STOCKS NEWS SINGAPORE-Maybank upgrades Super Group to 'buy'

Wed Sep 26, 2012 10:12pm EDT

Maybank Kim Eng upgraded Super Group Ltd to 'buy' from 'hold' and raised its target price to S$2.85 from S$1.95, on expectations of stronger sales growth and increasing mergers and acquisition interest within the food-and-beverage space.

At 0200 GMT, Super Group shares were up 3.5 percent at S$2.08. They have gained 58 percent since the start of the year, compared with the FTSE ST Consumer Goods Index, which has fallen 17 percent.

Maybank expects Super's sales to grow about 12-15 percent on an average per year over the next three years, helped by increasing consumption in Southeast Asian markets and growing appetite for convenience and packaged food.

Super's gross margin for its ingredients business has been improving, and it is also rolling out a rebranding exercise next year, which will help boost sales, Maybank said.

The company is also an attractive M&A target, given its strong position in Southeast Asian markets, Maybank noted, adding that Yeo Hiap Seng's 12 percent stake in Super may be up for sale.

1002 (0202 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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9:37 STOCKS NEWS SINGAPORE-CIMB downgrades K-REIT to 'neutral'

CIMB Research downgraded K-REIT Asia, which owns commercial assets, to 'neutral' from 'outperform', citing limited further upside, but raised its target price to S$1.23 from S$1.21 to reflect the debt-equity funded acquisition of a Perth office development.

Units in K-REIT were flat at S$1.19, and have surged 43.6 percent since the start of the year, compared to the FTSE ST Real Estate Industrial Trust Index's 29.6 percent gains.

K-REIT agreed to buy a 50 percent stake in a new office tower development in Perth, Australia, for A$165 million, which could be accretive but mainly because of funding using cheap Singapore dollar debt, said CIMB.

The brokerage also said it likes the visibility of the long lease with a 3-5 percent annual rental step-up, but the long lease could result in limited upside for K-REIT in a buoyant Perth office market.

However, CIMB downgraded K-REIT due to limited upside in its share price and as equity fundraising needs are likely to limit any value added from a potential acquisition of Marina Bay Financial Centre office tower in Singapore.

0930 (0130 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)