Towards Financial Freedom
DBS Equity Research: Wired Daily 29 Jan 2016
SPH - Upgrade to HOLD; negatives priced in
Yoma - Potential earnings recovery post elections and relaxation of foreign ownership of property. Maintain BUY, TP S$0.78.
We upgrade SPH from FULLY VALUED to HOLD as we now believe the current share price has priced in negatives. We have previously downgraded the stock on sluggish print ad growth outlook on the back of slower GDP growth, leading to cuts in DPS. Since our downgrade, share price has declined by c.9%. We believe these negatives are now largely reflected in the current share price. TP of S$3.51 based on sum-of-parts.
Yoma Strategic Holdingsreported 9M15 net profit +8% yo-y from fair value gain of telecom tower business; core net profit -81% y-o-y. Property segment continue to show weakness offset by non-property segment which increased three folds. Potential earnings recovery post elections and relaxation of foreign ownership of property. Maintain BUY, TP S$0.78.
4Q15 DPU of 3.01Scts (-3.8% y-o-y) for CDL Hospitality Trusts in line. Declines in contribution from Singapore partly offset by boost from acquisitions in Japan and UK. Maintain BUY, TP S$1.54.
OUE Commercial REITreported 4Q15 DPU of 1.36 Scts, above expectations. Results were boosted by acquisition of One Raffles Place. Headwinds going into FY16 are expected to partially mitigated by proactive leasing management. Maintain HOLD with revised TP of S$0.65 (Prev S$0.67).
Marina Bay Sands (MBS) was hit by bad VIP luck with adjusted EBITDA down 35% y-o-y. Genting Singapore is likely to report weak VIP performance given more cautious stance on extending credit. Maintain HOLD, TP S$0.76.
Jumbo Group is a leading F&B group in Singapore widely recognised for its signature Chili Crab dish. It currently operates five restaurant brands through 14 outlets in Singapore and three outlets in Shanghai, China. Growth underpinned by new outlets, M&A and higher productivity from existing operations. Jumbo targets to open at least four new outlets in Singapore and China over the next two years. Jumbo currently trades at 24.1x FY16F PE, below Singaporelisted restaurant / QSR / food retailer peer average of 27-29x PE but above regional peers' 21-24x. Our fair value based on 28x FY16F PE is S$0.53.
SATSis proposing to sell the property located at 22 Senoko Way to Neo Group, through its subsidiary Thong Siek Food Industry, for S$15m. The net book value and net tangible value of the property as at 30 September 2015 were approximately S$5.8m. The existing premises at 14/14A Senoko Way for Neo Group is smaller and has reached maximum utilisation.
Pacific Andes Resources Development had informed bond investors the company was "not in a position to commit" to the payment of the next coupon on Jan 30, 2016, "in a timely manner". Its holding company, Pacific Andes International Holdings, is exploring the sale of China Fishery's Peruvian business, and has received bids by two buyers at an indicative enterprise value of US$1.7bn.
Job growth in Singapore in the whole of 2015 was smaller than the gain made in just a quarter the year before. Total employment rose 31,800 last year, a 12-year low. The number was 130,100 in 2014, or an average 32,525 a quarter. Employment growth for the full year was almost flat (0.9%), thanks to a soft economy and tighter supply of foreign workers. The jobless rate for residents slipped to 2.9% in December from 3% in September. The total unemployment rate dipped to 1.9% from 2% in the same period.
US stocks rose as energy stocks gained from a rise in oil price and investors digested earnings positive earnings from companies such as Facebook Inc. Developing-nation equities rose on speculation the Federal Reserve will hold off on more policy tightening anytime soon. Oil price rose amid reports that Russia was willing to meet with OPEC next month to coordinate policy on crude production. However, this was denied by OPEC representatives, while a Gulf member said the group's de-facto leader Saudi Arabia had no proposal to trim production by 5%, as reported by Russian news agency Interfax. Amazon.com Inc. tumbled in extended trade after its earnings trailed estimates.
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....
