Towards Financial Freedom
DBS Equity Research : Wired Daily 14 Apr 2015
M1 - Downgrade to HOLD on uncertainty, limited upside
Keppel REIT - Laggard to office peers; upgrade to BUY, TPS$1.32
Digital is becoming a key driver in the future of banking. Focusing on areas like liquidity, capital and asset quality are no longer enough. Recognising that Digital disruption will challenge the business model of banking in fundamental ways, we observed that Singapore banks are clear winners, followed by Malaysian banks in the digital banking landscape in SE Asia. Indonesian banks have huge potential. Indonesian while the least prepared are the smaller banks.
1Q15 net profit of S$45.7m (+6.8%, +2.7% q-o-q) for M1 was in line with our expectations. Higher handset sales drove up revenues while IDD revenues fell. Postpaid ARPU was flat despite higher tariff. The stock has given a return of 22% in the last 12 months and only offers 3% upside now and 5% dividend at current price. Downgrade to HOLD on uncertainty and limited upside. TP is intact at S$4.05.
1Q15 results for Keppel REIT in line. Distributable income shrank 2% y-o-y to S$54m in the quarter, but DPU fell by a larger quantum of 13.7% on the back of a larger unit base post-acquisition of Marina Bay Financial Center Tower 3. However, earnings jumped 13% q-o-q. Fears of earnings drop-off from OFC priced-in, and earnings have bottomed out. K-REIT is more resilient to new supply than peers as its asset portfolio comprises some of the most sought after properties in Singapore. It is also a laggard to office peers; upgrade to BUY, TPS$1.32 (Prev S$ 1.29).
SPH REIT's2Q15 results in line. Paragon continues to outperform, supporting our view that Orchard Road malls will fare better in the current tough retail landscape. Maintain HOLD, TP S$1.03.
In line with the Company's strategic growth plans, Civmec has agreed to enter into a due diligence phase for the acquisition of PT Global Industries Asia Pacific (a Technip subsidiary). The terms include a long-term collaboration agreement with Technip for services and facilities for current and future project work globally. Technip is a world leader in project management, engineering and construction for the energy sector.
Global Logistic Properties has capitalized on market conditions to acquire an attractively-located land parcel in Cajamar, São Paulo. The strategic development site is fully permitted and expected to provide 76,000 sqm (818,000 sq ft) of high quality logistics space upon its completion by March 2016 (4Q FY2016).
PEChas been awarded a new contract worth S$176m from a new client in Abu Dhabi. The group will provide engineering, procurement and construction (EPC) works for a new oil storage terminal in Fujairah, the United Arab Emirates (UAE). Located near the Port of Fujairah, the terminal comprises product storage facilities, product pumping facilities and utilities. The project is expected to be completed by March 2017. The client is a prominent terminal and investment company in the UAE. This is PEC's second major win from the Middle East this year.
OKP Holdings has been awarded a S$20.38m contract from JTC Corporation for the construction of roads, drains, sewers and soil improvement works at Tuas South Avenue 7/14. This contract updates OKP's net construction order book to S$317.2m, extending till 2019.
Singapore's central bank has kept its monetary policy unchanged, keeping the Singapore dollar on a "modest and gradual" appreciating path, with no change to the slope and width of the policy band and the level at which it is centred.
The Singapore economy grew by 2.1% y-o-y in the first quarter of 2015 based on advance estimates, the same rate of growth as that achieved in the previous quarter. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded at a slower pace of 1.1% compared to the 4.9% in the preceding quarter. Q1's growth is at the low end of the official 2015 forecast of 2-4% growth. The key manufacturing sector contracted by 3.4% y-o-y in Q1, following the 1.3% decline in the previous quarter. On a quarter-on-quarter basis, the sector contracted at an annualised rate of 2.3%, extending the decline of 2.5% in the preceding quarter.
Source: DBS
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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....
