Daily Morning Note – 30 May 2019
WEEKLY MARKET OUTLOOK WEBINAR
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YOUR PHILLIP SUMMARY
Stocks in Asia were set to slip on Wednesday following a overnight session on Wall Street that saw the Dow Jones Industrial Average dropping more than 200 points. Futures pointed to a lower open for the Nikkei 225 in Japan.
Trade war tensions rise as the biggest Chinese newspaper, the People’s Daily, explicitly warned the U.S. on Wednesday that China would cut off rare earth minerals as a countermeasure in the escalated trade battle, using an expression the publication has only used twice in history, both of which involved full-on wars. In addition, the US released a list of countries – including Malaysia and Singapore – that it would scrutinise for unfair currency practices.
TECHNICAL PULSE
Starbucks Corp
Current Sentiment: BULLISH
Starbucks has been a raging bull since the mid of 2018. Based on several technical factors, the stock will most likely continue its bullish move.
RESEARCH REPORT
Clearbridge Health Limited – Ramping up
Recommendation: BUY (Maintained), Last Close Price: S$0.15
Target Price: S$0.28 (unchanged), Analyst: Phillip Research Team
– 1Q19 revenue/PATMI made up 7.4%/0.3% of our full-year estimates.
– Healthcare system revenue surged 892% YoY to S$1.3mn.
– Medical clinics and centres revenue grew 267% YoY to S$0.9mn.
– We expect higher revenue contribution from the new acquisitions and business
expansions to kick in from 2Q19 onwards to reach our FY19e earnings
estimates.
– Maintain Buy with an unchanged TP of S$0.28.
Astrea IV – ASTLC 4 MTGE
Recommendation: Not Rated, Analyst: Natalie Ong
– Fitch upgraded Class A-1 bonds from Asf to A+sf, and affirmed class A-2 and
class B bond’s Asf and BBBsf ratings.
– NAV and Undrawn Capital Commitments as at 31 March 2019 stand at
US$929mn and US$127mn respectively.
– Available cash flow on for the period ended 14 December 2018 totalled
US$148m; used to satisfy operating expenses, interest payments to
bondholders, payments to Reserve Accounts and for Liquidity and Capital Call
Facilities.
– Residual cash of US$91.1mn paid out to Sponsor (equity holder) makes up
14.5% of total equity.
BREAKING NEWS
Hyflux is in talks with seven different parties for a potential cash infusion, and plans to enter into a binding term sheet with one of them by mid-June. The distressed water cleaning firm will meet stakeholders and draw up terms of a restructuring scheme by the end of June, and aims to apply for leave to convene scheme meetings for creditors in July.
Mainboard-Listed United Food Holdings saw loss attributable to owners widen to 27.6 million yuan (S$5.5 million) for the three months ended March 31 from a loss of 13.44 million yuan in the year-ago period, the firm said in its results release on Wednesday. This was despite revenue rising to 10 million yuan, more than 3.5 times the 2.82 million yuan figure in the year-ago period. The revenue was mainly from the group’s trading segment. The firm is also a producer and supplier of soya bean products and animal feed in China.
Mainboard-listed Valuetronics Holdings’ net profit declined 2.6 per cent to HK$199.5 million (S$35.1 million) for the year ended March 31, from HK$204.7 million a year ago, amid mixed performance from its two business segments.
Myanmar-Focused Yoma Strategic Holdings on Wednesday posted a fourth-quarter net profit of US$25.7 million, from US$432,000 a year ago, mainly due to net fair value gains from investment properties. This was partially offset by a rise in financing costs from higher borrowings and the rising interest rate environment, the group said in a regulatory filing.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, 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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