Daily Morning Note – 15 May 2019


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Stocks bounced back from their worst day in months on Tuesday as President Donald Trump reiterated China still wanted to ink a trade deal with the US, allaying some of the market’s concerns over rising tensions between the world’s two largest economies.

In a series of tweets on Tuesday morning, Mr Trump said: “When the time is right we will make a deal with China”. He went on to say of the deal “it will all happen, and much faster than people think!”. However he also said while his “respect and friendship with President Xi is unlimited”, any agreement must also “be a great deal for the United States or it just doesn’t make any sense.”

His slightly more optimistic remarks come after China hit back on Monday with its own retaliatory tariffs on about $60bn worth of US goods and sharply escalated the trade war between the two countries.


Dasin Retail Trust – Short-term pain for long-term gain

Accumulate (Maintained); TP S$0.94, Last close: S$0.87, Analyst: Phillip Research Team

– Revenue were below our expectations due to a new AEI initiative at Xiaolan
Metro Mall, while NPI margins were kept in check due to lower property

– Portfolio occupancy took a hit, from 99.1% in 4Q18 to 97.6% in 1Q19, due to
the new S$1.0mn AEI initiative at Xiaolan Metro Mall.

– Favourable renewal and rental escalation rates are expected at Xiaolan Metro
Mall once the ongoing AEI is completed in 3Q19.

– Maintain ACCUMULATE with unchanged TP of S$0.94.

Netlink NBN Trust – Stability + Growth

Recommendation: ACCUMULATE (Maintained), Last Done: S$0.835

Target price: S$0.93, Analyst: Alvin Chia

– Results met our expectations. Higher contributions from residential
connections, ducts & manholes, diversion & manholes services helped offset
lower installation revenue

– Number of residential connections exceeded our forecasts by 2.1% while the
number of non-residential and NBAP connections missed by 3.2% and 5.8%

– We roll over our valuations to FY20e. Maintain ACCUMULATE with a higher TP
of S$0.93 (prev. S$0.89). Our valuations is based on a DCF (WACC 6%, Terminal
growth 1%).

EC World REIT – An accretive acquisition and longer WALE

Recommendation: Buy (Maintained), Last Done: S$0.79

Target Price: S$0.87, Analyst: Phillip Securities Research

– 1Q19 NPI and DPU were in line with our forecast.

– WALE by GRI extended from 1.8 to 4.7 years due to the extension of master

– Proposed yield accretive acquisition of ROFR asset with 5+5 year master leases
expected to increase FY19e/FY20e DPU by 0.64% and 6.17% respectively.

– 100% of debt maturing in July 2019; refinanced debt maturity profile will be

– Maintain Buy with higher TP of S$0.87 (prev. S$0.85) to factor in the proposed

Health Management International – No pain, no gain

Recommendation: Buy (Maintained), Last Done: S$0.530

Target Price: S$0.73, Analyst: Tin Min Ying

– 9M19 EBITDA and core PATMI met 69% and 61% of our full-year estimates due
to two quarters of Starmed’s gestation costs.

– Excluding the impact from StarMed, 3Q19 EBITDA and core PATMI would have
expanded by 5.6% YoY and 10.0% YoY. Starmed’s top line contribution is
currently immaterial.

– Group revenue rose 8.1% YoY, due to higher patient load (+1.3% YoY) and
larger patient bill sizes (+5.3% YoY) from the two Malaysia hospitals.

– Completed acquisition of 28% stake in Plus Medical (primary care clinic chain)
in 3Q19.

– Maintain BUY with a lower DCF-derived TP of S$0.73 (previously S$0.77). Our
lower target price was due to the incorporation gestation costs of RM6-9mn
EBIT loss for the first three years of Starmed’s operation.


Oil prices jump on drone attack on Saudi Aramco facilities. Oil prices rose nearly 2 per cent on Tuesday after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco. Brent futures were up US$1.13, or 1.6 per cent, at US$71.36 a barrel by 11.26am EDT (1526 GMT), while US West Texas Intermediate (WTI) crude was up 85 US cents, or 1.4 per cent, at US$61.89 per barrel.

Trump expected to sign order paving way for US telecoms ban on Huawei. US President Donald Trump is expected to sign an executive order this week barring US companies from using telecommunications equipment made by firms posing a national security risk, paving the way for a ban on doing business with China’s Huawei, three US officials familiar with the plan told Reuters.

US warns EU over ‘poison pill’ defence plans. The United States has sent a stern warning to the European Union that its plans to boost defence cooperation within the bloc could unravel decades of transatlantic cooperation and damage the North Atlantic Treaty Organization (Nato). A May 1 letter from two of US President Donald Trump’s top defence officials, obtained by AFP, is the latest sign of deep misgivings in Washington about the EU’s push to make its military spending more coherent.

Home prices in the US climb at slower pace as inventory rises. US home prices rose at a slower rate in the first quarter as more owners listed their properties for sale, according to the National Association of Realtors. The median price for a previously owned single-family house increased 3.9 per cent from a year earlier to US$254,800, the Realtors group said in a report Tuesday. Prices rose in 153 of 178 metropolitan areas measured. Thirteen regions had price increases of 10 per cent or more, down from 14 in the fourth quarter.

Yanlord Land Q1 net profit falls 59% to 323m yuan. China-Based property developer Yanlord Land on Tuesday posted a net profit of 323 million yuan (S$64.3 million) in the first quarter, down 59 per cent from the same period a year earlier. Revenue in the three months ended March 31 fell 50 per cent to 3.6 billion yuan, due to the decrease in gross floor area delivered, in line with the group’s delivery schedule for the first quarter.

Hyflux clarifies it has not received binding offer from Utico. No binding offer to invest in Hyflux has been submitted by Utico, Hyflux said on Tuesday, contrary to a Reuters report that was published over the weekend. In the report dated May 12 titled UAE’s Utico submits binding offer to invest in Hyflux: CEO, Utico’s chief executive Richard Menezes was quoted as telling Reuters that the United Arab Emirates-based utility firm had submitted a binding term sheet to Hyflux last week.

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

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