SUPER GRP – Initiation by BofAML 23 Oct 13

New Intitiation in SG : Super Group (SUPER SP) – a rising coffee player in ASEAN with BUY, PO $5, 20% upside.

1) strong 20% EPS CAGR in 2012-15, led by growing 3-in-1 instant coffee,
2) China’ instant coffee mkt size is worth S$1.5b & per capita consumption is v low at just 5 cups pa vs 350-400 cups in asean. Made its foray into China in Aug13, initial response +ve, factoring in just 1% mkt sh in next 3 yrs.
3) margin expansion on improved product mix, expanding sale of speciality coffee where margins are 40-45% vs 35-40% for traditional coffee.

Stk is trading at 25x FY13/21x FY14 PE, we pegged it to 25x, in line w/ regional peers. BUY, PO $5.00.


Moody’s Changes Outlook On Germany’s Banking System To Stable

Moody’s Changes Outlook On Germany’s Banking System To Stable From Negative

Frankfurt am Main, September 06, 2013 — The outlook for
Germany’s banking system, which has been negative since April
2008, has today been changed to stable, says Moody’s Investors Service in a report published today. The outlook change reflects
that, following a year of reduced crisis-related losses and
improved capital strength, German banks are now more able to
withstand shocks.

ThaiBev – Profit taking on FNN news (potentially -ve)


THBEV +23% although -25% in past 8-days; Combo of Short Covering & Retail Buying after FNN was on Trading Halt; Mkt was expecting clarity over FNN Property & F&B spin-off but in fact turned out to be related to a Myanmar brewery dispute; FNN spin-off is a +VE for THBEV given F&B synergies; Note THBEV hammered y’day on talk of a possible alcohol tax in Thai; 97% of THBEV NP comes from alcohol which is mainly from spirits (costs easily passed to consumer) whilst beer biz is loss making


Business Times reported FRASER and Neave’s (F&N) joint venture partner in Myanmar Brewery Ltd (MBL) is trying to oust the conglomerate from the partners’ promising beer-making business, F&N said yesterday.

Myanma Economic Holdings Ltd (MEHL), which holds 45 per cent of Myanmar Brewery, has informed F&N that it plans to begin arbitration proceedings to claim F&N’s 55 per cent stake in the brewery, based on Myanma Economic’s reading of the joint venture agreement.

Comments :
** this potentially can be very negative for FNN’s F&B biz as Myanmar Brewery contributed 72% of FNN’s berverage earnings…. which in turn may impact how THBEV will look at its structure and synergy with FNN in the future.

(BMP) Moody’s: ThaiBev to benefit from Fraser & Neave spin-off p lan

Moody’s: ThaiBev to benefit from Fraser & Neave spin-off plan
2013-08-29 04:41:04.588 GMT

Hong Kong, August 29, 2013 — Moody’s Investors Service says that Thai Beverage Public Company Ltd’s (Baa3, stable) credit profile will benefit from Fraser & Neave’s (F&N, unrated) proposal to spin off its property business.

F&N — which is 28.61% owned by ThaiBev and 61.67% by TCC Assets — will separate its real estate division from its core food & beverage business through a listing in November or December 2013.

Moody’s believes the spin-off will facilitate moves by ThaiBev to better leverage revenue and cost synergies with F&N’s food & beverage business, while the latter — in the absence of its property business — can better focus on expanding.

Moody’s further believes that the proposed spin-off shows that TCC Assets seeks to more closely integrate, where possible, the operations of ThaiBev and F&N.

“We believe the latest development shows that ThaiBev and TCC Assets seek to maximize synergies between ThaiBev and F&N’s core businesses, including leveraging each other’s regional distributional networks, product development capabilities, and portfolio of leading beverage brands ,” says Annalisa DiChiara, a Moody’s Vice President and Senior Analyst.

“Given that TCC Assets has notified F&N that it will vote in favor of the spin-off and in view of senior management restructuring at F&N for the purposes of a more dedicated focus on growing the food & beverage business, we expect TCC Assets to continue supporting additional restructuring to most efficiently integrate the two companies’ food & beverage businesses. This may even include their full consolidation over time,” adds DiChiara.

“Previously, we raised concerns over the lack of clarity in regard to shareholder intentions. But now we see that the aim is to better align ThaiBev and F&N in their growth strategies and business opportunities.
And while we cannot at this stage quantify the benefits, we believe that ThaiBev will strengthen its competitive and financial positions over time”, adds DiChiara.

Assuming all regulatory and shareholder approvals are obtained, the listing of F&N’s property unit, Frasers Centrepoint Limited (FCL, unrated), will be achieved via a dividend in-specie distribution of FCL shares to F&N shareholders. As a result, ThaiBev will receive, at no cost, two FCL shares for every one F&N share it owns.

After the completion of the proposed transaction, F&N will no longer have any interest in FCL, leaving the Asian conglomerate with its food and beverage business (84% of sales) and printing and publishing businesses (16% of sales).

F&N and FCL will trade separately on the Singapore Exchange upon the listing of FCL.

