Daily Morning Note – 1 March 2019


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Shares in Asia were set to see opening gains on Friday after a data release overnight showed strong fourth quarter economic growth in the U.S.

Stocks slipped on Thursday as stronger-than-expected economic data were offset by fruitless talks between President Donald Trump and North Korean leader Kim Jong Un.

Source: CNBC


CNMC Goldmine Holdings Limited – A production turnaround

Recommendation: BUY, Last Closing Price: S$0.225

Target Price: S$0.31, Analyst: Chen Guangzhi

– CIL plant should support our FY19e production growth of 18%.

– Both production and revenue reached a record high in FY18.

– The performance will be better in FY19 because the CIL plant will deliver a full year
production amid a bullish outlook of the gold price.

Asian Pay Television Trust – Sustainable dividends

Recommendation: Accumulate (Maintained), Last Close Price: S$0.130

Target Price: S$0.140, Analyst: Paul Chew

– Revenue and EBITDA were within expectations. PATMI was below due to the amortisation of
deferred arrangement fees

– Number of cable TV subscribers churning out in 4Q18 more than tripled on QoQ basis to

– DPU of 1.2 cents in FY19e/20e will be sustainable and without further leverage

– Despite the attractive yield of 9%, there are 2 operational challenges ahead:
– Core cable TV business still sliding as both ARPU and subscribers are declining QoQ. There is a
lack of visibility of a trough; (ii) While broadband enjoys positive subscriber momentum,
revenues are virtually flat due to the large cut in ARPU. We cut our target price to S$0.14
(previously S$0.17). Taiwanese telecommunication peers are valued at a dividend yield of
around 5% and EV/EBITDA of 11x. We are placing a 10 to 40% discount to these valuations
due to the higher gearing at APTT.

US Strategy: 4Q18 Quarterly Earnings Report

Analyst: Edmund Xue

– 69% of Top 100 U.S. stocks beat earnings expectations

– Sectors that exceeded earnings expectations the most were energy, consumer discretionary,
and healthcare. The worst were consumer staples, financials and utilities.

– Revenue growth is declining for most of the sectors except communication services,
consumer staples, industrials and utilities.

– Cyclical sectors remain cheap, while defensive plays appear expensive.


Net fair-valuation gains helped lift net profit for worker and student accommodation provider Centurion Corp for its fiscal fourth quarter ended Dec 31, which jumped to S$53.1 million from the year-ago period’s S$5.8 million

Fragrance Group’s net profit for its fiscal 2018 ended Dec 31 more than quintupled to S$266 million from S$48.5 million in the previous year. For the 12 months ended Dec 31, revenue jumped 64.7 per cent to S$326.2 million from the previous year, from its sale of 555 Collins Street in Melbourne. Fragrance had completed the sale for A$140 million (S$134.7 million) last year.

Rubber chemicals producer China Sunsine Chemical Holdings’ fourth-quarter net profit dropped 17.7 per cent to 108.6 million yuan (S$21.9 million) from the preceding year. For the three months ended Dec 31, revenue fell 11.8 per cent to 770.1 million yuan from the year-ago period, on the back of a fall in overall average selling price. Earnings per share slid to 22.11 RMB cents from 26.85 RMB cents in the previous year.b Dividend per share jumped to S$0.055 from S$0.025 in the previous year. For the year, net profit rose 88 per cent to 641.3 million yuan.

Singtel shares fell in early trade on news of associate Bharti Airtel will be undergoing a capital raising exercise.

FY18 net profit for supermarket and convenience store retailer Dairy Farm International Holdings increased 5.2 per cent to US$424 million from the preceding year, the group said in a Singapore Exchange filing on Thursday.

Falling rubber prices and a decline in global macroeconomic sentiment dampened results for rubber supplier Halcyon Agri Corporation in its fourth quarter ended Dec 31. It sank into the red, chalking up a net loss of US$7.4 million, compared with a net profit of US$11.4 million in the previous year, the group said in a Singapore Exchange filing on Thursday.

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