Daily Morning Note – 10 May 2018


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Fraser and Neave – Stronger performance; Benefitting from Vinamilk
Recommendation: Buy (Upgraded), Last Close Price: S$2.08
Target Price: S$2.75, Analyst: Soh Lin Sin
– 1H18 Revenue/Core PATMI met 50%/27% of our full year estimates
– Dairies remained the strongest performer; Vinamilk contributed c.S$33mn or 38%
to 1H2018 Group EBIT
– Higher input and packaging costs, and brand investment expenses weighed on
– Declared interim dividend of 1.5 cents per share, unchanged from last year
– Upgraded to BUY but lowered TP to S$2.75 (previously S$2.83) as we trimmed our
FY18e earnings by 29% on rising input costs

Land Transport Sector – Demand from taxi hirers returning
Analyst: Richard Leow
– ComfortDelGro ordering 200 new taxis – its first in 1.5 years
– CCCS investigation into Grab and Uber transaction not completed, and being
overtaken by events as new entrants have already entered the market
– Taxi population contracted at an accelerated pace, while Rental cars population
stabilises as growth moderates
– Maintain Overweight on the Land Transport Sector, and “Buy” rating on
ComfortDelGro Corp with unchanged target price of $2.50.

Walt Disney Co. – Earnings Highlights
Recommendation: Positive , Last done price: USD 101.79
Target price: USD 121.32, Analyst: Ho Kang Wei
– Better than expected earnings
– EPS of USD1.84(+23% YoY) beating consensus estimates by USD0.14
– Revenue of USD14.60bn (+9.4% YoY) beating consensus estimates by USD490mn
– Park and Resorts and Studio Offerings


Memtech Intl Ltd – Daily timeframe – Bullish
– A Bullish Engulfing Bar rejection off the 1.23 support area with increasing volume
was formed on 09/05/18 suggests a rebound higher next.
– Expect price to reverse higher next for price to test the 1.47 resistance area.

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


The Dow Jones Industrial Average DJIA, +0.75% gained 0.8% to 24,544, rising for a fifth straight session. The S&P 500 SPX, +0.97% added 1% to 2,698. The Nasdaq Composite Index COMP, +1.00% rose 1% to 7,340, gaining for a fourth straight session.

Oil Jumps as Supplies Shrink, Trump Seeks Curbs on Iranian Crude. Crude surged past $71 for the first time since 2014 as American stockpiles shrank and the U.S. told crude buyers to curb purchases from Iran.

Mahathir Wins in Historic Malaysia Power Shift. Mahathir, Malaysia’s longest-serving premier who defected to the opposition to take on Najib, will return to power at the age of 92.

Japan, China, South Korea put onunited front on North Korea and free trade at trilateral summit.

FLT raises S$329m in private placement more than 3.9 times subscribed. The placement was part of FLT’s latest round of equity fundraising, with the other part being a pro-rata and non-renounceable one-for-ten preferential offering exercise to existing unitholders, consisting of 152.15 million new units priced between S$0.942 and S$0.967, to be launched on May 23.

UOB partners Santander UK to support clients. UNITED Overseas Bank and Santander UK have teamed up to help companies that intend to do business between South-east Asia and the United Kingdom. The two banks are targeting SMEs with annual revenues of S$20m to S$200m – or £6.5 million and above – to tap industry insights and business connections for expansion.

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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