Daily Morning Note – 20 July 2018

WEEKLY MARKET OUTLOOK WEBINAR

Register HERE for MONDAY’s 11.15am webinar.

Archived webinars available.

RESEARCH REPORTS

SIA Engineering Company Ltd – Surge from JV and associated companies
Recommendation: Accumulate (Maintained), Last Close Price: $3.19
Target Price: $3.56 (previously $3.57), Analyst: Richard Leow
– Revenue and PATMI met 23.1% and 24.4% respectively of our FY19 estimate
– YoY higher PATMI driven by increase in associates/JV, partially offset by lower
EBIT
– Maintain Accumulate, new target price of $3.56 (previously $3.57)

SATS Ltd – Good turnaround at various levels
Recommendation: Accumulate (Maintained), Last Close Price: $5.10
Target Price: $5.58 (unchanged), Analyst: Richard Leow
– Revenue and PATMI exceeded our expectation by 6.8% and 5.7% respectively
– Revenue and PATMI met 25.7% and 25.3% respectively of our FY19 estimate
– Inflight kitchen JV with Turkish Airlines has been terminated
– Kunshan central kitchen turned profitable ahead of schedule
– MBCCS has turned profitable as well
– Maintain Accumulate; unchanged target price of $5.58

CapitaLand Commercial Trust – Continued recovery in office rents
Recommendation: Accumulate (Maintained), Last Close Price: S$1.75
Target Price: S$1.88, Analyst: Tan Dehong
– 1H18 revenue and DPU at 49% of our FY18e expectations.
– Office rents continue to stage strong recovery, growing 4.1% QoQ in 2Q18.
– Increase in portfolio valuation due to capitalisation and discount rate
compression.
– Expect negative rental reversion trend to turnaround in 2019.
– Maintain Accumulate with unchanged TP of S$1.88.


TECHNICAL PULSE

SPH Ltd – Daily timeframe – Bullish
– The bulls finally won the tug of war lately after the bullish breakout above the
2.79 range high on 17/07/18 signals the trend has turned bullish.
– However, with the sharp rise in price since July, the Relative Strength Index
(RSI) has entered into the overbought condition signalling for a possible
correction first before the uptrend resumes.

For more information and additional disclosures, refer to the link here.

BREAKING NEWS

The Securities Industry Council (SIC) on Thursday said it has proposed amendments to the Singapore Code on Takeovers and Mergers to clarify the application of the code provisions to companies with a dual-class share structure (DCS) that have a primary listing on the Singapore Exchange.

Comcast Corp dropped its US$66 billion (S$90.4 billion) bid for Twenty-First Century Fox Inc’s entertainment assets on Thursday but said it would still try to expand its international footprint by acquiring 61 per cent of European broadcaster Sky Plc, the remainder of which is owned by Fox.

Olam International on Thursday announced that its wholly-owned subsidiary Olam Americas Inc (OAI) has successfully priced a US$100 million issuance of 5-year fixed-rate notes via a private placement.

Malaysian budget airline AirAsia Thursday announced an additional order of 34 Airbus A330neo planes, bringing the total value of its expanded 100-plane order to US$30 billion as it sets its sights on European routes.

Clearbridge Health on Thursday said its associated company, Clearbridge BioMedics, has completed its fundraising exercise.

No serious bids have been made yet for Hyflux’s sale of Tuaspring, although there are now eight interested parties at various stages of the bidding process, Hyflux chief executive Olivia Lum said on Thursday.

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

Important Information

Disclaimer
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 “as 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.