Daily Morning Note – 12 February 2020

WEEKLY MARKET OUTLOOK WEBINAR

PHILLIP SUMMARY

Asian stocks looked set for modest gains Wednesday as investors weighed the spreading coronavirus against expectations for policy support. U.S. equities closed off their highs on reports of fresh antitrust scrutiny for tech firms.

Shares in Australia opened up as investors cheered earnings from the country’s biggest bank. Futures pointed higher in Hong Kong and Japan, which reopens after a holiday. Earlier, the S&P 500 Index pared gains amid reports the Federal Trade Commission is looking into acquisitions by some large technology firms, though still posted a fresh all-time high. Ten-year Treasury yields rose, while the dollar dropped for the first time in five sessions.

BREAKING NEWS

MAINBOARD-LISTED Singtel‘s Thai associate, Advanced Info Service (AIS), has won in arbitration against Thai telco TOT Public Company’s claim for extra roaming revenue share.

CITING the outbreak of a deadly virus that has so far infected 47 people in Singapore, Thai Beverage Public Co (ThaiBev) has cancelled a shareholder meeting that was to have been held on Feb 28, the Mainboard-listed brewer announced on Tuesday.

MAINBOARD-LISTED property group Roxy-Pacific Holdings has taken a 49 per cent stake in a retail building in Tokyo, it disclosed in a bourse filing on Tuesday. Roxy-Pacific made the purchase through an injection of roughly US$10 million in investment company Vivel SG, which paid 5.2 billion yen (S$65.7 million) for the building at 23-10 Udagawa-cho, Shibuya-Ku.

MAINBOARD-LISTED construction and civil engineering contractor Tiong Seng Holdings announced on Tuesday that its subsidiaries have bagged contracts for two private-home projects worth S$123.9 million in all, taking the group’s construction order book to about S$1 billion until 2023.

CONSTRUCTION and property group OKH Global‘s net profit dwindled in the second quarter, as its share of contributions from associates turned negative, according to results on Tuesday. Net profit shrank to S$54,000 for the three months to Dec 31, 2019, down from S$3.99 million in the same period the year before, even as revenue stayed flattish at S$4.2 million.

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

TECHNICAL PULSE

Mapletree Industrial Trust

Recommended Action: Technical BUY

Mapletree Industrial Trust (SGX: ME8U) bullish upside is still strong but the likelihood of a correction is inevitable as suggested by the technical

Read more technical reports

RESEARCH REPORTS

Asian Pay Television Trust – Some stability creeping in

NEUTRAL (Maintained); TP S$0.165, Last close: S$0.167

– 4Q19 revenue and EBITDA were around 5% better than our expectations. Revenue and EBITDA fell 6% and 3% respectively in 4Q19. DPU guidance of 1.2 cents for FY20e is maintained.

– Some signs of stability in operations – cable TV ARPU flat QoQ after 13 quarters of decline and broadband revenue modest rise QoQ

– We were surprised by the stability in certain operational data. Cable TV ARPU finally stopped sliding albeit subscribers are still contracting. Broadband subscribers responded well to the lower prices offered, which helped to keep revenues stable.

– APTT has guided that data backhaul services offered to Taiwanese mobile operators will materialise when 5G services are rolled out. At present, there are limited data points for us to model this market opportunity. Our target price will peg APTT at around 10x EV/EBITDA. This is a 10% discount to their much larger Taiwanese peer valuations. We maintain NEUTRAL and keep our target price unchanged at S$0.165.

Micro-Mechanics (Holdings) Ltd – Signs of recovery, but priced in

REDUCE (Maintained); TP S$1.60, Last close: S$1.88

– 2Q20 revenue and PATMI were within our expectations. Interim dividends increased by 25% to 5 cents per share. MMH pays an attractive yield of 6%.

– Recovery is underway with the first revenue and earnings growth after 5 quarters of decline. FY18’s record revenue was a challenging comparable.

– We have not changed our FY20e earnings forecast. It still implies a 40% YoY jump in 2H20e earnings. The recent closure of the Suzhou plant will be disruptive as China represents 30% of sales. We expect some customers to shift some of their orders to MMH other SE Asian plant. But this event has raised downside risk to our forecast as global growth slows. Our REDUCE recommendation and target price of S$1.60 is unchanged. We benchmark our valuations to 15x PE, semiconductor back-end peer valuations.

Read more research reports

Webinar Of The Week

Market Outlook: (PSR) Singapore Weekly & Technicals

Date: 20 January 2020

For more on Market Outlook

Phillip Research in 3 minutes: #17 – IREIT Global; Initiation

Updates summarised in 3 minutes

For more videos on Phillip in 3 Mins

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





Disclaimer
The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
Confidentiality Note
This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.

 

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you

IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com