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Investors’ Corner
Investors' Corner | 24 December 2009
Related stocks:
H13
T39
By: Lai Wyai Kay
Articles (53) Profile

Ho Bee Investment
Price – $1.66
Target – $1.88

With the recovery of the mid-end and high-end market segments, we expect residential and investment property developer, Ho Bee Investment, to continue to launch new projects in 2010 and achieve strong sales. Moreover, the opening of the Integrated Resorts may result in renewed interest on its remaining unsold units at its projects on Sentosa Cove. Currently, Ho Bee is the biggest player at the prestigious development. Based on the progress of construction, we expect Ho Bee’s profit to decline from $386.4m in FY2009F to $164.4m and $60.1m in FY2010F and FY2011F respectively. This is because most of its projects are completed in FY2009F. However, with the cash generated from its earlier projects, it can invest in new projects and improve its future earnings. Target price reflects a change from 30% to 10% discount to the RNAV of $2.09. Upgrade to BUY.
– Phillip Securities (18 Dec)

MobileOne
Price – $1.84
Target – $2.10

Our recent conference call with management highlighted the following: 1) Roaming revenues have stabilized after the decline in the previous two quarters; 2) Growth in mobile broadband has been impressive; 3) The iPhone launch has been well received; 4) Capex guidance of $120m for 2009 is unchanged and similar levels are expected for 2010; 5) Management reiterated its dividend payout policy of 80%. We continue to like M1’s attractive dividend yield of 7%, especially amidst increasing market volatility. We also see room for a potential special dividend in 1Q10 as the company’s cash balance should increase from $23m as of end-07 to an estimated $55m by end-09 and management has historically returned excess cash to shareholders. In our view, valuations are reasonable at 2010e P/E of 12x and EV/EBITDA of 6x. Retain OVERWEIGHT.
– Morgan Stanley (18 Dec)

Noble Group
Price – $3.02
Target – $3.70

Noble Group’s 87.7% subsidiary, Gloucester Coal, recently announced a strategic review which concluded that output expansion is feasible. Noble’s aim is to become a top-5 coal producer in Australia by 2013, targeting an annual output of 16m tonnes, from around 4m tonnes currently. Gloucester’s output alone is expected to climb to 3-5m tonnes from 2m tonnes. Our EPS estimates are unchanged as we have already factored in rising contributions from coal assets. Noble remains our top pick in the commodities space for its exposure to cyclical commodities such as coal, oil & gas, and iron ore whose volumes and prices are rebounding. Moreover, Noble has new assets coming on stream in the next 12 months, providing an earnings boost and visibility. We see stock catalysts from increasing evidence of a global economic recovery driving higher commodity prices and margins. Maintain OUTPERFORM.
– CIMB-GK (18 Dec)

Singapore Press Hldgs
Price – $3.57
Target – $4.30

We have previously argued that the adex market will rebound sharply in 2010, driven by (amongst other factors) pent-up demand resulting from restrained ad spending over most of 2009. The adex data for Oct and Nov 09 support this thesis. Nov 09 total adex growth widened to 13% y-o-y (vs Oct 09’s +8.5% y-o-y) and this represented the largest y-o-y adex growth since Jul 08. Furthermore, the $207m Nov 09 total adex was at a 7-year high, signalling a strong and sustained recovery in the advertising market. Based on current run-rates, we estimate SPH booked approximately $180-185m 1Q10 advertising revenues, which is in line with our FY10e estimate of $715m. At current levels, SPH offers 28% total upside (including 7.8% dividend yield) to our target; ongoing expectations of a strong adex market rebound will support SPH’s FY10e earnings. Reiterate BUY.
– Deutsche Bank (18 Dec)

Ho Bee Land  2.280 -- --   
Business: Invests in & develops real estate properties in Singapore. [FY18 Turnover] Rental income (91.3%), sale of development properties (8.7%).

Insight: Apr-19, 1Q19 revenue rose 7.7% due to increased re... Read More
Singapore Press Hldgs  2.070 +0.02 +0.98%   
Business: Co is S'pore's main newspaper & magazines publisher that also has investment in properties. [FY18 Turnover] Media (66.7%), property (24.7%), others (8.6%).

Insight: Apr-19, 1H19 operating revenue fell 3% to $477.6m ... Read More


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