CAPITALAND, cimb downgrade to UNDERPERFORM with target price
$4.21($6.15)

FERROCHINA, daiwa maintain BUY with target price $1.55($2)

JAYA, cl upgrade to BUY with target price $1.45

KINERGY, wc initial coverage HOLD with target price $0.11

SEMBCORP MARINE, nom upgrade to STRONG BUY with target price $4.86

SIA ENGINEERING, uob upgrade to BUY with target price $3

CAPITALAND, cimb downgrade to UNDERPERFORM with target price
$4.21($6.15)
- De-rating of its key markets. CapLand¡¯s inventory is beginning to
build
up in China. We believe Chinese developers are starting to cut prices.
CapLand¡¯s large exposure to this market could prove to be a bugbear in
the
near term. Alice Chong, our Hong Kong/China property analyst believes
that
prices have fallen 10% YTD in China. A weakening economy places the
value
of its commercial assets at risk. In Singapore, we believe CapLand
faces
the possibility of lower-than-expected ASPs for its residential
projects
and value impairment for some of its expensive land bank.
- Balance sheet not a concern but recycling model faces headwinds. We
believe that market concerns of an over-stretched balance sheet masked
under the group¡¯s complex associate holdings are overdone. We
understand
that associate debts are all structured on limited recourse with no
corporate guarantees. We estimate that net gearing will fall to 0.53x
from
0.68x (as at 2Q08) with proceeds from recent divestments. Even if we
assume
off-balance sheet debt and distress scenarios, we estimate that
net-gearing
will rise to only 0.82x. However, as divestible assets dwindle against
a
backdrop of poor credit and property market conditions, the
sustainability
of its capital-recycling model could be severely tested in the near
term.
-Downgrade to Underperform from Neutral. Our FY08-10 core EPS estimates
have been lowered by 6-17% on lower capital value assumptions. We also
lower our end-CY08 RNAV estimate from S$6.15 to S$5.26 and peg our new
target price of S$4.21 (previously S$6.15) at a 20% discount to RNAV
(previously parity) as we see the potential for further weakness in
China,
slowing AUM growth and impairment of its Singapore residential land
bank.

FERROCHINA, daiwa maintain BUY with target price $1.55($2)
- We reiterate our 1 rating for FerroChina (FRC) as the stock still
offers
96% upside potential from the current share price despite us lowering
our
six-month target price to S$1.55 from S$2.00, based on a more
conservative
valuation (ie, a target PBR of 0.7x on our FY09 forecasts) than we used
previously.
- Our valuation basis is in line with the current valuation multiples
of
Maanshan Iron & Steel (Maanshan) (323 HK, HK$3.11, 2), which has a
similar
ROE and gross-profit margin, and we see as a reasonable comparable.
-Margin expansion and new capacity additions. We forecast FRC¡¯s net
profit
to increase by 145% YoY and 32% YoY for FY08 and FY09, respectively,
driven
by our forecasts of 136% YoY and 29% YoY rises in sales volume,
respectively.
- We forecast the unit gross profit to increase by 5% YoY and 12% YoY
for
FY08 and FY09, respectively, to Rmb512/tonne by FY09, due to product
optimisation and what we regard as management¡¯s strong execution
capability.
-We believe the downside risks remain external. We see the downside
risks
to our earnings forecasts all as external, such as slow approvals or
the
government rejecting strategic investments in FRC by foreign steel
suitors,
tight credit and slower (or the cessation of) Renminbi appreciation
against
the US dollar (which may result in higher effective financing costs).

singapore stock market news,singapore stock market

CAPITALAND, uob maintain BUY with target price $6.50($7.15)

CAPITAMALL TRUST, ocbc resuming coverage BUY with target price $3.21

HUPSTEEL, dbs maintain BUY with target price $0.4($0.57)

KS ENERGY, gs maintain NEUTRAL with target price $1.94($2.10)

OLAM, ubs maintain BUY with target price $3.75

RAFFLES EDUCATION, cl upgrade to BUY with target price $1.20

SILVERLAKE, dbs downgrade to HOLD with target price $0.3($0.45)

UOL, gs initial coverage NEUTRAL with target price $3.42

WING TAI, gs initial coverage SELL with target price $1.12