Daily Morning Note – 20 Aug 2020

PHILLIP SUMMARY

Asian stocks looked set for a cautious start Thursday after the dollar climbed and U.S. equities retreated in the wake of the FOMC’s minutes. Futures ticked lower in Japan, Australia and Hong Kong. The S&P 500 erased gains as the Fed noted the coronavirus crisis would “weigh heavily” on economic activity. The greenback advanced after a five-day rout, gold tumbled and Treasuries slipped as policy makers panned yield-curve control. Elsewhere, oil slipped from a five-month high as the OPEC+ alliance urged members to adhere to limiting output as the coronavirus pandemic threatens a demand recovery.

BREAKING NEWS

Catalist-listed glove manufacturer UG Healthcare Corporation has proposed to place up to 7.5 million shares at S$2.545 apiece to raise a total sum of S$19.1 million. The placement price represents a discount of about 9.9 per cent to the volume-weighted average price of S$2.8247 for trades done on the Singapore Exchange on Tuesday.

Guocoland is expanding its multi-billion-dollar integrated development on Beach Road, Guoco Midtown, to include a second luxury residential project named Midtown Modern. The condomininum will consist of two 30-storey towers with more than 500 apartments in a forest garden setting, as well as a retail podium, the mainboard-listed property developer announced in a press statement on Thursday.

Quarz Capital Management said on Wednesday that it, together with other minority shareholders, looks forward to receiving guidance and support from the Monetary Authority of Singapore (MAS) and the Singapore Exchange Regulation (SGX Regco) on the proposed merger between Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) and ESR-Reit.

The Singapore Exchange Regulation (SGX RegCo) on Wednesday released an inaugural publication, Findings and Recommendations on Continuing Sponsorship Work, which aims to highlight areas for improvement following its observations of reviews and inspections of sponsors on the Catalist board.

Millennium Hotels and Resorts (MHR) cut 159 jobs, or about 15 per cent of its Singapore-based workforce, on Wednesday amid weak tourism demand due to the Covid-19 pandemic.

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

TECHNICAL PULSE

Wilmar International Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Wilmar International (SGX: F34) bullish strength has beat our target price based on our report dated 7th July and the technical suggest that the stock will make a higher high beyond $5.00.

>> Read more technical reports

RESEARCH REPORTS

Hyphens Pharma International Ltd – Shaking off COVID-19 woes with expanded portfolio

Recommendation: ACCUMULATE (Maintained); Last Done: S$0.450

Target Price: S$0.495; Analyst: Tay Wee Kuang

– Earnings of S$4.28mn make up 64% of our FY20e estimates.

– Revenue growth of 10% YoY in 1H20 was held up by an all-around stronger 1Q20 result as well as a 24% growth YoY in revenue from proprietary brands in 2Q20.

– Cash flow for 1H20 was down S$1.7mn as inventory levels were elevated in anticipation of disruptions arising from product license renewals in Vietnam.

– Group continues to invest into building its proprietary brands portfolio with acquisition of haircare product CG 210® and new product launches across its Ceradan® and Ocean Health® brand portfolio.

Maintain ACCUMULATE with upward revision in TP to S$0.495 (prev S$0.435). We revise FY20e earnings upwards by 25% to reflect strong revenue growth and income recognised from Job Support Scheme in 2H20.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

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