Daily Morning Note – 8 August 2018


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U.S. stocks edged higher, pushing their winning streak to four days amid optimism U.S. growth can continue. The S&P 500 Index closed at the highest level since its Jan. 26 record. Gains faded in the final half hour of trading as investors moved out of rate-sensitive shares amid a rise in Treasury yields. Industrial and energy stocks paced gains.

In Asia, the People’s Bank of China urged some lenders to prevent any “herd behavior” and momentum-chasing moves in the currency market. Any pressure building on the yuan will need to be released in a timely manner and China will not work against market forces, the official told the lenders, according to the people. It’s the latest bid by the central bank to stabilize the currency, which has tumbled more than 6 percent in the last three months.


Nam Lee Pressed Metal Industries – Attractive yield with downside capped by cash hoard
Recommendation: Buy (Maintained), Last Close Price: $0.365
Target Price: $0.51 (previously $0.56), Analyst: Richard Leow
– 9M18 revenue and PATMI met 69% and 73% respectively, of our full year
– Maintain Buy; new target price of $0.51 (previously $0.56) due to trade war
concerns and slower recovery in construction sector

Raffles Medical Group Ltd -Expenses coping well to softer conditions
Recommendation: Accumulate (Maintained), Last Close Price: $1.11
Target Price: $1.32, Analyst: Phillip Research Team
– 2Q18 PATMI was within expectations, but revenue trending below our
– Cost is coping well with the softer revenue growth as margins expanded
– Clinic revenues rising but offset by softer hospital revenues
– Maintain ACCUMULATE with unchanged TP of S$1.32. Our earnings forecast is

Oversea-Chinese Banking Corp Ltd – NIM expansion yet to be unleashed
Recommendation: Buy (Upgraded), Last Done price: S$11.58
Target Price: S$14.90, Analyst: Tin Min Ying
– 2Q18 PATMI exceeded our expectations by 4.6%.
– Loans grew 10% YoY, mainly driven to housing loans recovered to 8% YoY.
– NIM’s increase by only 2bps YoY to 1.67%. The higher NIM in Singapore and
Malaysia was offset by lower NIM in Indonesia and Hong Kong.
– Allowances dropped 88% YoY. The worst is over for the O&G and shipping
– Our rating has been upgraded to BUY with an unchanged target price of

Asian Pay Television Trust – Dividends to be cut and subscribers declined
Recommendation: Reduce (Downgraded), Last Done price: S$0.405
Target Price: S$0.350, Analyst: Paul Chew
– 1Q18 revenue and EBITDA was weaker than expected due to a 2.5% point hit
on forex.
– All our worst fears snowballed into dividends being cut for FY19e, capex
guidance raised until FY20 and cable pay-TV subscribers fell materially.
– We have downgraded our rating to REDUCE and cut our target price to S$0.35
(previously S$0.52). Our dividend per unit for FY19e slashed to S$0.035
(previously S$0.065).


Sembcorp Ind Ltd – Daily timeframe – Bullish
– Buyers finally broke price above the 5-week range high of 2.72 on 07/08/18
signals some sign of strength.
– Expect price to rebound higher next to test the 2.92 resistance area followed
by 3.00.

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


ComfortDelGro Corporation Limited has entered into an agreement to acquire all the issued shares of FCL Holdings Pty Ltd. FCL operates a Sydney Metropolitan Bus Service Contract with Transport for New South Wales (“TfNSW”) in northern Sydney and five Rural & Regional Bus Service Contracts with TfNSW in North Coast and New England. FCL manages 8 depots and operates a fleet of 220 buses.

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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