Stock Exchange: November 2015

Monday 30 November 2015

Singapore Strategy - OCBC Investment 2015-12-01: Bumpy road ahead, but opportunities exist

SHENG SIONG GROUP LTD OV8.SI CAPITALAND LIMITED C31.SI RAFFLES MEDICAL GROUP LTD R01.SI DBS GROUP HOLDINGS LTD D05.SI QAF LTD Q01.SI

Singapore Strategy: Bumpy road ahead, but opportunities exist

 Softness in 2016

 Volatility is the new norm

 Stick with quality stocks

A year of two halves

2015 was a challenging year of two halves.
The first half benefited from spillover optimism from 2014, but this quickly evaporated as the market entered into the second half of the year. Sentiment was dragged down by several key events including Yuan devaluation, the sell-down in Chinese equities, slower growth from Emerging Markets and weakness in commodities.

ComfortDelGro - RHB invest 2015-11-30: Optimistic On Strong Profit Growth

ComfortDelGro (CD SP) - RHB Invest 2015-11-16: 9M15 Slight Ahead But Growth Is Priced In

COMFORTDELGRO CORPORATION LTD C52.SI

ComfortDelGro (CD SP) - Optimistic On Strong Profit Growth

In line with expected growth in 2016 bus/taxi/rail operations – well supported by bus GCM transition and a drop in competitive intensity for taxis – we upgrade ComfortDelGro to BUY (from Neutral) and raise DCF-based TP to SGD3.60 (from SGD2.86, 23% upside).
It could see a SGD710m cash inflow of SGD710m from a bus assets sale to the LTA.
As management sees limited M&A prospects, its strong net cash balance sheet could translate into higher dividends.

SMRT Corp - RHB Invest 2015-11-30: Waiting For Rail Reforms To Be Unveiled

SMRT CORPORATION LTD S53.SI

SMRT Corp (MRT SP) - Waiting For Rail Reforms To Be Unveiled

We think most negatives, ie higher rail maintenance costs and elevated rail infrastructure capex, are already priced in.
Upgrade SMRT to NEUTRAL (from Sell) and raise TP to SGD1.60 (from SGD1.10, 12% upside), aided by lower WACC and cash inflow from a FY17 bus assets sale.
We have not factored in rail reforms (by 2019 possibly).
A back-of-envelope calculation suggests a 37% rise to our current TP if reforms are implemented in FY19.

Singapore Land Transport - RHB Invest 2015-11-30: 2016 Could Be a Year Of Many (Positive) Changes

COMFORTDELGRO CORPORATION LTD S52.SI SMRT CORPORATION LTD S53.SI

Singapore Land Transport - 2016 Could Be a Year Of Many (Positive) Changes

Amidst expectations of increased pace of reforms, we upgrade Land Transport sector to OVERWEIGHT; we estimate ComfortDelGro and SMRT to receive SGD710m and SGD207m of cash inflow from sale of bus assets.
Competitive intensity in taxi business should drop as Uber/GrabCar are brought under regulatory purview.
There are reasons supporting the implementation of a new rail financing framework before 2019; LTA could provide clarity on rail reforms as early as 2017.

Singapore REITs - Maybank Kim Eng 2015-11-30: Industrials ~ Cleanest Dirty Shirt

AREIT ASCENDAS REAL ESTATE INV TRUST A17U.SI MAPLETREE INDUSTRIAL TRUST ME8U.SI

Industrials: Cleanest Dirty Shirt

SREITs have declined 16% off their Apr15 peaks and are 11% down YTD. Over the same periods, the STI is down 19% and 15%. We maintain that SREITs are in a de-rating phase, more sensitive to growth risks than interest rates.
Compounding weak demand, 2016-18 supply is front loaded but averaging 2.0x historical demand for retail, 1.4x for office and 1.2x for industrial.
Industrial REIT valuations seem to have priced in the negatives. Not so for retail. For office, to a certain extent. Areit & MINT are our recommended picks. Top SELLs: FCT, MCT, CT.

