Daily Morning Note – 07 May 2018


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Chip Eng Seng – Continued momentum in residential inventory sales
Recommendation: Buy (Maintained), Last Close Price: S$0.93
Target Price: S$1.21, Analyst: Tan Dehong
– Revenue and earnings within our expectations.
– Continued momentum in residential inventory sales; Grandeur Park 95% sold in
about 1 year.
– Improved occupancy at Park Hotel Alexandra. Stable occupancy rates expected for
hospitality assets.
– Increase in administrative costs outpacing revenue.
– Delay in South Melbourne residential project launch again.
– Maintain Buy with unchanged STOP-derived TP of S$1.21 (40% discount to RNAV).

Nam Lee Pressed Metal Industries – Strong revenue growth eroded by margin

Recommendation: Buy (Maintain), Last Close Price: $0.37
Target Price: $0.56 (unchanged), Analyst: Richard Leow
– 1H18 revenue and PATMI met 56% and 46% respectively, of our full year estimate
– Aluminium industrial product continues to drive revenue, but PATMI eroded by
foreign exchange, derivatives and higher tax rate
– Maintain Buy; unchanged target price of $0.56

Technical Analysis: Technical Pulse – The Phillip 20 Portfolio – April Monthly Review
Analyst: Jeremy Ng
– New Entries: Genting Sing, JB Foods, Hi-P, Sembcorp Ind and Allied Tech
– Stop loss: KrisEnergy, Genting Sing, Sunright, Micro-Mechanics and Hi-P
– Total return since May 17 to April 18 is +2.47%
– STI currently in a correction phase as the 3611 resistance area capped the bullish

Singapore Coal Monthly – Expecting a healthy price correction
Recommendation: BUY, Analyst: Chen Guangzhi
– China re-imposed a new round of restriction on coal imports
– Indonesian coal miners reported health average selling price (ASP) in 1Q18
– The restriction is to maintain the domestic coal miners’ market share
– Implying less intervention by authorities on behalf of these utilities


Straits Times Index – Weekly timeframe – Bearish
– With the current bearish price action rejection off the 3611 resistance area and a
RSI bearish divergence, expect the STI to head into a correction next to test the
3500 psychological round number followed by 3430.

For more information and additional disclosures, refer to the link here.


Nonfarm payrolls increased by 164,000 in April, vs 192,000 jobs expected

US-China trade talk send with strong demands, but few signs of a deal.

Asian shares trade mixed after strong gains on Wall Street. Asian stocks were mixed in early morning trade, with Japan under slight pressure. The U.S. economy added 164,000 jobs last month, missing expectations, but unemployment fell to an 18-year low.

OCBC‘s Q1 profit up 29% to S$1.11b; allowances dwindle on better-performing offshore sectorSpackman to seek Catalist listing for combined entity of 2 subsidiaries, Novus Mediacorp and Frame Pictures.

PACC Offshore seeks compensation from Mexico for vessel investments, the company has filed a notice of arbitration against Mexico under the bilateral investment treaty between the United Mexican States and Singapore governments on the promotion and reciprocal protection of investments.

Source: Bloomberg, Channel NewsAsia, The Business Times, SGX Masnet, Reuters, PSR

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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