Money Talk: GLP, Golden Agri, Giken Sakata

SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.

1. Global Logistic Properties

Broker: CIMB

Global Logistic Properties' second quarter results were impacted by one-off items and higher minorities. Excluding exceptional item, the first half net profit was within expectations at 36 per cent of our previous forecast for the 2015 financial year.

China is continuing to lead revenue growth amid higher rents and ramp-up of leasing activities and higher fee income.

Looking ahead, the group is on track to enjoy earnings and net asset value expansion as development starts and completions accelerate over the next two financial years.

We adjust our 2015 financial year forecast by 16 per cent to factor in the one-offs and maintain our "add" call with an unchanged target price of $3.29.

2. Golden Agri-Resources

Broker: OCBC

Golden Agri-Resources is due to release its third quarter results on Nov 12, when eyes will be on its China operations, which may continue to bleed red ink owing to the negative crush margins there.

Previously, management mentioned during its second quarter results briefing that it is "actively looking for solutions", which involves strategic sourcing opportunities and the possibility of temporarily shutting down the plant to reduce the losses.

Another closely-watched item will be its inventory - Golden Agri had also previously held higher-than-usual amount of crude palm oil stock that it took a while to clear. Until then, we maintain our "hold" call and 48 cents fair value.

3. Giken Sakata

Broker: OSK-DMG

We initiate coverage on Giken Sakata with a "buy" call and a 65 cents target price with a 124 per cent potential upside.

Giken transformed itself into an Indonesian onshore oil company with the 51 per cent acquisition of CSE and is focused on the old wells programme.

We see production surging to 6,300 barrels of oil per day (bopd)/14,400 bopd in financial years 2015 and 2016 from about 900 bopd at present.

Giken's market capitalisation prices in only two existing fields, with three new fields not valued yet.

CSE was already profitable in the first quarter, producing about 300bopd. With a strong production profile, we expect earnings and

cash flows to surge. Giken is effectively trading at three times the price-to-earnings ratio of the 2015 financial year. If management pays out 20 per cent of earnings, the yield would be 5.8 per cent and 15.5 per cent for the 2015 and 2016 financial years respectively.