Company News

Centurion reported a 47% growth in 3Q14 net profit to S$7.9m, in-line with expectations driven largely by contribution from Toh Guan Phase 2 and RMIT Village in Melbourne. Going forward, earnings should be supported by growing contributions from its student dormitory business as well as its Malaysian dormitories, which we understand have hit occupancy levels of >90%, and are seeing robust rental growth. At current price, Centurion is trading at 14x FY14F PE and 11x FY15F PE, which is attractive in our view. Maintain Buy and our DCF-backed TP of S$0.91.

Olam’s 1Q15 core PATMI (excluding bio. gains and exceptionals) rose 14% y-o-y to S$48.1m, which was in line with expectations. The main driver for the better performance was a 10% y-o-y decline in interest expenses. We project a 24% earnings CAGR over the next three years as these assets reach their full potential. We have a DCFbased target price of S$3.05 for Olam. Our TP implies a forward PE of 18.4x which is in line with its average forward PE of 18.3x since the end of the GFC/start of 2009.

Core earnings of S$9m for Tat Hong were within our expectations. Revenue fell 18% y-o-y to S$153m due to weaker sales. Headline earnings of S$11.5m (+39% y-o-y) were boosted by S$2.5m of one-off items. Revenue from Australia remains weak (S$74m), registering a 4% decline both y-o-y and q-o-q. We therefore expect a slow recovery outlook for Australia. Meanwhile the listing of China business remains preliminary. The tower crane business contributed 13% of group revenue (S$90m) and segment profit (S$11m) for FY14. We estimate that the market cap of the listed entity would be less than S$110m (vs Tat Hong's current market cap of S$480m) at a valuation of less than 10x PE. We continue to value TAT at S$0.83 as we expect muted recovery of its Australian operations and earnings growth going forward. Our TP is based on blended 1x P/BV and 12x FY16F earnings. Maintain HOLD.

3Q14 headline net profit for Thai Beverage dropped by 9% y-o-y to THB3.7bn, while revenues inched up by 0.7% to THB35.3bn. The results are within expectations and the drop in headline profit is largely due to lower associates’ contribution. We are factoring in lower contribution from associates (namely FNN) largely due to the exceptional items recognised in the quarter ending Sep’14. As such, we lowered our FY14F earnings marginally by 2%. We are projecting 11%/9% growth in FY15F/16F at this juncture, lower than c.18-20% for FY13 and FY14F. That said, there could be upside from higher contribution from the Beer segment and/or faster turnaround at NAB. Our target price is S$0.80 based on sum-of-parts valuation.