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Investors’ Corner (Yoma, CapitaMall, Kep Corp, SGX)
Investors' Corner | 25 October 2012
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By: Nicholas Tan
Articles (71) Profile

Yoma Strategic Holdings
Price – $0.54
Target – $0.51

Yoma Strategic Holdings reported a negative 2Q13 net income of $4.2m, mostly due to a $5.4m one-time non-cash share-based payment to its chief executive officer, partially offset by increased sales of residences and land development rights. Accounting for one-time non-operating expenses, net operating profit would have been $1.8m – up 33% y-o-y – which we judge to be mostly in line with expectations. 2Q13 revenue was $11.6m, increasing 59% y-o-y mainly due to stronger sales at Pun Hlaing Golf Estate and Star City. Management reports that, since Star City’s acquisition, 249 units out of a total of 528 units in building 3 and 4 have been sold as of 30 Sep-12. We would speak with management further regarding these results and, in the meantime, we maintain HOLD with an unchanged fair value estimate of $0.51. – OCBC Investment (22 Oct)

CapitaMall Trust
Price – $2.14
Target – $1.94

CapitaMall Trust (CMT) recorded a 5.1% y-o-y growth in 3Q12 revenue and a distribution per unit (DPU) of $0.0242, which was within our forecasts but slightly below consensus estimates. Revenue was up mostly due to higher rental incomes from Bugis+ which completed its asset enhancement initiative (AEI) works, offsetting a lower contribution from IMM where AEI work is still ongoing. Property expenses inched up slightly, due partly to operating expenses at JCube. CMT’s portfolio occupancy declined slightly to 98.4% (2Q12: 98.6%) due to lower occupancy at IMM. 9M12 shopper traffic fell 2.2% y-o-y (3Q12 decline was lower versus 2Q12), but tenant sales remained strong, inching up 1.2% y-o-y. AEI works at JCube and Bugis+ were completed with both assets attaining strong committed occupancies and have attracted strong shopper numbers, while Atrium@Orchard is on track for completion in 4Q12 with 90% committed occupancy. In our view, current trading levels valuation (1.3x FY12 PBV) appears lofty as the stock is trading at a 13.8% premium to our NAV. Maintain NEUTRAL. – Nomura (19 Oct)

Keppel Corporation
Price – $11.39
Target – $13.34

Keppel Corporation (Keppel) reported a 19.1% y-o-y rise in revenue to $3.2b but saw a 14.7% drop in net profit to $346.4m in 3Q12, which was within ours and the street’s full-year estimates. A front-end loaded year, the property division boosted net profit of $568.8m in 1H12 but retreated in 3Q12, posting net profit of $70.7m. Meanwhile, its O&M segment remained relatively stable at $241.2m in 3Q12 despite operating margins having more than halved as margins normalise. This is still slightly above our margin expectations of around 11-12%. Looking ahead, Keppel has increased its focus on productivity of its regional yards to meet heavier workload requirements and R&D efforts to sustain growth for the future. After securing $8.8b of orders (5% higher y-o-y) in 9M12, the group’s net order book stood at $13.1b as at Sept-12 with deliveries extending to 2019. We maintain BUY as management remains optimistic on the industry’s prospects and anticipates offshore orders to remain healthy across all main product classes. – OCBC Investment (19 Oct)

Singapore Exchange
Price – $6.85
Target – $7.60

Singapore Exchange (SGX) reported 1Q13 net profit of $74m (down 15% y-o-y but up 22% q-o-q), which was in-line with our expectation. In comparison with other major exchanges (HK down 35%, Australia down 31%, London down 32%, y-o-y), SGX had shone better in terms of securities daily average trading value (SDAV). We believe the relative attractiveness of ASEAN markets played a role, with ASEAN ex SGX down 17%. Moving on, its derivatives segment posted a steady 5% y-o-y increase mainly attributed to better management of collateral balances, in turn from more margins being placed in Singapore as the product suites expand. In our view, this segment will remain as a key pillar of profitability for SGX going forward. We maintain BUY rating as SGX remains a healthy dividend play with yields of 4-5%, along with management’s commitment to transform it via various initiatives to put the exchange on a firm path towards achieving a strong competitive niche in Asia. – Maybank Kim Eng (19 Oct)

Well trained in aspects of finance and business, Nicholas oversees the finance and manufacturing sectors at Shares Investment.

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Yoma Strategic Hldgs  0.315 -0.005 -1.56%   
Business: Co operates mainly in Myanmar under several business segments. [FY18 Turnover] Automobile (40.5%), real estate (20.8%), real estate services (18.4%), consumer (12.9%), financial services (6.2%), investments & others (1.2%).

Insight: Feb-19, 3Q19 revenue jumped 12.1% to $27m mainly a... Read More
CapitaLand Mall Trust  2.620 +0.01 +0.38%   
Business: Co owns and invests in quality income-producing assets which are used, or predominantly used, for retail purposes primarily in Singapore.

Insight: Apr-19, 1Q19 gross revenue and NPI rose 10% and 11... Read More
Keppel Corp  6.040 -0.04 -0.66%   
Business: [FY18 Turnover] Infrastructure (44.1%), offshore & marine (O&M) (31.4%), property (22.5%), investments (2%).

Insight: Apr-19, 1Q19 revenue rose 4.1% underpinned by high... Read More
Singapore Exchange  8.290 -0.11 -1.31%   
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

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