SGX Stocks and Warrants

Author: kimeng   |   Latest post: Tue, 14 Nov 2017, 10:26 AM


Midas Holdings: 9M17 Within Expectations

Author: kimeng   |  Publish date: Tue, 14 Nov 2017, 10:26 AM

Midas Holdings Limited’s (Midas) 3Q17 revenue improved 11.5% YoY to RMB411.0m, mainly due to a 16.9% growth in its Aluminium Alloy Extruded Products (AEP) revenue to RMB347.2m on higher export sales.

Midas’ 3Q17 overall gross margin improved 3.6ppt YoY to 28.2%, lifted mainly by a 3.1ppt improvement in AEP’s gross margin to 27.9%, and a 4.4ppt improvement in its Aluminium Alloy Stretched Plates (AASP) to 29.0%.

In-line with higher business volume, 3Q17 operating expenses rose 18.1% YoY to RMB72.9m on higher transportation costs, as well as a 47.6% increase in finance costs on higher interest rates.

Share of profits from an associate (NPRT) also plunged 40.4% YoY to RMB7.4m, mainly due to decreased delivery to its customers during 3Q17. Consequently, coupled with a 30.6% YoY decline in income tax, 3Q17 PATMI grew 6.6% to RMB24.1m.

For 9M17, PATMI jumped 111.3% YoY to RMB108.3m, forming 76.9% of our FY17 forecast. The earnings growth in 9M17 was largely due to inclusion of AASP business, coupled with an improvement in overall gross margin.

During 3Q17, Midas’ AEP segment secured three supply contracts worth RMB184.4m that are slated for delivery in FY17, while NPRT secured three metro train car supply contracts worth RMB2.4b, with deliveries scheduled between Jun 18 and Mar 21.

On in-line 9M17 results, we maintain HOLD on Midas, with an unchanged FV of S$0.225.

Source: OCBC Research - 14 Nov 2017

Labels: Midas
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Golden Agri Resources: Results in Line With Our Expectations

Author: kimeng   |  Publish date: Tue, 14 Nov 2017, 10:25 AM

Golden Agri Resources (GAR) saw a 2.9% YoY fall in revenue to US$1.8b and a 80.1% drop in net profit to US$43.7m in 3Q17. However, excluding one-off items, underlying profit rose 3.0% to US$79.5m in 3Q17.

In 9M17, PATMI was 70.8% lower at US$103m, accounting for 70% of our full year estimates but only 58% of Bloomberg’s FY17F consensus; the significant drop was mainly because of the recognition of deferred tax income on revaluation of US$242m in the previous period. Underlying profit for 9M17 was 80.3% higher at US$217m.

An interim dividend of 0.693 S cents/share has been declared, representing 30% of GAR’s underlying profit.

Pending more details from an analyst briefing later, we maintain our HOLD rating but put our fair value estimate of S$0.35 under review.

Source: OCBC Research - 14 Nov 2017

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Singapore Myanmar Investco: Revenue Up 21% YoY

Author: kimeng   |  Publish date: Tue, 14 Nov 2017, 10:24 AM

Singapore Myanmar Investco (SMI) reported its 1H18 results yesterday evening. Revenue grew 20.9% to US$11.6m, underpinned by healthy growth in Duty Free & Fashion Retail and Construction Services.

Gross profit increased 52.5% YoY to US$3.1m, supported by an increase in gross profit margin from 21.1% in 1H17 to 26.6%. The group recorded a net loss of US$2.1m from continuing operations, vs. a net loss of US$1.6m in 1H17.

Part of the increase in net loss was due to one-off items in the previous half-year including a US$300k write-back of over-accrual of bonus and a US$137k write-back of over-accrual of corporate secretarial costs in 1H17.

Pending further details and a change in covering analyst, we maintain BUY but place our S$0.97 fair value estimate (16x FY19F; year ending Mar 2019) under review.

Source: OCBC Research - 14 Nov 2017

Labels: SingMyanmar
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Health Management Intl: Cease Coverage

Author: kimeng   |  Publish date: Tue, 14 Nov 2017, 10:23 AM

  • Healthy set of 1QFY18 results
  • Heliconia to take a 2.0% stake
  • Expansion underway

Results In-line

Health Management International’s (HMI) 1QFY18 results were largely in-line with our expectations. Revenue grew 6.9% YoY to RM117.1m, forming 24.8% of our full-year forecast. This was achieved on the back of higher patient load and average bill size across the group’s two hospitals, as well as higher student headcount in the group’s education business.

Notably, the average inpatient and outpatient bill sizes have both increased YoY, growing 3.6% and 12.2% to RM7.6k and RM217, respectively. EBITDA grew 11.0% YoY to RM28.7m, backed by improving revenue intensity and cost management. PATMI increased 123.4% YoY to RM13.8m, forming 23.9% of our FY18 forecast. This was in part due to the consolidation exercise that occurred earlier this year, causing 100% of the group’s net profit to become attributable to shareholders.

