Daily Morning Note – 14 May 2018
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar today.
In this week’s webinar, we discuss the results for FNN, HMI, OCBC, SCI, CAO, CEWL, 800 Super and CDG. We also share on the Land Transport Sector.
Archived webinars available.
RESEARCH REPORT
China Everbright Water Limited – Long-term beneficiary of PPP reform
Recommendation: BUY (Maintained), Last Done Price: S$0.43
Target Price: S$0.55, Analyst: Chen Guangzhi
– As at Mar-18, CEWL has a portfolio of 95 projects, 77 are operating, 12 under construction and 6 in preparatory stage.
– Ongoing organic growth through tariff hikes and better receivable collections. However, Zhenjiang Sponge City project facing some delays.
– The clean-up of the PPP project initiated by the government had limited impact on CEWL.
ComfortDelGro Corp Ltd – Acquisition spree to bear fruit in 2H 2018
Recommendation: Accumulate (Downgrade), Last Close Price: $2.33
Target Price: $2.49 (previously $2.50), Analyst: Richard Leo
– Revenue was 15% lower than our forecast, as the adoption of SFRS(I) 15 resulted in a change in how revenue and expenses is reported
– Key changes to reporting revenue and expenses are contract services (relates to cashless payments) and taxi drivers’ benefits
– Our revenue forecast would have been an estimated 5% higher than actual, had our forecast was in accordance with SFRS(I) 15
– PATMI was 22% lower than our forecast, due to a combined effect of our aggressive revenue forecast and higher than expected opex
ComfortDelGro Corp Ltd – Acquisition spree to bear fruit in 2H 2018
Recommendation: Accumulate (Downgrade), Last Close Price: $2.33
Target Price: $2.49 (previously $2.50), Analyst: Richard Leo
– Revenue was 15% lower than our forecast, as the adoption of SFRS(I) 15 resulted in a change in how revenue and expenses is reported
– Key changes to reporting revenue and expenses are contract services (relates to cashless payments) and taxi drivers’ benefits
– Our revenue forecast would have been an estimated 5% higher than actual, had our forecast was in accordance with SFRS(I) 15
– Excluding one-off special dividend in 1Q17, recurring PATMI is -8.6% YoY lower
– Some positive one-offs for Bus during the quarter and Taxi outlook has improved
– Downgrade to Accumulate on the back of recent positive share price movement; lower target price of $2.49 (previously $2.50)
800 Super Holdings Ltd – Start-up costs, but projects kicking-in soon
Recommendation: Accumulate,Last Close Price: $1.12
Target Price: $1.30, Analyst: Richard Leow
– 3Q revenue/PATMI were 8%/21% lower than expected; opex was higher than expected
– 9M revenue/PATMI met 73%/79% respectively, of our full year estimate
– Projects coming online and kicking-in FY19e onward
– Maintain Accumulate; lower target price of $1.30 (previously $1.35)
Phillip Macro Observation – Finding the ceiling for the 10-year Treasury yield
Analyst: Pei Sai Ten
– 10-year Treasury broke above 3%
– Treasury yield will rise through till 2020
– 10-year Treasury yield will reach 4.7%
TECHNICAL PULSE
Jardine C&C Ltd – Weekly timeframe – Bullish
– A hammer rejection bar was formed on the week ended 11/05/18 suggests a reversal higher next.
– Expect price to rebound higher next once the bullish follow-through occurs to for price to test the 36.06 resistance area followed by 38.00.
For more information and additional disclosures, refer to the link here.
BREAKING NEWS
Jailed Malaysian leader Anwar Ibrahim will be released on Tuesday, the veteran politician’s daughter Nurul Izzah told Reuters on Saturday.
AirAsia boss Tony Fernandes on Sunday apologised for a controversial stunt endorsing scandal-tainted Prime Minister Najib Razak before Malaysia’s general election, in which he suffered a stunning defeat.
A Japanese newspaper has raised the possibility of Chinese President Xi Jinping also travelling to Singapore when US President Donald Trump meets North Korean leader Kim Jong Un for an unprecedented summit on June 12.
Hyphens Pharma International , which sells specialty pharmaceutical products, is seeking to raise S$13.5 million through a listing on the Catalist board at S$0.26/share.
Profit Guidance: Profit Guidance: The Board of Directors of King Wan Corporation Limited expects the Group to report a loss for 4Q2018 and FY2018.
Profit Guidance: The Board of Directors of Hor Kew Corporation Limited expects the Group to report a loss for the first quarter ended 31 March 2018.
Profit Guidance: The Board of Directors of CSC Holdings Limited expects the Group to report a loss for the fourth quarter ended 31 March 2018.
Midas Holdings Limited has received a lawyer’s letter dated 8 May 2018 from Allen & Gledhill LLP who is acting for Mr. Chew Hwa Kwang, Patrick. Mr. Chew is claiming sums amounting to S$3,275,083.89.
Olam is acquiring a 60% shareholding interest in Cotontchad SN for an aggregate consideration of nine billion eighteen million CFA Francs.
Mondrain Investment Partners Limite has acquired 6.58% of the issued and paid-up share capital of Sheng Siong Group, from the Executive Directors, Mr. Lim Hock Eng, Mr. Lim Hock Chee and Mr, Lim Hock Leng for a consideration of S$99,990,000 via a married deal.
Nylect International Pte Ltd a 30% indirectly owned associated company of Tai Sin Electric Limited, has entered into an agreement to sell its entire 12.5% stake in Kingsland Development Pte Ltd to Keppel DC EIT.
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, The Business Times, PSR
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
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