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16-Dec-2019 • Expect Singapore economy to surprise on the upside – recovery in global economy and domestic macro better than expected. • Three other themes for 2020 are trade ceasefire, risk from binary political events and less momentum for interest sensitive stocks. • STI target of 3700 driven by growth surprise and potential re-rating catalyst. Singapore Phillip Research Team
03-Dec-2019 • Singapore loans growth stabilised at 2.6% YoY in October • Consumer loans contracted for the seventh consecutive month (-1.2% YoY), dragged by weakness in housing loans (-1.4% YoY) • 3M SIBOR down 4bps MoM to 1.769%, while 3M SOR rose 2bps to 1.537% • CASA growth continued its recovery to 1.4% YoY after contracting in the 1H19; while FD kept up its strong momentum at 19.7% YoY • Maintain the Singapore Banking Sector at Overweight. The banks are offering dividend yield of around 5.0% and well capitalised. Singapore Tin Min Ying
02-Dec-2019 • Deleveraging on track - CAPL achieved their 2019 divestment target of S$3bn, which is aimed at helping the group lower post-ASB acquisition gearing of 0.73x to 0.64x by end-2020 • Value-driven business model - investment decisions guided by their Business Strategy of Scale, Focus, Balance, Agility • Target to achieve double-digit return on equity across cycles via three growth engines Singapore Natalie Ong
27-Nov-2019 - 3Q19 NPI and DPU came in within our forecasts. - The proposed acquisition of Shunde and Tanbei Metro Mall will lift underlying DPU by 4.3%. - We lower our revenue and DPU forecasts to reflect the weakening RMB and retail outlook and incorporate the acquisition of Doumen (completed 12 September 2019), Shunde and Tanbei (TBC 1Q20) Metro Malls. - Maintain ACCUMULATE with lower TP of S$0.88 (previously S$0.94). Singapore Phillip Research Team
26-Nov-2019 • Revenue and earnings were below our forecast. Earnings suffered from less fair value gains in associate Frasers Property (FPL) and beer division losses. • Volumes were healthy for spirits and beer but gross margins suffered. More than 100% of 4Q19 PATMI is from the spirits division. • Dividends for the year raised by 23% to Bt0.48 (S$0.021). • Downgrade to REDUCE. We lowered our SOTP-derived TP to S$0.80 as we cut FY20e earnings by 5%. Our margins interest expense estimates have been raised. Outlook for FY20e is dependent on government support for farm income. Earnings from Sabeco will be under pressure from interest expenses and contribution to the group will be minimal Singapore Paul Chew
25-Nov-2019 - FTSE S-REIT index return declined 2.2% MTD and gained 23.0% YTD. Strongest gains were from the Healthcare sector (1.46% MTD) and weakest showing from the Hospitality sector (-3.14% MTD). - Performance in September: Best – Lippo Malls Indonesia Retail - Sector yield spread widened 4bps MoM to 282bps, -0.96 standard deviation (s.d.) over the benchmark 10-year SGS (10YSGS) yield. - 3-month SOR fell 6bps to 1.51% at 15 November 2019 versus 1.57% last month. Elevated P/NAVs expected to persist in the lower interest rate environment. - Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Commercial and Hospitality. Singapore Natalie Ong
25-Nov-2019 • SGX underwent a business reorganisation and client organization in 1Q20. • Newly reclassified equities revenue segment which combined both cash equities and equity derivatives, is now the largest revenue contributor at 71%. • Efforts will be put into the FICC and DCI business units to double in size in the next 5 years. • FTSE China A50 Index Futures remain the main driver of SGX’s volume, accounting for 37% of total trading volume in 1Q20 (Oct’19: 34%). • HKEX’s launch of MSCI China A-share futures contract yet to be approved. • Regarding SGX and NSE’s IFSC-SGX Connect in GIFT City no timeline was announced and we await further updates. • October’s total derivatives volume fell 24% YoY. • We downgrade to Neutral at an unchanged TP of S$8.60. We peg our TP to 22x P/E, 1 SD below SGX’s 5-year mean. The downgrade is due to share price movement. Singapore Tin Min Ying
