SINGAPORE DAYBOOK :Developers trim prices as new reality bites. New launches priced below expectations as buyers struggle to secureloans

[SINGAPORE] The impact is now there for all to see. Developers have been trimming launch prices for new private residential projects to adjust to the new market reality in the aftermath of the Total Debt Servicing Ratio (TDSR) framework's rollout in late June.
A case in point is the 445-unit Thomson Three condo in Bright Hill Drive, being developed by UOL Group and Singapore Land.
"Without TDSR, we could easily have priced this project at $1,500 psf on average, or even higher. We now expect to price it at a more realistic level, at $1,350-1,400 psf," said Liam Wee Sin, president (property) at UOL.
The showflat of the project, located at the Upper Thomson Road/Venus Drive corner, will open this weekend, although sales booking will begin two weeks later, on Sept 20.
(Source: The Business Times)

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(Source: The Business Times)

DMG OSK Securities says...

HIAP HOE LTD | BUY | TP: S$0.86

After purchasing its maiden overseas site at Pearl Hill Road, Melbourne, in August, Hiap Hoe yesterday followed up with a second acquisition in Melbourne
The latest purchase is a AUD43.8 m (SGD51.2m) commercial building in Melbourne's central business district
Situated on a site spanning 3,165 square metres (sq m) at the corner of Lonsdale Street and Elizabeth Street, the building includes 5,130 sq m of office space as well as ground-level retail tenancies
The acquisition comes with an approved planning permit to develop a 46-level mixed-use tower, with ground-floor retail, commercial office suites, 627 residential apartments as well as car park facilities
Given the rising land costs and increasing risk of property prices softening in Singapore, Hiap Hoe has shied away from aggressively bidding for sites in the local market
For the next 1-2 years, earnings will be underpinned by progress billings from Waterscapes @ Cavenagh (75% sold) as well as the rental income and room
revenue generated from its mixed development at Zhongshan Park Balestier
With its major capex completed and cashflow from its hotels streaming in, the
company is now in a steady cash-generating position, and has deployed its
capital for its overseas venture as well as hiking its interim dividend to 1.2cents
We continue to like the stock for management's execution track record and
discipline in landbanking
Maintain BUY with a TP of SGD0.86, based on 35% discount to RNAV to SGD1.32/share

OCBC Securities says ...

SEMBCORP INDUSTRIES | BUY | TP: S$6.48

Sembcorp Industries (SCI) announced last week that it will expand its water business in
China's Liaoning Province with two new wastewater treatment projects in industrial
parks in Panjin City
We see the initial phases of these projects as incremental expansions in China, adding about 10% to the group's total industrial water capacity in the country where SCI has about 298,000m3/day of industrial water capacity, and 1,030,000m3/day of municipal water capacity
The first would involve a JV agreement to build, own and operate a new RMB117.3m
(~S$24.3m) industrial wastewater treatment plant to serve industrial customers in Panjin
Fine Chemical Industrial Park (PFCIP)
SCI will hold 95% share in the JV, with the remaining 5% held by a firm owned by the
Panjin Fine Chemical Industrial Park Administrative Commission
The first phase of the plant will have a capacity of 10,000m3/day
For the second project, SCI plans to develop an industrial wastewater treatment plant with an initial capacity of 22,000m3/day in the West of Panjin Liaodong Bay New District
The plant will be capable of treating highly concentrated industrial wastewater, and is
expected to cost around RMB185m (~S$38.4m)
Management believes that the industrial park in which this plant is located has strong growth potential
The group's utilities business in China has seen good growth over the years, with net
profit increasing from S$6m in 2009 to S$30m in 2012
We are expecting net profit of about S$50m this year; 1H13 net profit has already reached S$32.7m
SCI has a long track record in China, having invested there for about twenty years
and with a presence spanning 15 provinces
With the expertise to provide utilities like energy, water and wastewater treatment
which will be in demand due to China's growth, we are optimistic on the long-term
prospects of China as a key market for the group
Moreover, SCI has expertise on sustainable living with a focus on environmental protection, which should be in demand in China due to the country's environmental problems
Meanwhille, both plants are targeted for completion in 1Q15, and have no impact on our FY13 and FY14 earnings forecasts
Maintain BUY with S$6.48 fair value estimate

DBS VICKERS Securities says...

GOODPACK LTD | BUY | TP: S$2.00

Goodpack has demonstrated much resilience in both earnings and share price performance
During GFC, Goodpack's revenue for CY09 eased off by just 2.9% y-o-y, despite the c.9% drop in overall rubber tyre consumption volumes
This is attributable to its synthetic rubber (SR) market share gain and long term relationship with blue-chip customers
During the CY10 recovery, Goodpack showcased its ability to fully capitilise on the upswing, as revenues grew by 28.4% - nearly twice the growth in volumes for rubber consumption in the tyre sector
The short and long term beta of Goodpack's share price is less than 1x at 0.6-0.7x, which suggests that it is less volatile than market, partly because Goodpack's shares are tightly held
Goodpack's earnings growth has been rather muted in the past two years, growing at mid-to-high single digits due to challenging operating environment
We believe the tide is changing for Goodpack and project a 2-year CAGR of 17% in FY13-15F, driven by market share gain in SR segment and cost-saving initiatives
This is augmented by the recovery in US/Europe (45% of Goodpack's revenue) and bottoming out of the rubber industry, which is expected to grow at 2-6% in the same period
The crytalisation of an autopart contract from a major OEM in Europe will prompt us to further re-rate
Besides, Goodpack should not be affected by any potential rate hikes as c.90% of its debts are fixed rate
Goodpack is trading at -1SD, and near the replacement cost of its IBC fleet, which is not a fair reflection of Goodpack's market leadership, global logistic network, strong customer base and growth prospects
Our DCF-based S$2.00 TP translates to 15.4x FY14F PE and 2.3x P/BV, in line with historical mean
Goodpack also offers 3-4% dividend yields based on al 45% dividend payout ratio
Reiterate BUY on Goodpack with a potential total return of 24%