Daily Morning Note – 6 August 2018

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YOUR PHILLIP SUMMARY

The Dow Jones Industrial Average rose on Friday, led by gains in Apple and IBM, as investors pored through newly proposed tariffs on U.S. goods by China and fresh jobs data. The U.S. government reported that payroll growth slowed in July. Total nonfarm payrolls increased by 157,000 for the month, below the 190,000 expected by economists polled by Reuters. Unemployment rate fell to 3.9 percent, as expected, and is around its lowest level in nearly 50 years. Meanwhile, the Chinese government that Beijing will impose tariffs on roughly $60 billion in U.S. goods.

Over the weekend, a senior White House administration official commented The White House is reserving the right to impose the tariffs on vehicles made in Canada.

Back in Singapore, UOL launched The Tre Ver over the weekend, selling 150 out of 200 Phase 1 units launched on Saturday. An additional 150 units in Phase 2 was launched on Sunday, though no sales figures are available yet.


RESEARCH REPORTS

DBS Group Holdings – NIM at 2-year high and guided higher
Recommendation: BUY (Upgraded), Last Done price: S$26.50
Target Price: S$33.32, Analyst: Tin Min Ying
– PATMI of S$1.33bn missed our forecast by 7%.
– The downside surprise came mainly from higher than expected income tax
expense. However, NII and profit before tax was in line with our expectations.
– The standout performers were higher NIMs and loans growth.
– 1H18 dividends at 60 cents/share (+82% YoY), in line with guidance. DBS is
now trading at a dividend yield of 4.5%.
– We tweaked our target price to S$33.32 (previously S$32.70). Our rating has
been upgraded to BUY due to higher book value assumption.


BREAKING NEWS

Profit Guidance: China International Holdings Limited expects to report a loss for 2Q FY2018. Further details of the Group’s financial performance will be disclosed when the Company announces its unaudited financial results for 2Q FY2018 on or before 14 August 2018.

Noble Resources International Pte Limited, a subsidiary of Noble Group Limited, has been filed a claim in the Supreme Court of New South Wales, Australia on 3 August 2018, against Gloucester Coal Limited and Yancoal Australia Limited, seeking
damages currently estimated as at least US$127 million arising from breaches of contractual obligations under a marketing services agreement entered into in 2011.

Profit Guidance: BRC Asia Limited expects to report a net loss for the third quarter and nine months ended 30 June 2018. The Group’s loss is mainly due to the consolidation of accounts resulting from the acquisition of Lee Metal Group Limited.

Profit Guidance: Metech International Limited expects to report a net loss for the quarter and financial year ended 30 June 2018. The losses were in large part due to sharp decline in revenue and profit margins experienced by both the Electronic Waste Management and Supply Chain Management business in the 4th quarter of FY2018.

Perennial Q2 profit halves to S$8.6m with Capitol fully consolidated.

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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