Maybank Kim Eng initiated coverage of Yeo Hiap Seng Ltd
with a 'buy' rating and a target price of S$2.25, on expectations of improving profitability and its exposure to the attractive food and beverage sector.
By 0201 GMT, Yeo Hiap Seng shares were unchanged at S$1.96, but have surged nearly 69 percent since the start of the year.
After restructuring, property developer Far East Organisation will emerge as a major shareholder of Yeo Hiap Seng, with a 66 percent stake in the company, Maybank said, adding that Yeo Hiap Seng is also planning to privatise its 61 percent owned unit Yeo Hiap Seng (Malaysia) Berhad , which will give it a larger share of profit from Malaysia.
Maybank said higher expected margins for Yeo Hiap Seng will also drive future profit growth, and its huge landbank, especially in Malaysia where it owns over 2 million square metres of land, is worth at least S$250 million.
Yeo Hiap Seng also has an agreement with PepsiCo Inc , giving it the right of first refusal to buy the company, who is its distributor and manufacturer in Singapore, Maybank said.
1003 (0203 GMT) (Reporting by Charmian Kok in Singapore; email@example.com)(Editing by G. Ram Mohan) ************************************************************
9:39 STOCKS NEWS SINGAPORE-Golden Agri falls on tumbling palm oil futures
Singapore-listed Golden Agri-Resources dropped as much as 3.8 percent after Malaysian palm oil futures plunged to their lowest in more than three years on Tuesday.
By 0117 GMT, shares of palm oil firm Golden Agri were down 2.3 percent at S$0.64 with 42.3 million shares traded, making it the most actively traded stock.
Smaller rival Indofood Agri Resources Ltd also lost 3.4 percent at S$1.30, with 2.8 million shares traded, equivalent to its full-day average volume over the last five sessions.
Malaysian palm oil futures dived to their lowest in more than three years on Tuesday, hurt by slowing demand from Asia and a drop in the edible oil's appeal as a substitute for soy oil, with the U.S. soybean harvest progressing at a record pace.
CIMB Research said recent export figures and its channel checks on last month's crude palm oil (CPO) harvest suggest that stocks could have risen to a higher-than-expected 2.5-2.6 million tonnes as of the end of September.
"We believe there is sufficient storage capacity but the concern is that buyers may defer purchases," said CIMB. However, it expects CPO price to rebound by the end of the year due to its attractive pricing relative to soybean oil, and has a 'trading buy' rating on the sector.
Its top picks are Sime Darby Bhd , Indofood Agri and Astra Agro Lestari .
0925 (0125 GMT) (Reporting by Charmian Kok in Singapore; firstname.lastname@example.org); Editing by Jijo Jacob)
Keywords: MARKETS SINGAPORE STOCKSNEWS/YEOHIAPSENG