SGX Top Gainers, Top Losers, Top Volume, Top Value & FTSE ST Indices 2015-11-30

FTSE ST Indices 30-November-2015, Monday

STI Index

-3.18
(-0.11%)

2855.94

All-Share Index

-0.28
(-0.04%)

691.17

Mid Cap Index

+1.56
(+0.23%)

672.88

Small Cap Index

-2.15 (-0.53%)

403.52

Fledgling Index

+1.15 (+0.14%)

821.93

Catalist Index

-3.54 (-0.69%)

508.23

Basic

+0.88
(+0.78%)

114.04

China Index

-2.77
(-1.33%)

205.29

China Top Index

-1.01
(-0.59%)

170.41

Consumer Goods Index

-1.45
(-0.34%)

428.93

Consumer Services Index

-0.29
(-0.04%)

751.35

Financials Index

-1.44
(-0.19%)

758.05

Health Care Index

-5.08
(-0.34%)

1469.57

Industrials Index

+3.43
(+0.51%)

670.39

Maritime Index

-1.63
(-0.74%)

218.84

Oil & Gas Index

-5.31
(-1.32%)

395.76

Real Estate Holding

-8.89
(-1.27%)

688.63

Real Estate Index

-2.93
(-0.43%)

685.29

Real Estate Investment

+2.34
(+0.34%)

693.80

Technology Index

+6.35
(+1.99%)

326.19

Telecommunications Inde

+6.73
(+0.68%)

991.37

Utilities Index

-4.76
(-1.10%)

426.05

Sunday 29 November 2015

Property Singapore - UOB Kay Hian Research 2015-11-30: 1H16 Strategy ~ Interest-ing Times For Real Estate

Property Singapore - UOB Kay Hian 2015-10-09: Your Ultimate Guide To Extension Charges

Singapore Property WING TAI HLDGS LTD W05.SI CITY DEVELOPMENTS LIMITEDC09.SI ASCOTT RESIDENCE TRUST A68U.SI MAPLETREE LOGISTICS TRUST M44U.SI CAPITALAND COMMERCIAL TRUST C61U.SI

Property – Singapore 1H16 Strategy: Interest-ing Times For Real Estate

We recommend an OVERWEIGHT stance on the sector as we believe concerns over a rise in interest rates have been overblown.
We prefer developers over REITs.
Developers are trading near undeserving crisis valuations and offer an attractive 6:1 reward-to-risk proposition. S-REIT yield spreads remain the most attractive regionally, with upcycle yield spreads indicating 30% upside potential.
Our top picks are CDL, Wing Tai, ART, MLT and CCT which offer deep-value and diversification.

AIMS AMP - Maybank Kim Eng 2015-11-30: Floor Area to Unearth

AIMS AMP CAP INDUSTRIAL REIT O5RU.SI

AIMS AMP (AAREIT) - Floor Area to Unearth

Fourth-largest industrial SREIT with 60% rental exposure to warehouses, 20% to factories & 20% to business parks.
Forecast FY3/16-18 DPU growth of 1.4%/1.4%/5% on rent escalations & redevelopment project. Potential to increase NLA by 11% from unlocked plot ratios.
Initiate with HOLD, as no immediate catalysts. TP of SGD1.47 based on 7.75% yield target applied to FY3/17 DPU. Risks include 22% exposure to single tenant, CWT.

CapitaLand Mall Trust - OCBC Investment 2015-11-30: A good blue chip name to buy

CAPITALAND MALL TRUST C38U.SI

CapitaLand Mall Trust: A good blue chip name to buy

 Price corrected post our downgrade

 FY16F yield close to 2 SD above 5- year mean

 Expect stable DPU growth

Valuations back to attractive levels

Following our downgrade on CapitaLand Mall Trust (CMT) to a Hold on 22 Oct 2015, we note that its share price has since corrected 8.5%, as market jitters resurfaced over the possibility of a Fed lift-off in Dec this year after a strong Oct jobs data report.

Telecoms Sector - OCBC Investment 2015-11-30: Maintain OVERWEIGHT in uncertain times

STARHUB LTD CC3.SI SINGTEL Singapore Telecommunications Z74.SI M1 LIMITED B2F.SI

Telecoms Sector: Maintain OVERWEIGHT in uncertain times

 Yields largely recovered above 5%

 Defensive businesses, strong cashflows

 M1 has the highest expected total return

Fear of a fourth telco?

For nearly a year, the market has been rife with talk of a fourth telco emerging to increase competition here. However, we understand that the IDA is only likely to give its decision in early 2016.

