Singpost SINGAPORE POST LIMITED S08.SI Singapore Post Ltd - If we were the new CEO...
- SPOST is in the process of searching for a new CEO. We outline the key priorities that we think he/she could focus on, especially coming on board in a tough year.
- We think impairment of goodwill for TradeGlobal (TG) could be on the cards, given aggressive growth assumptions, although Jagged Peak (JP) is likely to be spared.
- A cut in DPS from 7 Scts to 6.25 Scts makes sense amid high capex in FY17-18. It will run out of cash in FY3/17 if the share issuance and Alibaba JV fall through.
CHINA MERCHANTS HLDGS(PACIFIC) C22.SI China Merchants Holdings Pacific - Take the offer to steer clear of headwinds
- Major shareholder Easton Overseas has made a privatisation offer for the remaining 24.12% CMHP shares that it does not own.
- The offer price of S$1.02 represents 22-26% premium over the 1- and 3-month VWAP. It represents 15.9x CY16 core P/E and 1.07x trailing P/BV.
- We think the offer price is good and minority shareholders should accept the offer.
RIVERSTONE HOLDINGS LIMITED AP4.SI Riverstone Holdings - Further margin compression a key risk
- 1Q16 core net profit slightly below, at 20%/19% of our/consensus full-year forecast.
- 1Q16 net profit flat yoy despite sales increase of 17%.
- GPM dipped 2.5% pts yoy due to change in product mix and adverse FX impact.
CWT LIMITED C14.SI CWT Limited - Core operations intact
- 1Q16 net profit missed expectations, at 20% of our FY16 forecast. The shortfall was mainly due to one-off tax of S$4.2m.
- No surprises on the core business, with 1Q16 operating profit in line at 28% of our full-year forecast (1Q is seasonally stronger).
- Maintain Hold and SOP-based target price of S$1.92, pending start of formal buyout.
Ascendas REIT ASCENDAS REAL ESTATE INV TRUST A17U.SI Ascendas REIT - Positioned for steady growth
- FY16 DPU of 15.36 Scts (+5.2% yoy) met consensus and our forecasts at 102% of our FY16F.
- 4QFY16 DPU of 3.41 Scts (-8.1% yoy) formed 23% of our FY16F.
- Buoyed by acquisitions, income available for distribution rose 7.7% yoy for 4QFY16. Booked a net revaluation loss of S$6.9m, mainly due to Australia.
STARHUB LTD CC3.SI Starhub - Lacking topline growth
- 1Q16 results were in-line. Weaker 2H16 expected on higher handset subsidies.
- Mobile revenue was weaker yoy & qoq due to decline in Voice roaming/IDD/SMS.
- Growing broadband & enterprise fixed revenue offset weakness in mobile & pay TV.
LIPPO MALLS INDO RETAIL TRUST D5IU.SI Lippo Malls Indonesia Retail Trust - Dual earnings growth drivers
- 1QFY16 results largely in line, supported by organic and acquisition expansion.
- Achieved 7.5% rental renewal growth over preceding levels.
- Sizeable FY17 lease expiries to underpin positive earnings trajectory.
SEMBCORP INDUSTRIES LTD U96.SI Sembcorp Industries - Focus on overseas assets
- 1Q16 net profit of S$107m (US$79m) was in line at 21% of our FY16 forecast and 20% of consensus.
- Utilities profit was stable yoy, thanks to stronger China, Middle East and UK, but weaker qoq due to competitive spark spread in Singapore.
- Overseas assets account for c.60% of utilities profit.
ASCOTT RESIDENCE TRUST A68U.SI Ascott Residence Trust - Bulking up in the US
- ART announced its second acquisition in the US today - the Sheraton Tribeca New York Hotel - for US$158m or S$218m (US$428,000/key).
- Acquisition is accretive by all counts. Property acquired at > 6.8% NPI yield.
- Acquisition to be financed via US onshore debt of c.US$100m and private placement, launched concurrently with the acquisition.
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Singpost SINGAPORE POST LIMITED S08.SI Singapore Post Ltd - It gets busier at the checkout line
- We think SPOST’s share price has been overly punished and deserves to trade up to higher valuations on earnings delivery in ecommerce logistics.
- We also address concerns on its M&As, declining mail volumes, its net debt position and competition from startups. We think these are overplayed.
