CIMB - 15 Nov 2007

What’s on the table

Tat Hong Holdings (S$2.70) - 2QFY08 results - Towering above the competition Tat Hong’s 2QFY08 net profit of S$22.9m (+147% yoy) exceeded consensus and our estimates by 40%, attributable to significantly improved margins from better equipment sale margins and equipment rental rates. Gross margins rose to 40.6% in 2QFY08 from 38.1% in 1QFY08 and from 29.2% a year ago. Management expects a continued trend of better pricing for sales of both new and used equipment, rising rental rates and improved utilisation of equipment. We are factoring higher margin assumptions and stronger revenues. We raise our net profit forecasts by 43-53% for FY08-10, with a new target price of S$3.87 (previously S$2.84) on an unchanged basis of 15x CY08 P/E.

Quick Takes

· Wilmar International (S$4.82) - 3QFY07 results - Merger benefits came early
· Golden Agri (S$1.96) - 3QFY07 results - Only because of higher effective tax
· China Hongxing Sports (S$1.25) - 3QFY07 results - Impressive margin gains
· Sinomem Technology (S$1.26) - 3QFY07 results - Bombshell quarter
· Unisteel Technology (S$1.75) - 3QFY07 results - Get ready for the rebound
· Hong Leong Asia (S$3.4 – 3QFY07 results - Earnings growth in full swing
· Thai Beverage (S$0.26) – 3Q07 results - Net profit fell on increased expenses
· Hotel Properties (S$4.06) - 3Q07 results - Decent results despite en-bloc saga
· City Developments (S$14.20) - 3Q07 results - Strong results but caution looms
· Swiber Holdings (S$3.36) - 3QFY07 results – Becoming a driller
· Straits Asia Resources (S$2.99) - 3QFY07 results - Affected by force majeure
· Sino Techfibre (S$1.27) - 3Q07 results - Focusing on low-volume, high-margin
· Olam Int’l (S$3.12) -1Q08 results- Earnings growth despite Queensland losses
· Petra Foods (S$1.4 - 3QFY07 results - Not yet time
· China Fishery (S$1.74) -3QFY07 results- Increased contributions from fishmeal
· Pacific Andes(S$0.725) -2Q08 results- Strong contributions from China Fishery