StarHub Ltd - OCBC Investment 2015-11-30: Hubbing strategy may be its forte

STARHUB LTD CC3.SI

StarHub Ltd: Hubbing strategy may be its forte

 Outlook still mostly stable

 Hubbing offers sizable discounts

 Yield still decent at 5.5%

Recently guided for flat FY15 service revenue

Despite a pretty decent 9M15 showing, StarHub Ltd lowered its FY15 service revenue guidance to be maintained at 2014 level, versus the previous guidance of low single-digit range growth, citing falling voice usage, especially in roaming and IDD services, in its mobile segment; but this is likely to be mitigated by subscription revenue, which should continue to increase with growth in the subscriber base in both the consumer and enterprise segment as well as higher data consumption.

Singtel - OCBC Investment 2015-11-30: Resilient outlook; maintain BUY

SINGTEL Singapore Telecommunications Z74.SI

Singtel: Resilient outlook; maintain BUY

 Expects low single-digit growth

 Free cash flow remains strong

 Offers regional exposure

Keeps most of FY16 guidance unchanged

After its recent 2QFY16 results, Singtel has largely kept its guidance largely unchanged for FY16. It continues to expect group revenue to grow by mid single digit level; EBITDA to increase by low single digit level.

M1 - OCBC Research 2015-11-30: Offers highest yield among peers

M1 LIMITED B2F.SI

M1: Offers highest yield among peers

 Worst performing in terms of share price

 Sees low single-digit earnings growth

 Attractive 6.5% yield for FY15

Worst performer among telcos in 2015

M1 is the worst performer among the telco stocks so far in 2015, down some 20.2% YTD; but from a high of S$3.99, the stock has fallen to as low as S$2.74, or about 31%.

ISOTeam - RHB Invest 2015-11-30: On Track For a Stellar FY16

ISOTEAM LTD 5WF.SI

ISOTeam (ISO SP) - On Track For a Stellar FY16

ISOTeam has announced contract wins of SGD20.49m, comprising A&A and R&R works.
The majority of jobs are from Singapore government bodies like town councils and the National Environment Agency.
We understand that c.SGD30m-35m of contracts have been utilised YTD and it is on track to enjoy a stellar FY16 (Jun).
With a steady orderbook of c.SGD80m-85m on top of a potential expansion to Myanmar in December, maintain BUY and a SGD0.82 TP (41% upside).

Plantation - UOB Kay Hian 2015-11-30: A Boost From El Nino And Biodiesel

Plantation Sector WILMAR INTERNATIONAL LIMITED F34.SI FIRST RESOURCES LIMITED EB5.SI GOLDEN AGRI-RESOURCES LTD E5H.SI BUMITAMA AGRI LTD P8Z.SI

Plantation - A Boost From El Nino And Biodiesel

The plantation sector’s outlook is turning positive. CPO prices are expected to be supported by a stronger-than-expected El Nino and higher demand on Indonesia’s higher biodiesel blending mandate.
We raise our ASP assumptions to RM2,500-2,600 for 2015-16. Among the three markets, we prefer Singapore-listed companies as FR and BAL have a young age profile and will benefit from Indonesia’s biodiesel policies.
Maintain OVERWEIGHT.

JUMBO GROUP - UOB Kay Hian 2015-11-30: Looking Forward To FY16

JUMBO GROUP LIMITED 42R.SI

JUMBO GROUP (JUMBO SP) - Looking Forward To FY16

VALUATION

 Maintain BUY and target price of S$0.49.

Our target price has an implied FY16F PE of 20.5x which is comparable to its regional peers such as Cafe De Coral and Breadtalk.

RESULTS

 FY15 adjusted net profit comparable to FY14.

Assuming the restructuring exercise had been completed at start of FY15, FY15 proforma profit to owners would have been S$13.1m, forming 103% of our full-year forecast. After excluding one-off IPO expenses, FY15 adjusted net profit will have been about S$14.0m and fairly comparable to FY14.

IHH Healthcare - CIMB Research 2015-11-27: 3Q seasonally weak; expect strong 4Q

IHH HEALTHCARE BERHAD Q0F.SI

IHH Healthcare - 3Q seasonally weak; expect strong 4Q

3Q15 core earnings were broadly in line; 9M15 formed 68% of our forecast (vs. 69% in FY14).
Core net profit growth (+16% yoy) was mostly driven by higher average inpatient revenue in Turkey, ramp-up at Novena Singapore and marginal growth in Malaysia.
3Q15 EBITDA margins declined to 23.1% (2Q15: 26.1%, 3Q14: 23.9%) due to share-based expenses, new hospitals in M’sia, and bad debt provisions in Turkey.
4Q is seasonally stronger (weather related and increased patient traffic come yearend). Maintain Add.

