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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
25-Oct-2019 - 4Q19 and FY19 NPI and DPU in line with our forecast. - Positive rental reversions, higher footfall and increase in FY19 revenue (excluding non-cash accounting adjustments). - Growth catalysts include FCT’s pipeline assets, intensification of Woodlands and Punggol which will benefit CWP and WWP, renewed strength in fringe retail rents and possible acquisition of PGIM’s assets. - Maintain ACCUMULATE with higher TP of S$3.11 (prev. S$2.77). Higher target price due to the addition of the 6.7% stake in Waterway Point and FCT’s increased stake in PGIM. Singapore Natalie Ong
23-Oct-2019 - 3Q19 NPI and DPU in line with our forecast, with 3Q19/9M19 DPU forming 26.4%/76.4% of our DPU forecast. - Higher occupancy and positive portfolio rental reversions, with YTD tenant sales falling less than RSI Ex. MV (-1.3% vs -1.8%1) (Figure 1) - Maintain Neutral with unchanged TP of $2.68. Singapore Natalie Ong
22-Oct-2019 - Specialty pharmaceuticals the major earnings driver, rising from 52% of total revenue in FY15 to 57% in FY18. - High product barriers, brand reputation and product efficacy will enable Hyphens to maintain its premium pricing and product loyalty. - Revenue generated outside of Singapore to increase as Hyphens intensify presence in existing countries and diversify to new geographies. - The stock trades at around 10.2x price to earnings and 1.5x price to book and offers a decent dividend yield of 2.8%. Singapore Tin Min Ying
18-Oct-2019 • Secular growth in aerospace where commercial aircraft orders have a 10-year backlog. • Turnaround to record profits under new management. Earnings in the past 12 months rose 9-fold. • Initiate coverage with a BUY recommendation and target price of S$0.20. Our valuation is based on 10x PE FY19e. This is a discount to global aerospace parts supply chain valuations. We believe the discount will narrow on the back of the future scale and consistent profitability. Singapore Alvin Chia
18-Oct-2019 • FTSE S-REIT index return gained 1.3% MTD and 25.1% YTD. Strongest gains were from the Industrial sector (+3.7% MTD) and weakest showing at the Healthcare (-0.9% MTD). • Performance in September: Best – Keppel DC REIT (+13.5%), Worst – MapleTree North Asia Trust (-7.5%) • Sector yield spread compressed MoM to 245bps, -1.5 standard deviation (s.d.) over the benchmark 10-year SGS (10YSGS) yield. • 3-month SOR fell 40bps to 1.57% at 16 October 2019 versus 1.75% last month. Elevated P/NAVs expected to persist in the lower interest rate environment. • Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and Hospitality. Singapore Natalie Ong
17-Oct-2019 • 3Q19 NPI and DPU were in line with our estimates. 9M DPU formed 74.2% of our FY19 estimates • Portfolio metrics healthy; occupancy crept up 0.7% ppts and while post-acquisition gearing will settle at 30.3% (historical average 30.7%) • Maintain ACCUMULATE with a higher target price of $2.06 (previously $2.00). We raise our estimates by 2% to recflect the tightening DC market which will help provide support for rents Singapore Natalie Ong
11-Oct-2019 · We are expecting low (interest rates) and slow (economic growth) 4Q19. But no recession. · No push factors for a meaningful trade truce but global manufacturing downturn look extended compared to past cycles. · Our Phillip Absolute 10 model portfolio outperformed the STI in 3Q19. New inclusions are Venture Corp and PropNex. Singapore Paul Chew
08-Oct-2019 · Portfolio underpinned by tertiary care hospitals which have better revenue intensity and margins compared to primary and secondary care hospital · Main overhang on the share price remains the renewal of the master lease with LPKR · FIRT’s dividend yield and P/NAV is currently at the +1 standard deviation (s.d.) and -1 s.d. level respectively. Singapore Natalie Ong
