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Investors’ Corner (M1, SGX, Yangzijiang, CapitaRChina)
Investors' Corner | 21 October 2011
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By: Daxx Chong
Articles (58) Profile

Price – $2.48
Target – $2.79

M1 reported 3Q11 revenue easing 0.4% y-o-y and 0.2% q-o-q at $244.8m, or around 4% shy of our forecast; net profit climbed 4.1% y-o-y to $41m, it was down 4% q-o-q and was also 4.6% short of our forecast. It added some 41,000 new subscribers in 3Q, but it was driven by pre-paid segment – post-paid segment only added 7,000 new subscribers – but we believe that consumers may be holding back in anticipation of the new iPhone. Meanwhile, M1 revealed that it has 16,000 Nationwide Broadband Network fiber customers as of end-September. Nearly 45% was added in the quarter alone, primarily driven by its aggressive promotion of its 100Mbps plan. M1 will continue to maintain its 80% dividend payout ratio, however, cautioned that the conditions for making another special dividend this year are not optimistic in view of the global and local macro-economic outlook. Maintain BUY. – OCBC Investment (18 Oct)

Singapore Exchange
Price – $6.29
Target – $7.23

Singapore Exchange (SGX) reported 1Q12 NPAT of $87.5m, 10% higher than our $79.1m estimate. The beat mainly comes from: 1) higher depository services fees driven by increased institutional settlement instructions as more institutions utilise SGX Prime; 2) slightly lower technology expenses given the new REACH platform only started operating for 2 months. SGX continued to be disciplined in cost control and was able to achieve a cost/income ratio of 41.8% in 1Q (vs 1Q11/4Q11’s 42.8%/45.1%). We expect cost to slightly trend up for the rest of FY12E as REACH started running full time and a one-off variable bonus charge in 2Q12E. Given that exchanges’ earnings are highly correlated with market conditions, we have yet to see clear signs of recovery. Maintain NEUTRAL. – Goldman Sachs (17 Oct)

Yangzijiang Shipbuilding (Holdings)
Price – $0.97
Target – $1.60

Yangzijiang Shipbuilding (Holdings) (YZJ) announced that it is “confident to deliver not less than 30% growth in net profit attributable to equity holders in the upcoming 9 months results announcement”. That would set their minimum 9M11 profits at Rmb2.76b, and considering earnings of Rmb2.96b last year, it is definitely on track to make record profits this year. On its microfinance assets, YZJ contrasted their value to those of its market cap (BUY. – AM Fraser Securities (17 Oct)

CapitaRetail China Trust
Price – $1.17
Target – $1.20

CapitaRetail China Trust announced 3Q11 distribution per share of $0.0212, 5% below house’s estimates but in line with consensus. Net property income in renminbi terms grew 21.7% y-o-y and 6.1% q-o-q, on the back of strong rental reversions and new income contribution from the Minzhongleyuan mall. On a comparable basis, it grew by 13.4% y-o-y but declined 1.4% q-o-q due to seasonally higher expenses. Overall rental reversions continued to remain stable at 12% against preceding rents (8% in 1Q11 and 17% in 2Q11). Key assets CapitaMall Wangjing and Xizhimen registered the fourth consecutive stable reversions at mid-teen level. With performance from CapitaMall Qibao and Saihan also getting stabilised from their asset enhancements, we do see initial portfolio moving towards a matured one that generates rental reversion in the range of 10-15%. Maintain NEUTRAL. – JP Morgan (16 Oct)

With a long-standing interest in economics and finance, Daxx is the Senior Research Editor of Shares Investment.

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Singapore Exchange  8.470 -0.06 -0.70%   
Business: [FY18 Turnover] Equities & fixed income (48.2%), derivatives (40.2%), mkt data & connectivity (11.6%).

Insight: Jan-19, 1H19 operating revenue increased 5.7% to $... Read More
Yangzijiang Shipbuilding (Hldgs)  1.080 -- --   
Business: Co is one of the largest non-state owned shipbuilders in China. [FY18 Turnover] Shipbuilding (58.1%), trading (32.8%), investments (6.7%), others (2.4%).

Insight: Apr-19, 1Q19 revenue jumped 26.8% to Rmb6.3b due t... Read More
CapitaLand Retail China Trust  1.530 -0.010 -0.65%   
Business: Co is a real estate investment trust with a portfolio of retail real estate across China.

Insight: Apr-19, 1Q19 gross revenue increased 1.1% in SGD t... Read More

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