Saturday 28 November 2015

Bloggers Say... Top 5 Articles Of The Week

Friday 27 November 2015

SGX Top Gainers, Top Losers, Top Volume, Top Value & FTSE ST Indices 2015-11-27

FTSE ST Indices 27-November-2015, Friday

STI Index

-25.57
(-0.89%)

2859.12

All-Share Index

-4.47
(-0.64%)

691.45

Mid Cap Index

-3.23
(-0.48%)

671.32

Small Cap Index

+0.12 (+0.03%)

405.67

Fledgling Index

-0.98 (-0.12%)

820.78

Catalist Index

+1.08 (+0.21%)

511.77

Basic

+0.37
(+0.33%)

113.16

China Index

-2.17
(-1.03%)

208.06

China Top Index

-1.08
(-0.63%)

171.42

Consumer Goods Index

-3.44
(-0.79%)

430.38

Consumer Services Index

-12.99
(-1.70%)

751.64

Financials Index

-4.29
(-0.56%)

759.49

Health Care Index

+7.83
(+0.53%)

1474.65

Industrials Index

-1.27
(-0.19%)

666.96

Maritime Index

-1.52
(-0.68%)

220.47

Oil & Gas Index

-4.96
(-1.22%)

401.07

Real Estate Holding

-10.94
(-1.54%)

697.52

Real Estate Index

-5.32
(-0.77%)

688.22

Real Estate Investment

-0.39
(-0.06%)

691.46

Technology Index

-4.76
(-1.47%)

319.84

Telecommunications Inde

-4.41
(-0.45%)

984.64

Utilities Index

-0.20
(-0.05%)

430.81

IHH Healthcare - DBS Research 2015-11-27: Impacted By Translation Losses

IHH HEALTHCARE BERHAD Q0F.SI

IHH Healthcare - Impacted By Translation Losses

Premium status reflected in price, Maintain HOLD.

We maintain our HOLD recommendation for IHH with a revised TP of RM6.19/ S$2.04.
While we like its geographical diversification and premium healthcare services provider status, we believe current valuation at c.48x FY16F PE reflects this.

Monday 30 November 2015

Singapore Strategy: Bumpy road ahead, but opportunities exist

A year of two halves

ComfortDelGro (CD SP) - Optimistic On Strong Profit Growth

SMRT Corp (MRT SP) - Waiting For Rail Reforms To Be Unveiled

Singapore Land Transport - 2016 Could Be a Year Of Many (Positive) Changes

Industrials: Cleanest Dirty Shirt

FTSE ST Indices 30-November-2015, Monday

Sunday 29 November 2015

Property – Singapore 1H16 Strategy: Interest-ing Times For Real Estate

AIMS AMP (AAREIT) - Floor Area to Unearth

CapitaLand Mall Trust: A good blue chip name to buy

Valuations back to attractive levels

Telecoms Sector: Maintain OVERWEIGHT in uncertain times

Fear of a fourth telco?

StarHub Ltd: Hubbing strategy may be its forte

Recently guided for flat FY15 service revenue

Singtel: Resilient outlook; maintain BUY

Keeps most of FY16 guidance unchanged

M1: Offers highest yield among peers

Worst performer among telcos in 2015

ISOTeam (ISO SP) - On Track For a Stellar FY16

Plantation - A Boost From El Nino And Biodiesel

JUMBO GROUP (JUMBO SP) - Looking Forward To FY16

VALUATION

 Maintain BUY and target price of S$0.49.

RESULTS

 FY15 adjusted net profit comparable to FY14.

IHH Healthcare - 3Q seasonally weak; expect strong 4Q

Saturday 28 November 2015

Top 5 Best Rated Articles and Top 5 Most Popular Articles of Singapore investment bloggers for the week as of 28-Nov-2015 according to the ratings given by readers of Bloggers Say.

View the latest articles by investment bloggers @ Bloggers Say...

Friday 27 November 2015

FTSE ST Indices 27-November-2015, Friday

IHH Healthcare - Impacted By Translation Losses

Premium status reflected in price, Maintain HOLD.