20-Nov-2019 • Revenue and PATMI were below our expectations. • Revenue growth of 1.1% YoY was due to the bus acquisitions in Australia and the UK. • Railway margins depressed by higher operating and maintenance costs for rail operations and increasing DTL fixed charges by LTA. • Competitive pressures remain for the taxi business despite stabilising fleet size. • Maintain ACCUMULATE with a lower target price of S$2.56 (previous target price: $2.99). Our PATMI for FY19e is lowered by 2.3%. • Maintain ACCUMULATE with a lower target price of $5.36 (prev. S$5.47). Our PATMI for FY19e is cut by 2.4%. Singapore Edmund Xue
19-Nov-2019 • 2QFY20 revenue beat our expectations, while PATMI fell short of expectations due to declining cargo revenue. • Food Solutions and Gateway Services revenue grew 4.5% and 12% YoY, with growth showing in both aviation (+8.1%) and non-aviation (+6.5%) food industries. • New joint venture in Daxing International Airport will expand presence for SATS in China. We estimate it to add $1.5mn to SATS’ bottom line. • Indian revenue remains subdued due to vacant slots left by Jet Airways. • Maintain ACCUMULATE with a lower target price of $5.36 (prev. S$5.47). Our PATMI for FY19e is cut by 2.4%. Singapore Edmund Xue
18-Nov-2019 • 3Q19 results were in-line with our estimates. With the recovery in property transactions, we expect earnings to have bottomed out. • New launches have been driving revenue growth (+16% YoY) whilst private resale remains very weak (-30% YoY). • We expect PropNex to pay attractive dividends (yield of ~7%) in view of the low capital intensity of the business and cash hoard of S$74mn in the balance sheet. • Our BUY recommendation and target price of S$0.59 is maintained. We favour PropNex for their impressive market share (46% in new launches), attractive valuation, high unleveraged ROE (20%), healthy balance sheet and recovering transaction volumes in the Singapore residential market. Singapore Paul Chew
18-Nov-2019 • EBITDA met our estimates while NPAT was hurt by Airtel’s exceptional item. Excluding exceptional item, NPAT would have fallen 15% YoY and within our expectations. Airtel was impacted by an adverse court ruling against the industry’s definition of adjusted gross revenue and recorded a provision of S$5.5bn (Singtel’s pre-tax share is S$1.9 bn). • Stronger performance in regional associates especially for Globe & AIS. Telkomsel returned to sequential quarter growth, Airtel narrowed losses. Enjoyed first YoY PBT growth in 3yrs. • Group enterprise weak due to a challenging business environment and slowdown in Australia. • Maintained ACCUMULATE with a lower TP of S$3.31 (prev. S$3.45). We revised FY20e EBITDA and NPAT downwards by 9%/56% due to the results and change in guidance. Singapore Alvin Chia
18-Nov-2019 • 3Q19 net profit was below our estimates. • Apart from the weaker transaction volumes, net profit in FY19 has been hit negatively by agent license subsidy fee and losses at the newly acquired property. The combined financial impact is negative S$2mn. • We lower our recommendation from BUY to ACCUMULATE. Our target price is reduced to S$0.55 (previously S$0.68). We cut our FY19e and FY20e net profit forecast by 15% and 13% respectively. We expect a recovery in 2020 as property transactions build up momentum, there is also a robust pipeline of new projects. Singapore Paul Chew
12-Nov-2019 • Revenue was in line, but EBITDA was marginally below our estimates. Expenses such as content and staff cost were higher than modelled. • Broadband reported record net additions of 9,000 subscribers in 3Q19. But revenue was still down 5% due to weaker ARPU . • Falling revenue is still the biggest challenge. We estimate revenues will fall S$9mn in FY20e (FY19e down S$25mn). The annual dividend pay-out of S$17.4mn per annum is well funded by adjusted FCF of $46m. Nevertheless, it will be challenging for the stock to outperform until investors get some visibility of revenue stabilising. We believe the roll-out of data back-haul services for 5G in 2021 will be the opportunity for revenue to stabilise or even grow. We peg APTT at around 9.5x EV/EBITDA. This is a 20% discount (prev. 15%) to their much larger Taiwanese peer valuations. We maintain NEUTRAL and keep our target price unchanged at S$0.165. Singapore Paul Chew
