A-REIT’s 3QFY13 result was in line; operational performance stable. A-REIT has an active pipeline of developments and asset enhancements to sustain growth. Maintain HOLD. We like AREIT for its defensive portfolio and strong execution track record. Our HOLD call is based on valuation grounds: A-REIT offers less than 10% upside to our revised TP of S$2.30 (Prev S$2.24).
Ezion has secured a new liftboat charter contract worth US$116.8m, its maiden contract win for FY13. This contract value translates to a day rate of approx US$80k. This was awarded by an undisclosed South East Asian state-linked corporation, and is for a duration of 4 years. Scheduled for delivery in 4Q 2014, this unit is expected to commence operations in 1Q 2015. Our analyst estimates annual earnings contribution to be c. US$14.6m. No impact to FY13/14F as operations only commence in 1Q15. We do not expect any changes to our numbers and TP of S$2.12. Buy call maintained.
Yangzijiang is proposing to issue an aggregate of 330m warrants at an issue price of RMB0.3072 (S$0.0605). Each warrant carries the right to subscribe for one new share at the strike price of RMB7.617 (S$1.50) by 29 Apr 2016. Net proceed from the warrant issuance will be
RMB92.17m or S$18.15m, to be used to strengthen working capital and enhance capital base for future market expansion and development opportunities. 30m potential new shares represent 8.6% of current outstanding share or 7.9% of enlarged share cap. No dilution is expected in the near term as the exercise price implies a 36.4% premium over last closing price of S$1.10. Maintain BUY, TP: S$1.20.
Strong year-end holiday travel enabled Singapore Airlines to fill 82.2% of its seats in December, up from 79.6% a year earlier. This came on the back of a 6.1% growth in passenger carriage (measured in revenue passenger kilometres), compared with 2.8% growth in capacity. Load factors improved across all route regions as a result of growth in leisure passenger traffic. In particular, long-haul routes (Americas and Europe) led the gains due to strong year-end holiday travel demand. SilkAir's passenger load factor slipped 6 percentage points to 77.1% as systemwide passenger carriage increased 11.1% y-o-y against a 19.8% growth in capacity. The cargo side of the business continued to struggle. Cargo load factor rose 0.8 percentage point to 64.4% as overall cargo traffic slipped 8% y-o-y, against a capacity cut of 9%.
ST Engineering’s aerospace arm ST Aerospace announced that it has secured a contract to provide the Royal Air Force of Oman (RAFO) with a full scale maintenance and modernisation solution for three of its C130 Hercules aircraft. ST Aerospace will undertake both modernisation and maintenance work at its facility in Paya Lebar, Singapore.
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