Company News

Lian Beng announced 1QFY13 (ended 31 Aug 2013) PATMI of S$10.5m – down 44.9% YoY – mostly due to the absence of a one-time S$7.9m disposal gain from an investment property sale in 1QFY12 and no profit contributions from the fully sold 55%-owned industrial development, M-space, which can only be recognized at TOP in FY14, as stipulated by the accounting standard INT FRS 115. 1QFY13 top-line also came in 16.5% lower YoY at S$113.4m similarly due to lower contributions from the property development segment. Looking ahead, the group expects to launch Spottiswoode Suites and Hougang Plaza, both 50%-owned, later in the financial year. We would speak with management regarding 1Q results later today and, in the meantime, put our Buy rating of Lian Beng and fair value estimate of S$0.47.

ST Engineering: ST Aerospace secured S$590m of new contracts in 3Q12 Singapore Technologies Engineering (STE) has announced that its aerospace arm ST Aerospace has secured new contracts worth about S$590m in 3Q12. This total contract value is in addition to the component repair management Maintenance-By-the-Hour contract worth about US$80m (~S$102m) awarded by AirAsia in Jul this year. During 3Q12, ST Aerospace redelivered its first VIP Boeing Business Jet, a contract secured for B level check and interior modifications. Additionally, it completed airframe maintenance and modification work for 156 aircraft. We are confident that STE’s order book continues to expand healthily. We maintain our fair value of S$3.81 and BUY rating.

SingTel has secured the broadcast rights for the 2013-2015 Barclays Premier League (BPL), further adding to its suite of soccer content. Interestingly, it was on a nonexclusive basis, meaning that SingTel is not required to make the content available to
other Pay TV operators under the Cross Carriage ruling. And it also means that StarHub can separately negotiate for the same broadcast rights. While StarHub could win back some Pay TV customers should it secure the rights, we do not believe that it is crucial for the telco to do so. After all, it has done fairly well without BPL content for the past three years. It is also important to note that StarHub could be looking at a smaller pie than before. Until we see further developments in this space, we believe status quo should continue. We have an OVERWEIGHT view on the sector due to its defensive nature and relatively attractive dividend yields.