Daily Morning Note – 15 November 2021


Asian stocks looked set for a steady open Monday as traders await key Chinese economic data and monitor bond-market volatility triggered by high inflation and the prospect of tighter monetary policy.

Australian shares edged up, while futures for Japan and Hong Kong rose. U.S. contracts pushed higher after technology shares bolstered the S&P 500 on Friday, underlining the stock market’s resilience to price pressures stoked by supply chain and labor disruptions. The yen slipped.



Mainboard-Listed United Food Holdings posted a second-quarter net loss attributable to shareholders of 1.9 million yuan (S$402,957), narrowing from 2 million yuan in the year-ago period. Revenue was down 53.9 per cent to 293,000 yuan in the 3 months, compared to the 636,000 yuan in the previous year. The group said that revenue mainly came from its additives related segment, as its animal feed/traditional medicine segment was “adversely affected” by the African swine fever in Q2. Cost of sales dropped 94.2 per cent to 19,000 yuan, while the quarter’s gross profit fell 11 per cent to 274,000 yuan.

Bukit Sembawang Estates‘s net profit for the first half ending Sep 30 fell 28 per cent to S$53.4 million, from S$73.7 million the year before. The group’s earnings per share dropped to 20.61 Singapore cents from 28.45 cents last year. Revenue also fell 11 per cent to S$198.8 million, while cost of sales inched upwards by 3 per cent to S$128.5 million. This, along with lower profit recognised on development projects, led gross profit to fall 29 per cent to S$70.3 million from the previous year’s S$98.4 million. Bukit Sembawang’s other income decreased by 18 per cent to S$722,000, mainly due to less government grant income which came as relief measures during the pandemic.

Flag carrier Singapore Airlines (SIA) has witnessed strong demand in the premium cabin on the vaccinated travel lane (VTL) flights, including that from business travel. SIA stated the quarantine-free travel arrangement that Singapore has launched for a growing list of countries since September has triggered strong booking demand, especially in premium cabins. Lee Lik Hsin, executive vice-president of the airline’s commercial division, elaborated during a financial results briefing on Friday (Nov 12) that the strong demand came from all segments: business, leisure and family travel.

Boustead Singapore posted a 2 per cent drop in net profit to S$21.3 million for the half-year ended September, as a result of the resumption of “more normalised” revenue recognition at its real estate unit, Boustead Projects. The company has declared an interim dividend of 1.5 Singapore cents per share, up from 1 cent per share in the year-ago period. However, adjusted for other items, including impairments and the Jobs Support Scheme, net profit was down 24 per cent to S$19 million, the infrastructure company announced on Friday (Nov 12). Revenue for the half-year rose 17 per cent to S$340.3 million. This growth was led by Boustead Projects, which posted a S$179.1 million topline, more than double last year’s, on improved revenue recognition for engineering and construction projects. Most of these projects were hit by the nationwide 4-month closure last year.

Capitaland Integrated Commercial Trust’s (CICT) manager announced on Friday (Nov 12) that the trust will divest its stake in One George Street. CapitaLand Commercial Trust (CCT) had previously sold the property for S$1.18 billion into a limited liability partnership called OGS LLP, of which the trust owned 50 per cent. The 50 per cent stake was then absorbed into CICT after CCT and CapitaLand Mall Trust merged. On Nov 12, CICT’s manager said that OGS LLP will divest its whole stake in One George Street to SG OGS, a private limited company, for S$1.28 billion, or approximately S$2,875 per square foot. CICT will receive approximately S$640.7 million, or 50 per cent of the consideration for the sale.

Palm oil producer Bumitama Agri has recorded 588.7 billion rupiah in net profit for the third quarter ended September, marking an all-time high as prices of the commodity boom globally. The spike is due to a “pent-up increase” in the average selling price of Bumitama’s crude palm oil (CPO) to at an average of 10,000 rupiah per kg, the company said in its quarterly update on Friday (Nov 12). The average selling price is 27 per cent higher than in the year-ago period, while sale volume grew 13 per cent. This lifted Q3 revenue from the key product 43 per cent to 2,679.8 billion rupiah.


The impact of Apple’s privacy change in April is beginning to show up on the balance sheets of other companies, and it shows the huge power Apple wields over industries unrelated to consumer electronics. In April, Apple released an update for iPhones with a new popup that asked users if they wanted to allow apps on their phones to target the user for ads. IPhone owners could easily opt-out by tapping a button labeled “Ask App Not to Track.” Over six months later, it’s clear most iPhone users did opt-out, and the feature, called App Tracking Transparency (ATT), is now presenting challenges to companies ranging from Snap to Facebook to Peloton.

Apple is making U.S. states foot part of the bill and provide customer support for its plan to turn iPhones into digital identification cards, according to confidential documents obtained by CNBC. The company requires states to maintain the systems needed to issue and service credentials, hire project managers to respond to Apple inquiries, prominently market the new feature and push for its adoption with other government agencies, all at taxpayer expense, according to contracts signed by four states. Apple announced in June that its users could soon store state-issued identification cards in the iPhone’s Wallet app, billing it as a more secure and convenient way for customers to provide credentials in a variety of in-person and remote settings. The feature, when combined with Apple’s biometric security measures like Face ID, could cut down on fraud.

