2011-2013 by 5-7% due to higher loan growth, fee income and an improvement in net interest margins in the second half of 2011.

“UOB is set to show the best loan growth in 2011 with a significant lead over DBS (DBSM.SI) and OCBC (OCBC.SI) already in the first quarter. Banks expect overseas loan growth to be the main driver in 2011, with UOB seeing the highest overseas loan growth,” said Credit Suisse in a report.

The brokerage also added that UOB is its new sector top pick, given its attractive return-on-equity of 13.7% versus 11.2% for DBS (DBSM.SI) and 12.8% for Oversea Chinese Banking Corp (OCBC.SI).

Golden Agri BUY Target Price $0.83 by Phillips Securities

Phillip Securities has upgraded its rating for Singapore-listed palm oil firm Golden Agri-Resources (GAGR.SI) to buy from hold and raised its target price to $0.83 from $0.74.

Phillip upgraded Golden Agri after the firm reported a better-than-expected 134% increase in its first quarter revenue to US$1.4 billion ($1.75 billion), due to better performance from its China operations and higher average selling prices.

The brokerage also noted that Golden Agri is expanding its downstream business, which will benefit from the growing affluence of emerging markets and rising popularity of edible oils.

We see the importance of Golden Agri’s need to improve their downstream business because diversification of their source of revenue will help them reduce their business risk.

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