Daily Morning Note – 16 May 2019


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Wall Street erased early declines and government bonds trimmed some of their gains on Wednesday as President Donald Trump delayed imposing tariffs on auto imports by up to six months. The S&P 500, which fell as much as 0.7 per cent in morning trade, closed 0.6 per cent higher. The Dow Jones Industrial Average was up 0.5 per cent, while the Nasdaq Composite jumped 1.1 per cent amid strong gains in technology shares. News the Trump administration will delay levies on auto imports in a move to avoid an immediate clash with the EU and Japan on trade revved up US and European carmaker shares and helped bolster markets.


Asian Pay Television Trust – Market pricing in a large premium

REDUCE (Downgraded); TP S$0.16, Last close: S$0.178

– Revenue and EBITDA were marginally above our estimates. ARPU from cable TV
business was more resilient than expected.

– Broadband disappointed with a steep drop in ARPU.

– Cable TV subscribers contracted for the fifth consecutive quarter.

– The strategic review announced by the company on 15 April 2019 has virtually
removed all valuation discounts of APTT against its Taiwanese peers. Since the
review, the share price had appreciated 38%. APTT’s peers are trading at a dividend
yield of c.4.4% and a EV/EBITDA multiple of 11x. Our target price of S$0.16 is an
aggressive 10% discount to these peers. We are downgrading APTT to REDUCE.


G K Goh Holdings has made a voluntary unconditional cash offer for BoardRoom Ltd, the mainboard-listed corporate secretarial services firm, in a bid to delist it. It is offering S$0.88 in cash for each BoardRoom share, in a deal that values the company at S$184.5 million. At S$0.88, the offer price is a premium of 14.3 per cent to the last transacted price of S$0.77 a share on May 3.

Hong Leong Asia on Wednesday posted a net profit from continuing operations of S$12.2 million in the first quarter, up 3.9 per cent from the same period a year earlier. The results exclude its de-consolidated consumer products unit Xinfei, which ceased to be a subsidiary on May 21 last year. Xinfei had posted a net loss of S$17.2 million in the first quarter last year.

US President Donald Trump is expected to delay a decision on imposing tariffs on imported cars and parts by up to six months, three Trump administration officials told Reuters, a decision expected to relieve a broad swath of US industry. A formal announcement is expected by Saturday, the due date for Mr Trump to make a decision on recommendations by the Commerce Department to protect the US auto industry from imports on national security grounds, the officials said.

Cisco Systems reported better-than-expected quarterly earnings on Wednesday and gave an upbeat sales forecast for the current period, saying that minimal sales exposure to China and changes to its supply chains have helped cushion the blow of US-China trade dispute.

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

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