~S$11m Placement Exercise to Heliconia

HMI also announced the signing of an agreement that would induct Heliconia Capital Management Pte Ltd (Heliconia), a wholly-owned subsidiary of Temasek, as a strategic shareholder through a ~S$11.0m placement, or a 2.0% stake in the enlarged share capital of the group. HMI will be issuing 16.9m new ordinary shares at S$0.65 per share, which represents a slight discount of 0.76% to the closing price of HMI shares traded on 13 Nov. We note that this move allows HMI access to Heliconia’s network and resources as the group executes its growth strategies.

Ceasing Coverage

Looking forward, we note that management remains focused on tapping the rising demand for healthcare across the region. At Mahkota, the group remains on track to increase operational bed capacity from 266 to 300 beds in FY18. At Regency, a new hospital extension block will commence construction in FY18, pending relevant approvals.

These initiatives are aligned to Malaysia’s national economic blueprint, where healthcare travel has been identified as one of the National Key Economic Areas in pushing the country towards a high-income nation by 2020.

Notwithstanding the above, due to an internal reallocation of resources, we are ceasing coverage on the stock.

Source: OCBC Research - 14 Nov 2017

Labels: HMI
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Wilmar: Steady Performance

Author: kimeng   |  Publish date: Tue, 14 Nov 2017, 10:23 AM

  • Results in line
  • Mixed performance in segments
  • Maintain HOLD

3Q17 Results Within Expectations

Wilmar reported a 0.4% YoY rise in revenue to US$11.1b in 3Q17, supported by increased sales from Oilseeds & Grains. Net profit fell 5.7% YoY to US$370.0m while core net profit decreased 15.9% to US$323.7m in 3Q17.

Results were within expectations; 9M17 revenue and net profit accounted for 74% and 70% of our full year estimates, respectively. The good performance in Oilseeds & Grains and strong contributions from associates were offset by weaker results in the Tropical Oils and Sugar businesses. Indeed, Oilseeds & Grains registered pre-tax profit of US$253.7m in 3Q17 (3Q16: US$248.1m), driven by higher crush volume and good crush margins.

JVs and associates also saw pre-tax profit increasing 79% to US$51.3m (3Q16: US$28.6m), mainly from the group’s associates in India, Eastern Europe and Morocco.

Tropical Oils Affected by Lower Downstream Margins

In the Tropical Oils segment, pre-tax profit in 3Q17 fell 51% YoY to US$83.1m. Plantation production yield and volume improved during the quarter, but lower processing margins affected the overall performance of the segment. As for the Sugar business, pre-tax profit declined 13% YoY to US$75.2m due to timing effect from the new Australian Sugar marketing programme, in which certain proportion of sugar produced would only be sold in the subsequent quarters. This was partly mitigated by better performance in the merchandising business.

HOLD With FV of S$3.51

On the balance sheet front, net gearing improved from 0.8x in FY16 to 0.7x in 3Q17, while the group also generated US$1.56b in net cash flow from operating activities in 9M17, resulting in free cash flow of US$1.23b. As at 3Q17, 58% of the group’s total credit facilities of US$32.3b were utilized, reflecting the ample financial cushion available for the firm.

Looking ahead, management expects the good performance in the Oilseeds & Grains segment to continue into 4Q17, with crush margins and volume likely to remain positive. Performance of the other major business segments is expected to be “satisfactory”.

We tweak our estimates and roll over our valuations to FY18 earnings, and our FV estimate eases from S$3.66 to S$3.51. Maintain HOLD.

Source: OCBC Research - 14 Nov 2017

Labels: Wilmar Intl
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ST Engineering: Weak Marine Sector Still a Drag in 3Q17

Author: kimeng   |  Publish date: Wed, 8 Nov 2017, 09:43 AM

Singapore Technologies Engineering’s (STE) 3Q17 revenue grew slightly by 0.5% YoY to S$1621.8m, as higher revenues from the Electronics (+6%) and Aerospace (+8%) sectors were offset by the Marine (-22%) and Land Systems (-5%) sectors.

Due to the absence of prior year’s impairment of asset carry values and the provision of closure costs of subsidiaries located in China for Land Systems sector, STE’s 3Q17 PBT jumped 52.8% YoY to S$162.9m.

By key business sectors, STE’s 3Q17 group PBT margin improved 3.4ppt YoY to 10.0%, mainly due to the turnaround in Land Systems sector without the one-off charge incurred for its China Specialty Vehicle business. Consequently, 3Q17 PATMI surged 67.5% YoY to S$128.4m. Stripping out the S$61.1m impairment charge recorded in 3Q16, STE’s 3Q17 core PATMI instead fell 6.8% YoY to S$128.4m.

For 9M17, revenue rose 1.1% YoY to S$4917.2m, and core PATMI came in within our expectations as it declined 8.5% YoY to S$343.4m, which formed 76.6% of our FY17 forecast. The Marine sector continues to be a drag on earnings with weaker performance across its three business groups.

Pending an analyst briefing, maintain HOLD but put our FV of S$3.70 under review.

Source: OCBC Research - 8 Nov 2017

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