SEMBCORP MARINE LTD S51.SI Sembcorp Marine When it rains, it pours
- SMM has issued a profit warning that it will record a net loss in 4Q15 with a significant decline in net profit for FY15.
- It blames a challenging operating environment and customers deferring or seeking to defer their rig orders as the key culprits.
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.
FRASERS CENTREPOINT TRUST J69U.SI Frasers Centrepoint Trust - Continues to deliver
- 4QFY15 DPU grew 2.7% yoy, led by higher rental revenue and lower financing costs.
- Portfolio occupancy remains high at 96%.
- Increasing shopper traffic and rising tenant sales underpin ability to grow rents
- Northpoint AEI to commence in Mar 2016.
- Maintain Add, with DDM-based target price of S$2.22 .
Ascendas REIT ASCENDAS REAL ESTATE INV TRUST A17U.SI Ascendas REIT - Stable outlook
- 2Q DPU boosted by healthy organic growth and one-off distribution of S$6.5m.
- Positive rental reversions across all property segments, uplift sustained into 2H.
- AEIs in China and Singapore to provide another avenue of growth.
- Greater impact of contributions from Australian portfolio acquisition to be felt from FY17.
- Maintain Add, with an unchanged target price of S$2.57.
CAPITALAND MALL TRUST C38U.SI CapitaLand Mall Trust - New contributions from Bedok Mall from 4Q
- 3Q top line affected by ongoing AEI works and lower occupancy, offset by lower operating expenses and reduced interest charges.
- Portfolio occupancy dipped to 96.8% on enhancement works.
- Shopper traffic and tenant sales growth produced a stronger showing in 3Q.
- New contributions to be felt from Bedok Mall; recent divestment of Rivervale Mall improves financial flexibility.
GENTING SINGAPORE PLC G13.SI Genting Singapore - MBS likely to take more market share
- 3Q15 adjusted property EBITDA was US$389.7m (+7% qoq, +11% yoy).
- Rolling chip volume grew 20% qoq and 25% yoy to US$11.4bn, the best quarterly performance since 1Q14.
- Stronger performance at MBS may not translate into better figures at GENS’s Resorts World Sentosa (RWS), rather we expect MBS to gain market share.
SHENG SIONG GROUP LTD OV8.SI Sheng Siong Group - Bumper year for new stores
- 3Q15’s healthy sales growth of 7.3% yoy was mostly driven by new stores (+6.2%), with same-store sales (+1.1%) still reflecting sluggish retail spending.
- 3Q15 earnings (+18.7% yoy) beat our expectations by 7%, mostly coming from government grants (for productivity improvement programmes) and other income.
- We maintain our forecasts and target price pending tomorrow’s analyst briefing.
SEMBCORP MARINE LTD S51.SI Sembcorp Marine - Short-term pain, long-term gain unsure
- 3Q15 core net profit of S$49m was 50%/60% below our/consensus forecast due to weak rig-building revenue recognition and reversal of profit for five jack-up rigs.
- Plunge in the share price of associate Cosco resulted in S$17m impairment made on assets held for sale as well as S$24m losses shared in associates.
- 3Q15 EBIT margin was 6.6% (1H15: 11.4%) due to profits reversed for five jack-up rigs which had stopped construction since Aug 15.
- We cut our FY15-16 EPS by 2-12% and target price to S$2.03, as we roll forward to CY17 valuation, still based on 11x P/E (-1 s.d. of historical average).
KEPPEL CORPORATION LIMITED BN4.SI Keppel Corporation - Upside capped
- 3Q15 net profit of S$363m is largely in line with our expectation and consensus. 9M15 core net profit forms 75% of our FY15 forecast.
- Revenue for O&M missed slightly on slower-than-expected project recognition and more deferral of deliveries (three jack-ups). O&M EBIT % stable at c.12%.
- Property sold 1,330 homes in China, up from 1,080 in 2Q15.
- Downgrade from Add to Hold on limited upside. Re-rating catalysts could include stronger-than-expected margins and orders on O&M.
MAPLETREE INDUSTRIAL TRUST ME8U.SI Mapletree Industrial Trust - New AEI a potential medium-term booster
- 2QFY16 results boosted by Equinix contributions and organic growth.
- Rental reversions were positive but gap between passing and new rents continued to narrow.
- Rising cost pressure to dampen NPI margin.
- New Kallang Basin AEI to provide medium-term booster.
- Maintain Hold with unchanged DDM-based target price of S$1.66.
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