Tesla CEO Elon Musk said high production and break-even cash flow will be the true test for rival carmaker Rivian, which had a blockbuster IPO this week and now has a market value of more than $100 billion. “There have been hundreds of automotive startups, both electric and combustion, but Tesla is [the] only American carmaker to reach high volume production & positive cash flow in past 100 years,” Musk said in a tweet Thursday. He added, “I hope they’re [Rivian] able to achieve high production and breakeven cash flow. That is the true test.”

Health-care conglomerate Johnson & Johnson announced plans Friday to split its consumer products business from its pharmaceutical and medical device operations, creating two publicly traded companies. The news sent shares higher in premarket trading. The separation will sheer off its household products unit, maker of Band-Aid bandages, Aveeno and Neutrogena skin care products, and Listerine, from its riskier, but faster-growing division that makes and sells prescription drugs and medical devices, including its Covid-19 vaccine. “Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world,” outgoing CEO Alex Gorsky said in a statement.

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

ComfortDelGro Corp Ltd – Restructuring whimper but cash rolling-in

Recommendation: BUY (Maintained); TP S$1.80, Last close: S$1.51; Analyst Paul Chew

– 3Q21 earnings was below expectations. 9M21 revenue and PATMI was 70%/60% of our FY21e forecast respectively. Taxi rebates in 3Q21 resulted in operating losses.

– owntown Line (DTL) transitioning to NRFF 2 resulted in a net S$15mn saving. But new bus contract extension may lower future operating earnings by S$34mn.

– The downside protection of earnings from NRFF 2 was lower than expected. At the peak of the restrictions last year, savings was only around S$15mn. Any shortfall in takings is limited to the license fee payable to authorities. We lower our FY21e PATMI by 8%. Our DCF target price (WACC 8%) is lowered modestly to S$1.80. The downside in revenue is offset by lower than expected capital expenditure. Operating cash-flows for the company remains healthy, coupled with record cash levels. Comfort is our transport proxy for Singapore’s reopening and normalisation of social and work activities.

Lendlease Commercial REIT – Positive reversions and impending acquisition

Recommendation: ACCUMULATE (Upgraded), Last Done: S$0.900

Target Price: S$0.97, Analyst: Natalie Ong

– No financials provided in the operational update. High-single digit reversions were a positive surprise. High occupancy of 99.8% maintained. Slight 3.1% increase in tenant sales.

– Upgrade from NEUTRAL to ACCUMULATE with DDM TP (COE 7.7%) raised from S$0.87 to S$0.97. Estimates revised following a change of analyst. We raise our forecasted contributions for the 31.8% stake in JEM and Grange Road Carpark redevelopment project. FY22e/23e DPU increases by 8.6%/7.7%. TP climbs 11.5% due to the adjustment in earnings and a lower cost of equity assumption of 7.7% (prev. 8.0%). Impending acquisition of remaining stake in JEM is a catalyst for LREIT.

PropNex Ltd – A new altitude

Recommendation: ACCUMULATE (Maintained); TP S$2.08, Last close: S$1.92; Analyst Paul Chew

– 3Q21 PATMI spiked 113% YoY to S$16.5mn. 9M21 revenue and PATMI were within expectation at 73%/72% of FY21e forecast.

– The fastest growing segment was private resale, revenue tripled to S$70.6mn.

– The company aims to pay out 75%-80% of FY21 PATMI as dividends. We raise our FY21e DPS by 17% from 11.5 cents to 13.5 cents per share. This implies FY21e dividend yield of 7%.

– Our FY21e forecast and DCF target price (WACC 9.8%) of S$2.08 is unchanged. Our ACCUMULATE recommendation is maintained. PropNex’s revenue run rate is at a new level of around S$200mn per quarter, up from S$100mn in the prior years. Supporting this new altitude of revenue will be the record growth in agents, maiden revenues from collective sales and healthy property transactions aided by a recovering economy, low interest rates and rising replacement costs.

StarHub Limited – Stable with roaming + cybersecurity optionality

Recommendation: NEUTRAL (Maintained); TP S$1.24, Last close: S$1.28; Analyst Paul Chew

– 3Q21 results met our expectations. 9M21 revenue and EBITDA were at 72% and 80% of our FY21e forecasts respectively.

– Broadband and entertainment revenue trending ahead of our estimates due to increase in ARPUs. Mobile remains weak, dragged down by large churn in prepaid subscribers.

– 3Q21 cybersecurity operating profits more than doubled from S$2.8mn to S$5.8mn.

– No change to our forecasts. We maintain NEUTRAL with an unchanged target price of S$1.24. Valuations based on regional peers’ 6x FY21e EV/EBITDA. Starhub pays a stable 4% dividend yield with undervalued optionality in roaming and cybersecurity. There is upside to our target price if borders re-open faster, allowing roaming revenue to return. Another re-rating catalyst is sustained earnings from the cybersecurity operations or a corporate exercise for higher price discovery.

POEMS Podcast: Let the Money Talk

Recent Podcasts:

Sheng Siong Group 3Q21 Results – SGX Company Insights Ep 41

Apple Inc 4Q21 Results – US Company Insights Ep 40

Amazon.com Inc 3Q21 Results – US Company Insights Ep 39

Visit www.stocksbnb.com to learn more!

Join our Phillip Securities Research Telegram channel for the latest update on our stock coverage!

Click here to join: https://t.me/stocksbnb

Webinar Of The Week

Weekly Market Outlook: Apple, Netflix, Facebook, Keppel DC, Fraser, IFAST, Japfa, SPH, Sheng Siong.

Date: 01 November 2021

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation

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

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


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