CHINA FISHERY GROUP (Lim&Tan)

S$1.45-CFG.SI

• The company announced this morning that in light of the prevailing market conditions, plans for its proposed dual listing on the Hong Kong Stock Exchange would be delayed.

• The Board would review the matter before the end of the year and would make further announcements to update shareholders.

• While not positive, fortunately, when the company first made known its dual listing plan on 17 Dec’2010, its share price was $2.16, and have since declined 33% and is retesting its June 2011 and Jan 2010 lows.

• The very weak share price performance was attributable to its key fishing grounds being located not too far away from the Japanese earthquake zone. However, despite management’s reassurances that their operations, its share price continues to remain weak (remaining in an entrenched downtrend channel established since Jan 2011).

• The stock is also down from the $1.85 level that The Carlyle Group purchased 11.32% of the company at during end June’2010.

FRASER CENTREPOINT (Lim&Tan)

S$1.54-FCT.SI

• The proposed acquisition of Bedok Point (Net Lettable Area of 80,985 sf) from Fraser & Neave for $127 mln is yield accretive based on $7 mln income in the “first lease cycle”.

• Before taking into account debt financing options (combination of debt and issuance of new units), the yield of already 5.5% compares favorably with FCT’s yield of 5.3% based on expected DPU of 8.2 cents for year ending Sept’11.

• Note the June’11 quarter was affected by lower Net Property Income because of the extensive $72 mln refurbishment at Causeway Point, which is FCT’s biggest asset, with NLA of 418,543 sf.

• Refurbishment has caused the occupancy to drop to 69% during the March’11 quarter before rebounding to 78% in the June quarter. By end Sept’11, management expects the level to rise to >90%, hence its confidence in paying no less than 8.2 cents for ye Sept’11 as for the previous year.

• Bedok Point brings to 5 suburban malls in FCT’s portfolio. The next acquisition is expected to be Changi City Point (207,479 sf) and likely to take place in fiscal year ending Sept’12.

• Another attraction of FCT is that a whopping 43.2% of its portfolio is due for rental reversion, and hence likely DPU increase in FY2012.

• We maintain BUY.

Midas Holdings: Lowering estimates on uncertain outlook (DMG)

(BUY, S$0.56, TP S$0.73)

Midas’ share price is down 7% WoW, or -40% YTD, due to a high speed train crash in Wenzhou on 23 July. Following which, the PRC government has ordered a thorough investigation. We believe the accident could result in slower order wins from both domestic and overseas markets. Although Midas’ 32.5% associate NPRT has recently won RMB3.1b worth of contracts, we believe more extrusion orders are needed to sustain Midas’ growth momentum and the high valuation premium that it used to command. We now assume lower FY11 and FY12 extrusion order wins of RMB700m and RMB750m with longer delivery time, and smaller NPRT’s contribution of RMB57m. As a result, our FY11 and FY12 net profit estimates are revised down by 9% and 29% to RMB298m and RMB282m respectively. Also, we peg a lower target multiple of 15x FY11F P/E (old: 18x), or -0.5SD to its historical mean of 20x to reflect an uncertain outlook. Nonetheless, at historical trough valuation of 1.2x P/B, we deem downside risks to be limited. Maintain BUY with a lower TP of S$0.73 (old: S$0.98).

Changes to order win assumption. We now assume FY11 and FY12 extrusion order wins of RMB700m and RMB750m, with delivery over a two year period (old: RMB700m and RMB850m with delivery over a one year period). Hence, the corresponding revenue estimates are revised down to RMB1.3b and RMB1.2b (old: RMB1.4b and RMB1.8b) respectively. Extrusion order wins tallied RMB228m YTD. Close to 80% and 30% of our FY11 and FY12 estimates for extrusion are backed by announced order wins respectively.

Changes to NPRT assumption. Our assumption for NPRT’s revenue is reduced to RMB3.2b p.a. (old: RMB4.1b p.a.) over the next two years, resulting in lower associate’s contribution of RMB57m and RMB57m (old: RMB73m and RMB74m). NPRT’s order wins tallied RMB3.1b YTD. Close to 85% and 92% of our FY11 and FY12 estimates for NPRT are backed by announced order wins respectively.