12-Nov-2019 • 3Q19 revenue and PATMI exceeded our estimates by 4% and 7% respectively. • NII supported by 4bps YoY NIM expansion to 1.90% as loans were repriced with higher interest rates in Singapore and Hong Kong. Loans growth softer at 4% YoY. • Fee income at a record high of $814mn. Strong trading income growth of 22% to $431mn due to higher gains in interest rate activities. • CIR% well contained, improving 2p.p. from a year ago to 42%. • Declared a quarterly dividend of 30 cents per share. We forecast 2019 dividend of $1.20/share. • Maintain ACCUMULATE at a lower target price of S$27.30 (previous TP: S$27.60). Our TP is based on target price-to-book of 1.4x, derived from the Gordon Growth model (long term ROE assumption: 12.4%, COE: 9.3% (Beta: 1.2x), Growth: 2.0%). Singapore Tin Min Ying
11-Nov-2019 • 3Q19 NPI and DPU were in line with our forecast. • High income visibility due to portfolio occupancy of 99.2% and WALE of 4.6 years • DPU down 5.2% YoY; accretion from Fuzhou E-commerce wiped out due to FX and timing lag between drawdown of loans and acquisition. • Maintain BUY with a lower TP of S$0.84. We lower our profit forecast due to the weakening of RMB against SGD. Singapore Phillip Research Team
11-Nov-2019 • Revenue met expectations while NPAT disappointed by 6.5%. • VMS is gaining more customers and projects, partially due to the shift in supply chain to SEA • Net margin declined to 9.8% from 10.5% a year ago from pricing pressure we expect it to continue in the near-term. • Downgrade to ACCUMULATE with a lower TP of S$17.18 (prev. S$17.68). We revised our FY19e revenue upwards by 2.5% and lowered NPAT by 2.8%. We are still positive on VMS for the attractive yield and rising profit share amongst its U.S. peers. Singapore Alvin Chia
08-Nov-2019 • Earnings and revenue was a beat. We raise our FY19e/20e earnings by ~10%. • The YoY comparables will look exaggerated due to seasonally weak quarter last year. The rolling 4-quarter (or annual) earnings run-rate is a healthy S$21mn. • Record net cash position of S$53.1mn and other balance sheet metrics suggest another healthy quarter ahead. • We are raising our target price to S$0.93 (5x PE excluding net cash) as we roll over our target price to FY20e net earnings. Our BUY recommendation is maintained. Singapore Paul Chew
06-Nov-2019 • 3Q19 revenue/PATMI were within our expectations. However, if not for the lower tax rate of 10% for this quarter, earnings would have fallen short of our expectations. • NII supported by 5bps YoY NIM expansion to 1.77% and 2% YoY loans growth. • Fees income rose 10% YoY to S$550mn, OCBC’s highest on record. • Insurance income fell 9% YoY due to fair value movements as a result of lower interest rates used to value insurance contract liabilities. • Allowances ballooned six times to S$323mn mainly due to ECL refinement for OCBC NISP, provisioning for two corporate accounts and ECL adjustment to account for MEV in the ECL model • NPL ratio rose to 1.6% mainly due to two corporate accounts (3Q18: 1.4%). • We maintain ACCUMULATE at a lower target price of S$11.70 (previously S$12.50). We roll forward our Gordon growth model to FY20 to arrive at our new TP of S$11.70. Singapore Tin Min Ying
06-Nov-2019 • Revenue and NPAT met expectations. Excluding S$9mn one-off tunnel income from TPG, NPAT would have missed our estimates by 3%. • Mobile segment relatively resilient considering competition and substantial churn from single enterprise customer. • Enterprise revenue grew 16% YoY boosted by cyber-security which spiked 135% YoY. • Expect pay-tv business to stabilise in FY20e due to steadier subscriber base. • Maintained ACCUMULATE with an unchanged TP S$1.58. No changes to our estimates. Singapore Alvin Chia
