Daily Morning Note – 20 August 2018


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The Dow Jones Industrial Average rose Friday to finish a second consecutive week higher, as fears of contagion from Turkey’s currency crisis continued to retreat. The Dow industrials climbed 110.59 points, or 0.4%, to 25669.32, while the S&P 500 added 9.44 points, or 0.3%, to 2850.13. The Nasdaq Composite rose 9.81 points, or 0.1%, to 7816.33.The additional gains helped the Dow and S&P 500 notch a second consecutive week of gains, of 1.4% and 0.6%, respectively. The Nasdaq, however, is down 0.3% over the past five trading days, as tech stocks came under pressure earlier in the week.

In Asia, market performances were mixed. Hong Kong’s Hang Seng went up 0.4% on Friday, breaking a five-day losing streak as index heavyweight Tencent Holdings recovered from a huge setback caused by downbeat earnings results. While the Shanghai Composite fell 1.3%, ending the week down 4.5% to touch its lowest closing value since January 2016.


Golden Energy and Resources Ltd – Production on track but higher costs

Recommendation: BUY, Last Done Price: S$0.305

Target Price: S$0.42, Analyst: Chen Guangzhi

– Production surged 47% while coal prices were flat

– Multiple upward pressures on cash cost

– Positive on FY18 performance

Technical Analysis: Technical Pulse – The Phillip 20 Portfolio – July Monthly Review

Analyst: Jeremy Ng

– New Entries: SATS, Singtel, UMS, Venture, UOB and China Sunsine

– Stop Loss: OCBC, China Sunsine, CityDev, Haw Par, Wing Tai, Allied Tech and
China Everbright

– Total return since May 17 to June 18 is 1.07%

– 3200 psychological round number needs to hold for the long-term uptrend in
the STI to remain intact

CNMC Goldmine Holdings Limited – Halfway to production turnaround

Recommendation: BUY (Maintained), Last Done Price: S$0.23

Target Price: S$0.29, Analyst: Chen Guangzhi

– Carbon-in-leach (CIL) plant elevated production volume.

– Operating and non-operating expenses ate up revenue growth.

– Double whammy from strengthening USD

Thai Beverage – No money, no spirit

Recommendation: REDUCE (Downgraded), Last Done Price: S$0.665

Target Price: S$0.620, Analyst: Phillip Research Team

– 3Q18 revenue and net profit were below expectations

– Spirits demand hurt by weak rural incomes in Thailand due to soft agriculture

– Minimal earnings contribution from Sabeco due to high interest expense

– Downgrade to REDUCE with lower SOTP-derived TP of S$0.62 (previously
S$1.05). We cut our FY18e earnings by 19%. Our DPS for FY18e also reduced
to THB0.41 (previously THB0.52).


Frame Pictures, a wholly-owned subsidiary of Spackman Entertainment Group, has secured four major camera equipment deals for a Korean film and three Korean drama series.

Midas Holdings Limited has received a letter from CRRC’s lawyers dated 14 August 2018 and a copy of a final judgement filed on 9 August 2018 by Hong Kong’s high court. According to the judgement, Midas is to pay a sum of approximately US$7.3 million to CRRC.

Nam Cheong has received approval from the Singapore Exchange for more time to announce its Q1 2018 and Q2 2018 results.

An indirect Indonesian subsidiary of TT International has been placed under a suspension of debt payment obligations regime, following a petition submitted by creditor PT Bank Resona Perdana to the Central Jakarta District Court.

Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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