DBS Equity Research: Wired Daily 26 Nov 2014

kiasutrader

Publish date: Wed, 26 Nov 2014, 11:57 AM

IHH Healthcare - 3Q growth continues in a lull quarter. Maintain HOLD, target price unchanged at RM4.54 due to rich valuations

3Q core profits for IHH Healthcare in line, up 21% y-o-y. Parkway Pantai continues to drive group EBITDA forward, while Acibadem was impacted by weak Turkish Lira. We project stable growth for IHH to continue, driven largely by its key markets, particularly in Singapore and Malaysia. Growth in Turkey should also continue, though this could be partially negated by a weaker TRY. We expect growth to remain relatively robust and retain our projected earnings growth of 25%/18%/19% for FY14F/15F/16F, driven by the continued ramp-up of new hospitals, coupled with revenue intensities and price increases. Maintain HOLD, target price unchanged at RM4.54 due to rich valuations of 43x/36x FY15F/16F PE.

From Nov 26, Suntec real estate investment trust (Reit) will join the MSCI Singapore Index, replacing commodity play Olam International. PACC Offshore Services Holdings, Indonesian food producer Japfa, hotel and serviced residence group Frasers Hospitality Trust and Japanese golf course owner Accordia Golf Trust will replace Stamford Land Corporation, Suntec Reit and Swiber Holdings in the MSCI Singapore Small Cap Index. The MSCI Singapore Small-Cap Index is designed to measure the

performance of the small cap segment of the Singapore market. With 85 constituents, the index represents approximately 14% of the free float-adjusted market capitalisation of the Singapore equity universe.

Mapletree Logistics Trust (MLT) announced that 723,085 new units in MLT have been issued to the Manager at S$1.1535 per Unit. The Units were for payment of acquisition fee in respect of the respective acquisition of Mapletree Yangshan Bonded Logistics Park and Mapletree Zhengzhou Logistics Park in China.

Singapore's overall unit labour cost rose 4.4% in the third quarter of 2014 - its fastest pace in over a year - as the effects of restructuring policies that are keeping the labour market tight continue to work their way through the economy. Labour productivity contracted for a second straight quarter in Q3. Overall labour productivity fell 0.8% in Q3 from a year ago, though smaller than Q2's 1.4% drop.

The full year's NODX, projected in August to fall 1 to 2%, has been revised to a 1 to 1.5% dip. The growth forecast for total trade in 2014 has been adjusted from 1.5 to 2.5% to 1.5 to 2%. After a likely dip in 2014, NODX is tipped to rise 1 to 3% next year. Overall trade is projected to expand this year, but this growth is expected to ease to 0 to 2% in 2015. The forecasts were unveiled yesterday by International Enterprise (IE) Singapore. IE Singapore said the projections for 2015 are underpinned by expectations of higher global economic and trade growth, an improved US economy and a recovery - though a weak one - in the Eurozone in the new year. These will be balanced by a likely-sluggish Japanese economy and slower growth in China.

US stocks ended little changed as the US economy grew more than expected last quarter but soft readings on consumer confidence and house prices kept major indexes in a tight range. 3Q GDP growth was revised up to 3.9% yo-y from 3.5%, mainly because of a bigger-than-expected jump in consumer spending, bolstered by a modest increase in reported business investment. This comes on the heels of a 4.6% jump in GDP in 2Q14, and after a 2.1% drop in 1Q14 GDP growth in 1Q as a result of the freezing winter.

Source: DBS

IHH (Q0F)Suntec Reit (T82U)Olam Intl (O32)Japfa (UD2)Frasers HTrust (ACV)Stamford Land (H07)Mapletree Log Tr (M44U)

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