Daily Morning Note – 30 April 2018
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RESEARCH REPORT
China Sunsine Chemical Holdings Ltd – An incredible start for the year
Recommendation: BUY (Maintained), Last Done Price: S$1.48
Target Price: S$1.97, Analyst: Chen Guangzhi
– High ASP and sales volume extended into 1Q18
– GPM and NPM reached historical highs
– The trial run of new capacity is expected to get approval by 2Q18
Technical Analysis: Monthly recession tracker – April update (back to normal)
Recommendation: Accumulate (Upgraded), Last Close Price: S$1.55
Target Price: S$1.66, Analyst: Tan Dehong
– NPI and DPU within our estimates.
– Improvement in retail sales, up 2.1% YoY vs 0.8% in FY17.
– S$3mn capital distribution from divestment gains to top up distributable income.
– No refinancing needs in 2018.
– Upgrade to Accumulate with unchanged DDM-derived target price of S$1.66.
CapitaLand Retail China Trust – Proactive mall management to boost performance
Recommendation: Accumulate (Upgraded), Last Close Price: S$1.55
Target Price: S$1.66, Analyst: Tan Dehong
– NPI and DPU within our estimates.
– Improvement in retail sales, up 2.1% YoY vs 0.8% in FY17.
– S$3mn capital distribution from divestment gains to top up distributable income.
– No refinancing needs in 2018.
– Upgrade to Accumulate with unchanged DDM-derived target price of S$1.66.
Ho Bee Land – Relaunch of Sentosa properties to ride the market upcycle
Recommendation: Accumulate (Maintained), Last Close Price: S$2.56
Target Price: S$2.98, Analyst: Tan Dehong
– Gross revenue within our forecast. Net profit outperformed because of higher
contributions from associates, due to higher volume of handovers of sold units.
– Relaunch of Sentosa properties to take place this year.
– Metropolis remains 100% leased. 30% of leases due for expiries this year- Expect
flat to low single digit reversions.
– Entry into Continental Europe with investment into property fund.
– Maintain ACCUMULATE with unchanged RNAV-derived target price of S$2.98.
BREAKING NEWS
U.S. stocks finishing the Friday session little changed despite strong earnings as technology shares pulled back. The Dow Jones Industrial Average dipped 0.05%, while S&P 500 rose 0.11% and Nasdaq Composite Index increased 0.02%.
The MSCI Asean Index has dropped 0.5% this month and is poised for the third monthly decline and its longest losing streak since an 8.4%, four-month rout that ended in November 2016.
US growth came in at 2.3% in the 1Q2018, down from 2.9% in the 4Q2017, but better than analyst expectations.
Rising costs, inflation on radar as U.S. earnings season unfolds. In the latest week, several companies warned about or cited higher costs – Caterpillar on higher prices for steel, Alphabet on rising costs related to marketing and acquiring streaming rights, while Procter & Gamble cited higher commodities and transportation costs.
U.S. President Donald Trump on Saturday threatened to shut down the federal government in September if Congress did not provide more funding to build a wall on the border with Mexico.
Britain’s interior minister, Amber Rudd, has resigned. Meanwhile, Prime Minister Theresa May’s Conservative Party could be let down at local government elections this week, but are not expected to trigger her downfall.
Twitter Inc sold Cambridge Analytica researcher public data access.
Walmart Inc is in talks to merge its UK arm ASDA with British retailer J Sainsbury Plc. Walmart is also looking to acquire a majority stake in India’s leading online retailer Flipkart for US$10-12bn.
T-Mobile US Inc to buy Sprint Corp for US$26.5bn in bet on an America First 5G deal.
Prologis Inc will acquire DCT Industrial Trust Inc for US$8.4bn.
Baidu entered into definitive agreements to divest financial services business.
Noble Group is going ahead with special general meeting to seek approval on sale of vessel.
Vard Holdings Limited secures 170m euro contract from Prysmian Group.
SIA Engineering Company Limited and Cebu Air Inc have entered into a non-binding letter of intent to further collaborate to expand maintenance, repair and overhaul (MRO) services in the Philippines.
Keppel Corporation has inked a non-binding memorandum of understanding (MOU) with Filinvest Development Corporation (Filinvest), a conglomerate in the Philippines, to develop solutions for sustainable urbanisation in the country.
Mapletree Investments has entered into a cooperation pact with Chinese courier group SF Express to establish a long-term strategic partnership to collaborate in logistics network.
Source: Bloomberg, Channel NewsAsia, The Business Times, SGX Masnet, Reuters, PSR
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
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