Daily Morning Note – 16 November 2020


U.S. equity futures opened higher Monday and Asian stocks looked poised to gain amid positive sentiment on trade in the region and after a national U.S. lockdown was ruled out.

Shares kicked off the week firmer in Australia. Asia Pacific nations including China, Japan and South Korea on Sunday signed the world’s largest regional free-trade agreement. Meanwhile, advisers to President-elect Joe Biden said they opposed a nationwide U.S. lockdown despite the pandemic accelerating, favoring targeted local measures instead. Oil advanced.


Eagle Hospitality Trust (EHT) will probably not have income available for distribution for the year to Dec 31, the manager has said. Given factors such as the trust’s loans and liquidity, as well as master lessees’ inability to make rental payments.

An agreement between Keppel Corp associate Floatel International and its bondholders has been extended by another two weeks, as talks with creditors continue. Floatel’s forbearance and deferral agreement with an ad-hoc committee of first-lien bondholders was most recently pushed from Nov 15 to Nov 30, according to an update on Saturday.

Genting Singapore continues to experience weak demand at its Resorts World Sentosa (RWS) property, even after the property reopened from July 1 amid the deadly Covid-19 pandemic. Genting released its third-quarter business update on Saturday, showing a 65.7 per cent slide in net profit for the three months to Sept 30..

Securities Investors Association (Singapore), or Sias, said that it is ready to work with all investors to support Hyflux preference shares and perpetual securities (P&P) holders, after a new rescue offer for the beleaguered water treatment company. American fund manager Strategic Growth Investments (SGI) – Hyflux’s fourth and most recent suitor – has proposed to buy and privatise Hyflux with an investment of some S$208 million in cash.

Cinema and events businesses. mm2 posted a net loss of S$22.4 million for the half-year to Sept 30, against a net profit of S$9.18 million in the year-ago period, according to unaudited results out on Saturday.

British Prime Minister Boris Johnson is self-isolating after coming into contact with someone who tested positive for Covid-19, a fresh setback after infighting among his top advisers plunged Downing Street into chaos last week.

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


FedEx Corp

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

FedEx (US: FDX) is on track to the upside and based on the report on 30th of October 2020, we are still on track to the final leg of wave (b):

DocuSign Inc

Analyst: Chua Wei Ren

Recommended Action: Technical SELL

DocuSign Inc (US: DOCU) upside has capped since prices fails to advance beyond US$247.00 since its high in mid-August at US$290.23. To further add on, technical is showing signs of further weakness:

>> Read more Technical reports


Hyphens Pharma International Ltd – Series of unfortunate events

Recommendation: Accumulate (Maintained); TP: S$0.365

Last Done: S$0.345, Analyst: Tay Wee Kuang

– 9M20 earnings of S$5.1mn was 17% below our estimates

– Revenue grew 2% YoY to S$31.4mn, as strong growth in proprietary brands segment offset weaker revenues from specialty pharma and medical hypermart segment.

– Ramifications of COVID-19 led to an excess of S$565k in inventory obsolescence and S$217k of foreign exchange losses, which heavily impacted earnings.

– Short-term earnings weakness expected as company reorganises business operations to manage thinning margins and heightened inventory levels.

– The company signed two distribution agreements over the past month, highlighting deliberate efforts to grow its proprietary brands.

– Maintain ACCUMULATE with reduced TP of S$0.365 from S$0.495. We revise our FY20e earnings downwards by 20% as we expect business to recover pre-COVID momentum only in FY22.

Singapore Telecommunications Ltd – Same pain points for now

Recommendation: NEUTRAL (Maintained); TP S$2.44

Last close: S$2.30; Analyst Paul Chew

– 1H21 ex-exceptional results within expectations, 1H21 EBITDA at 45% of our FY21e forecast.

– Two major exceptionals were dilution gain on Airtel of S$550mn and Airtel’s exceptional losses of S$912mn from additional licence fees and spectrum charges.

– Optus’ EBITDA fell 30% YoY to A$977mn due to loss of on-net broadband subscribers and weaker equipment sales.

– Interim dividend cut by 25% to 5.1 cents (1H20: 6.8 cents).

