Excerpts from latest analyst reports....
Barclays Equity Research says KEPPEL and SEMBMARINE offer attractive entry points
Analysts: Clement Chen, Clement Chen, Clement Chen
We expect Ezra (1-OW; PT S$1.70) to deliver the highest y/y earnings growth of our oil services and rig-builders coverage, owing to an uptick from its subsea segment and utilisation of its offshore support segment.
For China Oilfield Services COSL (3-UW; PT HK$13), on the other hand, we expect the least earnings growth, due to cost pressures.
We prefer Ezra and Keppel Corp (2-EW; PT S$13.30) going into the results season, as we see solid earnings growth and potential catalyst events, such as possible financing resolutions for Ezra and further contract awards for Keppel.
The key focus of the upcoming results will likely be on the operating margins of our coverage stocks.
Ezra is expected to deliver sequentially better margins, the Singapore rig-builders are also expected to at least maintain their operating margins, while the challenge remains for COSL to improve or maintain its margins whilst expanding its overseas businesses.
We believe the recent pull-back in share prices for Keppel Corp and Sembcorp Marine (1-OW; PT S$7) presents an attractive entry point for investors convinced that we are likely to see a multi-year increase in industry capex.
We view current valuations (trading below 10-year historical averages) as offering a significant value opportunity.
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CIMB says healthcare stocks have a new lease of life
Analyst: Gary Ng
ASEAN healthcare stocks have found a new lease of life, with share prices being re-rated amid increased trading volume.
But is this happening on the back of an upcoming new listing or are there other catalysts?
We found various themes at work, including a lack of new capacity that is driving healthcare inflation in Singapore.
An eventual unlocking of the value of Raffles Medical’s real estate for capital recycling could be on the cards.
Maintain Outperform, EPS and target price at 20x CY13 P/E, its mid-cycle valuations.
Catch this laggard: RFMD’s balance sheet has been stronger than peers with a net cash position, though there may be additional capex in the next few quarters.
ROEs are also strong, the result of the consistent return of spare cash to shareholders in the form of dividends.
Valuation-wise, the stock is at 17x CY13 P/E (24.5x for peers) and 11x CY13 EV/EBITDA (Asian sector average of 14x).
