Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-CIMB, DBS downgrade Broadway after weak Q3 results

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STOCKS NEWS SINGAPORE-CIMB, DBS downgrade Broadway after weak Q3 results Oct 31st 2012, 04:03 Wed Oct 31, 2012 12:03am EDT CIMB Research and DBS Vickers downgraded Broadway Industrial Group Ltd after the technology components manufacturer posted weak third-quarter earnings on sluggish demand and high costs. Excluding exceptional items, Broadway incurred a loss in the third quarter due to a steep decline in both hard disk drives (HDD) and non-component-related businesses, CIMB noted. CIMB said though Broadway trades at a low price-to-book value, it sees few re-rating catalysts given the tough operating environment over the next few quarters. It downgraded Broadway to 'underperform' from 'outperform' and cut its target price to S$0.27 from S$0.46. DBS Vickers cut its earnings estimates by 38 percent for 2012 fiscal year and by 29 percent for 2013, citing persistent margin pressure and uncertain HDD recovery. It downgraded Broadway to 'fully valued' and reduced its target price to S$0.26 from S$0.38. 1153 (0353 GMT) (Reporting by Eveline Danubrata in Singapore; Editing by Subhranshu Sahu; eveline.danubrata@thomsonreuters.com) ************************************************************ 11:30 STOCKS NEWS SINGAPORE-CIMB ups SIA Engineering target price CIMB Research raised its target price for SIA Engineering Co Ltd to S$4.70 from S$4.56 and kept its 'outperform' rating, citing potential catalysts from stronger-than-expected maintenance, repair and overhaul demand. By 0323 GMT, SIA Engineering shares were unchanged at S$4.16 and have gained 21.2 percent since the start of the year, compared to the Straits Times Index's 14.6 percent gain. SIA Engineering said its second-quarter net profit fell 5.8 percent from a year earlier to S$67.1 million ($55 million), dragged down by foreign exchange loss and higher expenses, but in line with expectations. The expansion of Asian low-cost carriers should sustain SIA Engineering's 6 percent earnings growth till 2015 and an average return on equity of 23 percent, CIMB said. It added that SIA Engineering's dividend yield of 5.3 percent, backed by a net cash of S$429 million and nearly zero debt, makes it an attractive stock. OCBC Investment Research also raised its target price for the company to S$4.14 from S$4.04 and maintained its 'hold' rating. 1125 (0325 GMT) (Reporting by Charmian Kok in Singapore; Editing by Anand Basu; charmian.kok@thomsonreuters.com) ************************************************************ 10:22 STOCKS NEWS SINGAPORE-Brokers say Tiger to benefit from Virgin deal Several brokers said Tiger Airways Holdings Ltd is set to benefit after Virgin Australia Holdings Ltd said it will buy 60 percent of the Singapore budget carrier's Australian unit for A$35 million ($36.2 million). Tiger and Virgin Australia will team up to manage Tiger Australia. Tiger shares were flat at S$0.74 on Wednesday. The stock has increased 16.5 percent so far this year versus the 22 percent gain in the FT ST Small Cap Index. "We deem this as a longer-term positive. We think that Virgin is likely to optimise route portfolio by focusing Tiger Australia on shorter leisure routes and Virgin on longer routes better suited for its full-service product," CIMB Research said in a report. "We also view this as Tiger's attempt to focus on Asia's higher growth markets. Tiger Singapore is already profitable and management is committed to a breakeven in its Philippines and Indonesia associates." CIMB raised its target to S$0.83 from S$0.81 and maintained its 'neutral' rating on the stock. DMG & Partners Securities said it believes the price paid by Virgin is "fair" given that Tiger Australia's book value was negative S$222 million ($182.1 million) as of September. The broker upgraded it to 'buy' from 'neutral'. DBS Vickers said it views the deal as an opportunistic move by Tiger to improve its balance sheet and partner with Virgin. It raised its target price to S$0.95 from S$0.90 and maintained a 'buy' rating. OCBC Investment Research said Tiger can dispose of a substantial chunk of its loss-making entity while allowing it to retain participation in Australia's domestic market. But OCBC said any unexpected increase in losses from Tiger's associate airlines could derail its recovery process. 1009 (0209 GMT) Link this Share this Digg this Email Reprints

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