– Only FY21 guidance was dividends from associates will be S$1.3bn (FY20: S$1.3bn). Maintain NEUTRAL and SOTP TP of S$2.44. Operationally, the worst appears over as EBITDA is improving QoQ. The two pain points remain declining roaming revenue as borders shut and loss of high-margin broadband business in Australia to NBN.

PropNex Ltd – More resilient than expected

Recommendation: BUY (Maintained); TP S$0.85

Last close: S$0.68; Analyst Paul Chew

– 3Q20 PATMI rose 10.6% YoY to S$6.8mn, far exceeding our forecast. 9M20 earnings form 111% of our FY20e forecast. Despite lockdown, new project revenue was more resilient than expected.

– Revenue from new projects rose 15% YoY to S$51.9mn. Higher market share, billing of earlier projects and successful virtual selling were some of the reasons.

– Net cash of S$94.7mn, up from 3Q19’s S$74.5mn.

– Maintain BUY with a higher DCF TP of S$0.85, from S$0.70. Circuit breaker might have affected resale and rental revenue but not new project sales. Yields of 6% and cash flows of S$28mn p.a. with modest capex and working-capital requirements are what we like about PropNex.

ComfortDelGro Corp Ltd – Recovery underway, back to net cash

Recommendation: BUY (Upgraded); TP S$1.83

Last close: S$1.54; Analyst Paul Chew

– 3Q20 PATMI below expectations due to lower-than-expected rail ridership and bus-service fees. 9M20 PATMI at 18% of our FY20e forecast.

– Revenue rebounded S$152mn QoQ to S$816mn. Operating losses narrowed by S$118mn QoQ. There is large operating leverage for Comfort as revenue rebounds. We expect a stronger recovery in the coming quarters.

– Net cash of S$115mn vs. net debt of S$115mn a year ago.

– Most restrictions on group gatherings in Singapore will be lifted only in 4Q20. Phase 3 easing should further increase transportation volumes. Upgrade stock from ACCUMULATE to BUY with earnings catalysts expected from this. PATMI for FY20e cut by 50% but FY21e estimate raised by 16%. Accordingly, our DCF TP climbs to S$1.83 from S$1.65. Comfort is our preferred proxy for a recovery in the transportation sector. Unlike air transport, passenger-volume rebounds are more immediate and pronounced with pricing more stable in a regulated industry.

Asian Pay Television Trust– Dividends maintained for FY21

Recommendation: BUY (Maintained); TP S$0.15

Last close: S$0.117; Analyst Paul Chew

– 3Q20 revenue and EBITDA were within our expectations, at 76%/78% of our FY20e forecasts.

– Revenue rose 4% YoY and EBITDA, 5%. FX contributed 6.3% points to the improvements.

– Cable subscribers contracted 5,000 QoQ to 716,000. Offset by higher premium digital TV (+10,000) and broadband (+2,000) subscribers.

– Management guided that DPS of 0.25 cent/quarter will be maintained for FY21. Our forecasts are largely unchanged. Maintain BUY and target price of S$0.15. Our valuation is benchmarked to 9x EV/EBITDA, a discount to Taiwanese peers. Dividend yield of 8.5% is attractive and sustainable.

SG Bonds Weekly – Week 47

Credit Analyst: Timothy Ang

– The Asia primary debt market restarted its engines this week post US presidential elections, with 19 deals priced entirely from Chinese issuers or with a Chinese company guarantee.

– Halcyon Agri Corporation priced a USD 200mm PerpNC5 at 3.8%, 30bps tighter from the initial price guidance.

– Singapore Airlines (SIA) is proposing to issue up to S$850 million in the principal amount of bonds, convertible into new ordinary shares in the company’s capital.

– Singpost Group Treasury issued a S$250 million in 10-year fixed-rate notes guaranteed by postal service provider Singapore Post.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here


Webinar Of The Week

Market Outlook: (PSR) StarHub, Banks & REIT Results, Banking Monthly, Credit Commentary, SG Weekly & more

Date: 09 November 2020

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #26 – iX Biopharma Ltd; 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