23-Sep-2019 -FTSE S-REIT index return gained 0.4% MTD and 21.7% YTD. Strongest gains were from the Commercial sector (+2.8% MTD) and weakest showing at the Retail (1.4% MTD). -Performance in September: Best – Keppel DC REIT (+16.3%), Worst – Soilbuild REIT (-7.6%) -Sector yield spread of 263bps is -1.3 standard deviation (s.d.) over the benchmark 10-year SGS (10YSGS) yield. -3-month SOR was flat at 1.75% at 20 September 2019 versus 1.74% last month. Elevated P/NAVs expected to persist in the lower interest rate environment. -Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and Hospitality. Singapore Natalie Ong
05-Sep-2019 - 1H19 revenue made up 23% of our full-year estimates. - Healthcare system revenue surged 407% YoY due to higher revenue contribution from TMJ (acquired Apr’18) and IGM (acquired May’19). - Medical centre revenue grew 26% YoY as the Group expanded its Philippines, Hong Kong and Malaysia businesses. - Loss attributable to shareholders rose by S$1.3mn QoQ, dampened by a S$1.16mn rise in operating expenses, of which S$1.11mn is non-recurring. - Maintain BUY with a lower TP of S$0.26 (prev TP: S$0.28). The lower target price is due to the increase in number of shares after the recent share placement. We expect higher revenue contribution from the new acquisitions and business expansions to flow into 2H19. We kept of FY19e forecast relatively unchanged. Singapore Phillip Research Team
05-Sep-2019 • Singapore’s loans growth stable at 2.0% YoY. Consumer loans (-0.9% YoY) contracted for the fourth consecutive month, dragged by weakness in housing loans. • Domestic deposits rose 8.0% YoY, held up by sustained the strength in fixed deposits which surged 23.1% YoY. CASA contracted 0.9% YoY while fixed deposits (FD) surged to new decade-high growth rate of 23.1% YoY. • 3M SIBOR finally capitulated and fell 12 bps to 1.879%, while 3M SOR dipped 3 bps to 1.724%. • In August, SDAV and derivatives volumes for SGX was up 3.9% YoY (QTD -1.3%) and around 14.1% YoY (QTD 8.2%) respectively. • Maintain the Singapore Banking Sector at Overweight. The banks are offering dividend yield of 4% to 5%, well capitalised and enjoying 5-9% earnings growth. Singapore Tin Min Ying
02-Sep-2019 Oversea-Chinese Banking Corp Ltd - Creation of Franchise Value in Greater China Recommendation: ACCUMULATE (Maintained), Last Closing Price: S$10.65 Target Price: S$12.32, Analyst: Tin Min Ying Singapore Tin Min Ying
02-Sep-2019 Micro-Mechanics (Holdings) Ltd - Getting paid to wait Recommendation: NEUTRAL (Maintained), Last Done: S$1.60 Target Price: S$1.60 Analyst: Paul Chew Singapore Paul Chew
27-Aug-2019 ARA Asset Management Limited (ARA) is a global integrated real assets fund manager. As at 30 June 2019, Gross Assets Managed by ARA Group and its Associates is more than S$83bn across over 100 cities in 23 countries. (+) Stable income operating model (+) Established stakeholders (-) Depressed interest coverage ratio when including perpetual bond payments (-) Private company, possible re-listing Singapore Timothy Ang
26-Aug-2019 - FTSE S-REIT Index gained +0.4% MTD and +21.7% YTD. Strongest gains from the Healthcare sub-sector (+3.9%) and weakest showing at the Hospitality sub-sector (-2.3%). - Performance in August: Best performer – Keppel-KBS US REIT (+5.7%), Worst performer – Eagle Hospitality Trust (-10.3%). - Sector yield spread of 288bps over the benchmark 10-year SGS (10YSGS) yield was at the -1.3 standard deviation (SD) level. - 3m SOR was flat at 1.75% at 16 August 2019 versus 1.76% at end-July. - Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and Hospitality. Singapore Natalie Ong
22-Aug-2019 (+) Healthy credit profile (+) Properties with high occupancy rates provide stable income Singapore Timothy Ang
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