05-Nov-2019 • Singapore’s loans growth for September was tepid but stable at 2.1% YoY. • Consumer loans contracted for the sixth consecutive month (-1.2% YoY), dragged by weakness in housing loans (-1.3% YoY). • 3M SIBOR down 7bps to 1.806%, while 3M SOR plunged 17bps to 1.515%. • CASA growth recovered to 0.9% YoY after almost a year of contraction; while FD kept up its strong momentum at 20.3% YoY. • In 1Q20 (Jul – Sep), DDAV grew 12% YoY and SDAV growth recovered to -1% YoY as compared to quarterly average contraction of -16% YoY in FY19. • Maintain the Singapore Banking Sector at Overweight. The banks are offering dividend yield of 4.6% to 5.0%, well capitalised and enjoying 5-9% earnings growth. Singapore Tin Min Ying
04-Nov-2019 • 1Q20 revenue and PATMI were behind our expectations. Lack of revenue growth hurt earnings despite a 4% YoY decline in operating expenses. • A positive was the QoQ improvement in revenue and margins. • No change to our FY20e earnings despite the results below expectations. We are still expecting a recovery in 2H20. Semiconductor indicators point to a tentative recovery in volumes. We maintain our target price at S$1.60. Following the recent rally in share price, we are downgrading our recommendation to REDUCE. Singapore Paul Chew
04-Nov-2019 • 3Q19’s Revenue and PATMI were in line with our estimates. • 3Q19’s PATMI plunged 16.9% YoY due to gestation costs from RafflesHospital Chongqing. Excluding China, net earnings would have risen by 4.8% YoY. • RafflesHospital Chongqing’s 3Q EBITDA loss of $2.6mn was within expectations. • We keep our NEUTRAL recommendation with a lower TP of S$1.05 (previous TP S$1.09). Earnings will be under pressure from the gestations costs for RafflesHospital Chongqing in 2019 and RafflesHospital Shanghai in 2020. Singapore Tin Min Ying
04-Nov-2019 • Results were within expectations, residential fibre connections rose 13.7 YoY • NBAP and segment connections increased by 4.3% and 9.4% QoQ respectively • NLT is supporting M1 and TPG Telecom on their 5G trials in Marina Square and Singapore Science Park I and II • Maintained ACCUMULATE with a higher TP of S$0.99. We adjusted our WACC downwards to 5.9% to reflect the lower interest rate environment. Singapore Alvin Chia
04-Nov-2019 • 3Q19 revenue and PATMI were in line with our estimates. • NIM fell 4bps YoY and QoQ to 1.77% due to declining interest rates and competitive pricing environment. NIM expected to contract 5-10bps in FY20. • Loans growth remained strong at 8% YoY and LDR% healthy at 89% (3Q18: 86%). • Fee income surged 14% YoY due to strong wealth management, credit cards and loan-related fees growth. • Allowances rose 53%, to provide for impaired assets. Overall asset quality stable with NPL ratio healthy at 1.5% (3Q18: 1.6%). • Maintain ACCUMULATE with a lower target price of S$27.80 (previously S$28.60). Lower TP as we reduce FY20e earning by 2.3%. Our FY20e NIM lowered by 4bps to 1.74% and FY20e credits costs increased by 4bps. Singapore Tin Min Ying
01-Nov-2019 • 3Q19 revenue was within our expectations. Net earnings exceeded our estimates due to better gross margins and other income (grants). New stores drove revenue growth of 11% in 3Q19 and gross margins were better than expected due to higher fresh food sales mix. • Sheng Siong (SSG) secured another three new stores in for 4Q19/1Q20. The cumulative six new stores will expand footprint by 8% and support revenue growth in FY20e. • We bumped up our FY19e earnings by 2% due to higher margins and other income. Our ACCUMULATE recommendation is maintained. Together with the rise in FY19e earnings, our target price is raised to S$1.32 (previously S1.30). New stores, market share gains and higher margins are translating to record earnings for SSG despite sluggish consumer spend in Singapore. Singapore Paul Chew
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