Further, on August 28, ThaiBev also announced the appointment of a financial advisor to conduct a strategic review to consider various options, including the viability of retaining or exchanging its interests in the F&N group and other possible ownership structures.

The principal methodology used in this rating was the Global Alcoholic Beverage Rating Methodology published in September 2009. Please see the Credit Policy page on for a copy of this methodology.

Thai Beverage Public Company Ltd is the leading beverages producer in Thailand. It operates four business lines: spirits, beer, non-alcoholic beverages and food. ThaiBev was listed on the Singapore Exchange in 2006.

Annalisa Di Chiara
Vice President – Senior Analyst
Corporate Finance Group
Moody’s Investors Service Hong Kong Ltd.

Asia macro – Time for a ‘reality check’ by Standchart

• Talk of Asia being in a 1997-98-style crisis dramatically overstates the risks

• Fundamental indicators actually suggest a pick-up, not a slowdown in H2-2013 growth

• India’s external situation is not as precarious as it was in 1991

• AXJ currencies to fall further near-term, but to recover in Q4 when China stabilises Summary Talk of recent market declines being reminiscent of the 1997-98 Asian crisis is, in our view, very overdone. The implication of such thinking is that Asian economies could be heading for a collapse and outright recessions. We absolutely disagree with such a view. In fact, we think that emerging market (EM) economies in general and Asia ex-Japan (AXJ) in particular are likely to see moderately faster growth in H2 this year compared with H1, helped by better growth in the US and some stabilisation in Europe. The fundamental differences between now and 1997-98 are significant on any metric, most notably the current-account (C/A) balance, short-term external debt and foreign-exchange reserves. We expect the AXJ region to remain a growth outperformer in most scenarios other than a huge downturn in the global economy.

Recent market moves are not unique and small relative to the Asian crisis. The India rupee (INR), which is down 17.2% against the US dollar (USD) since April, has made three similar moves in recent years: 2008 (April-December: 17.5%), 2011 (August-December: 16.9%) and 2012 (March-June: 11.5%). However, the market was distracted then by the US (2008-09) and euro-area (2011 and 2012) crises. With European tensions abating, the assumption is that EMs are in crisis – for lack of something else to focus on; Fed QE tapering expectations do not seem to be a dramatic enough reason. We view calls that AXJ is hugely over-indebted as exaggerated. As our SCout, 1 July 2013, ‘Asia leverage uncovered’ showed, there are pockets of concern in some countries, but overall debt levels are manageable. In fact, there is room to boost household leverage in China, India and Indonesia.

FNN sp – said to plan splitting property operations from beverages

Aug. 27 (Bloomberg) — Co. plans to separate its property business from operations including beverages and publishing, said two people with knowledge of the matter.

• F&N would split into two separate listed entities under the plan, said the people, who asked not to be identified before an announcement expected today • An F&N official declined to comment • NOTE: F&N said in June it is considering a property business spinoff to increase value: FIFW NSN MP57GY6K50XS Co. said earlier today it plans to hold a media briefing at 4 p.m. in Singapore to announce “an important corporate development.”

(BN) China Minzhong Falls by Most on Record After Short Seller Report

China Minzhong Falls by Most on Record After Short Seller Report
2013-08-26 04:45:01.966 GMT

By Jonathan Burgos
Aug. 26 (Bloomberg) — China Minzhong Food Corp. slumped by the most on record after short-seller Glaucus Research Group accused the vegetable producer of “significantly deceiving”
regulators and investors about the scale of its business.
Minzhong shares were halted in Singapore at 53 Singapore cents, down 48 percent, after tumbling as much as 51 percent, the most since the company’s listing in April 2010. Short interest in Minzhong, which has become the latest target of Glaucus, rose to a record 7.2 percent of the outstanding stock on Aug. 19 from this year’s low of 3.8 percent in March, according to the most recent data from research company Markit Group Ltd.
“Publicly available filings indicate that Minzhong fabricated sales figures to its top two customers,” according to the report from Glaucus today. “Corporate registry records show that a Taiwan-based food distributor, which was supposedly Minzhong’s largest customer in the pre-IPO track record period between 2007 and 2009, was only incorporated in November 2009, suggesting, in our view, that Minzhong simply fabricated the sales figures in its prospectus.”
“The company is consulting its legal team and will comment on the report as soon as possible,” Travis Seet, a Minzhong spokesman at the company’s Putian headquarters in China’s Fujian province, said by telephone.
China Metal Recycling Holdings Ltd. and China Medical Technologies Inc. have each separately been the focus of reports by Glaucus, which claims to “help investors navigate treacherous financial waters in search of great investment opportunities,” according to a statement on the home page of its website. Liquidators were appointed to China Metal in July and China Medical filed for Chapter 15 foreign-firm bankruptcy protection in New York last year.
Six of the seven analysts covering Minzhong recommend investors buy the stock, while one rates the stock a hold, Bloomberg data show.

Click here for the full report by Glaucusresearch: FULL REPORT