Towards Financial Freedom
SGX - Sequentially flat earnings due to weak securities trading
Securities ADT weakish, but we assume some pick-up in 2HFY13. SGX reported 2QFY13 net profit of S$76.3m, up 17% YoY and up 3% QoQ. 1HFY13 net profit of S$150.6m represents 48% of our full year forecast. Whilst 2QFY13 securities market average daily turnover (ADT) of S$1.21b is lower than our FY13 assumption of S$1.5b, we assume there will be some strengthening in ADT in the months ahead. Dec 12 derivatives market volume was up both YoY and MoM, and hence a positive, However, 1HFY13 futures turnover of 38.4m is basically in line with our FY13F of 80m. We maintain our target price of S$6.50, which is pegged to 21x FY14 EPS - we ascribe a lower PE than the historical average of 24x due to the relatively volatile market situation. We do not see any catalyst driving SGX share price upwards going forward. Even the forecast FY13 dividend yield of 3.5% is not exciting. SGX remains a SELL.
Derivatives growth was strong, but it has a smaller revenue share than securities.Securities revenue, which accounted for 36% share of revenue, was up 9% YoY, and SGX highlighted that it continues to make good progress engaging retail customers. However, turnover velocity was down 3 ppt YoY to 44%, largely the consequence of international companies turnover velocity down 9 ppt YoY to 64%. What is more exciting is the 21% YoY growth in derivatives revenue, supported by strong expansion in the China A50 futures and Japan Nikkei 225 options. However, the overall impact on revenue is more muted as derivatives share of revenue is a smaller 28%.
Our FY13 earnings forecast is 2% lower than consensus expectation. SGX is guiding FY13 expenses of between S$295m and S$305m, and our forecast is closer to the top end of the range. This partly explains our FY13 earnings forecast being 2% lower than consensus expectations.
SGX declared an interim dividend of 4S¢ per share. We forecast FY13 total dividends of 27S¢, unchanged from FY12. This gives a yield of 3.5%, which is respectable but not exciting.
Derivatives growth was strong, but it has a smaller revenue share than securities.Securities revenue, which accounted for 36% share of revenue, was up 9% YoY, and SGX highlighted that it continues to make good progress engaging retail customers. However, turnover velocity was down 3 ppt YoY to 44%, largely the consequence of international companies turnover velocity down 9 ppt YoY to 64%. What is more exciting is the 21% YoY growth in derivatives revenue, supported by strong expansion in the China A50 futures and Japan Nikkei 225 options. However, the overall impact on revenue is more muted as derivatives share of revenue is a smaller 28%.
Our FY13 earnings forecast is 2% lower than consensus expectation. SGX is guiding FY13 expenses of between S$295m and S$305m, and our forecast is closer to the top end of the range. This partly explains our FY13 earnings forecast being 2% lower than consensus expectations.
SGX declared an interim dividend of 4S¢ per share. We forecast FY13 total dividends of 27S¢, unchanged from FY12. This gives a yield of 3.5%, which is respectable but not exciting.
Source: OSK
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Towards Financial Freedom
Duty Free International Ltd. - A duty-free giant in the making
Created by kiasutrader | Oct 17, 2016
Cityneon Holdings - 'Avengers' showcasing in the Land Down Under
Created by kiasutrader | Jun 07, 2016
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
1
SGX Market Updates
REIT Watch - S-REITs Navigate a Challenging 2024 With Mixed Returns
2
RHB Investment Research Reports
ComfortDelGro - Platform Fee Hike Is Earnings Neutral; Reiterate BUY
3
THE SINGAPOREAN INVESTOR
Frasers Centrepoint Trust's Annual Report for FY2023/24 - Key Highlights to Take Note of
4
CEO Morning Brief
5
CEO Morning Brief
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
