Daily Morning Note – 8 March 2019


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Stocks in Asia tracked declines in the U.S. after a European Central Bank cut to economic forecasts reignited concern on global growth and sent global bond yields lower. The euro fell to the lowest since 2017.

Shares in Sydney and Tokyo retreated after the S&P 500 Index sank for a fourth day, with Amazon, Microsoft, Apple and Facebook the biggest drags. The gauge closed just below its closely watched 200-day moving average that has provided support in the past. Australian bonds tracked gains in Treasuries and bunds, while the dollar steadied after gaining for a seventh day.


SHS Holdings Limited – Expecting further delays

Recommendation: NEUTRAL (Maintained), Last Closing Price: S$0.19

Target Price: S$0.194, Analyst: Alvin Chia

– Revenue disappointed by S$3.4mn or 7%. The company swung into a wider than expected
net loss of S$12mn compared to our estimated loss of S$7mn. Operating expenses and a
S$5mn write-off was higher than expected.

– The corrosion prevention and solar segment posted healthy growth YoY helping alleviate
weakness in engineering and construction.

– We revised FY19e revenue downwards by 9% and a net loss of S$183k. We have changed our
valuation method to 0.7x P/B in line with peer valuations. Downgrade to NEUTRAL with a
lower target price of S$0.194 (prev.S$0.24).

Y Ventures Group Ltd – More controlled expansion

Recommendation: BUY(Maintained), Last Closing Price: S$0.078

Target Price: S$0.160, Analyst: Paul Chew

– Results were below expectations due to poor sales of non-book products, weaker gross
margins, higher operating expenses and write-offs in inventory and bad debts.

– 80% of FY18 revenue is from the sale of books and YVEN has expanded their publishing
principals from 1 to 8.

– A major change is strategy is to faster monetize their data analytics capabilities through the
sale of services.

– We lowered FY19e earnings to marginal profitability. Any turnaround in profits is earmarked
in FY20e. Our target price of S$0.16 will be based off FY20e earnings and PE of 30x. This is
priced against other e-retailer comparables.


Singtel is subscribing to 170 million new shares at 220 rupees apiece, or 37.5 billion rupees (S$726.5 million), in the latest rights issue by its regional associate – India’s Bharti Airtel (Airtel). This represents 15 per cent of the 250 billion rupee rights issue. GIC will subscribe to about 50 billion rupees worth of rights shares, which were renounced by existing shareholder Bharti Telecom.

Water services company China International on Thursday said that there has “regrettably” been a lapse in internal controls in conducting its various share buybacks from Dec 21, 2017 to Oct 16, 2018, which led the company to inadvertently breach listing rules of the Singapore Exchange.

American households saw their net worth plummet at the end of 2018 amid a rout on Wall Street, the biggest tumble since the global financial crisis, the Federal Reserve reported Thursday.

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

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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