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Top 5 Analysts’ Calls For The Week
In the Spotlight | 26 May 2014
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By: Jonathan Khoh
Articles (26) Profile

Sembcorp Marine (Target Price:$5.00) BUY

  • Sembcorp Marine announced that it has secured a USD236 million contract to build jack-up rig for Hercules North Sea , scheduled for delivery in 2Q16.
  • With the latest win, Sembcorp Marine’s YTD orders have increased to $1.93 billion, meeting 39 percent of our $5 billion order win assumption for the year. Its net order book, which runs until FY19, stands at  $13.2 billion
  • We continue to prefer Sembcorp Marine, whose margins are likely to improve, over Keppel (KEPSP, BUY, TP: $12.45), which is likely to face continuous headwinds. Sembcorp Marine’s earnings growth profile is also significantly stronger.

By: OSK-DMG Research

Yoma Strategic Holdings (Target Price:$0.87) BUY

  • