Daily Morning Note – 22 February 2018


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Thai Beverage – New additions to reach greater heights
Recommendation: Buy (Maintained), Last Close Price: S$0.84
Target Price: S$1.05 (Downgraded), Analyst: Soh Lin Sin
– 1Q18 Revenue/Adjusted PATMI met 22%/18% of our full year expectations
– Slower-than-expected domestic alcohol beverage, mitigated by improvement
in non-alcoholic beverages and food business
– Earnings weighed by lower associates contributions, THB2.3bn non-recurring
acquisition expenses and higher finance costs
– Next to watch in 2Q18: First contribution from Sabeco (as consolidated
subsidiary basis)
– Maintained BUY with lower SOTP-derived TP of S$1.05 (previously S$1.18)

United Overseas Bank Limited – Stellar performance across all segments
Recommendation: BUY (Upgrade), Last Traded Price: S$27.46
Target Price: S$29.00, Analyst: Jeremy Teong
– 4Q17 PATMI of S$855mn is in line with our estimate.
– NII increased 15% YoY on the back of robust loans growth and higher NIM.
– WM fee income grew 29% YoY on higher contribution by HNW segment.
– Higher specific provisions were offset by reversal of excess general provisions.
– Upgrade to BUY (previously ACCUMULATE) with a higher target price of
S$29.00 (previous TP S$25.22) based on Gordon Growth Model.

Oversea-Chinese Banking Corp – Stellar performance across all segments
Recommendation: BUY (Upgrade), Last Traded Price: S$12.92
Target Price: S$13.94, Analyst: Jeremy Teong
– 4Q17 PATMI of S$1,033mn was in line with our estimates
– NII increased 14% YoY on the back of strong loans growth and higher NIM
– WM fee income grew 38% YoY on the back of strong AUM growth
– Net trading income weaker YoY and QoQ as global FICC trading environment
remains weak.
– Upgrade to BUY (previously ACCUMULATE) with a higher TP of S$13.94
(previous TP S$13.48) based on Gordon Growth Model.

Retails on Sale – Overreaction to Walmart results
Analyst: Ho Kang Wei
– WMT results disappoint
– Spillover to other retail stocks overdone
– Retail and e-commerce fundamentals remain strong


Hang Seng Index – Daily timeframe – Bullish
– The bullish follow-through has also succeeded in breaking price back above
the 30,000 psychological round number, 20 and 60 day moving average on
21/02/18 signals the resurgence of the bulls.
– Expect the long-term uptrend to resume next for price to test the 31,958
resistance area followed by 33,000 round number.

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


Sanli Environmental Limited has secured four new Engineering, Procurement and Construction contracts worth a total of S$18.1mn, bringing the Group’s order book to S$121.3mn. The Contracts are expected to contribute to the Group’s revenue for the FYE 31 March 2018.

Silverlake Axis Ltd has secured 5 new accounts in ASEAN and Hong Kong for its insurance customer ecosystem platform business.

United Overseas Bank Limited intends to issue GBP350mn Floating Rate (0.24% over the 3-month Sterling LIBOR) Covered Bonds due 2023 on 28 Feb-18.

Frasers Commercial Trust plans to issue S$60mn 3.185% notes due 2023 on 28 Feb-18 and will be unconditionally and irrevocably guaranteed by the FCOT Trustee, i.e. British and Malayan Trustees Limited.

Charisma Energy Holdings Limited issued a negative profit guidance for the 4Q2017 and FY2017 financial statements, on challenging operating environment in the marine and offshore oil and gas industry. The Group is expected to record a net loss due to impairments (value has yet to be finalized). FY2017 results will be announced on or after 23 Feb-18.

Source: SGX Masnet, 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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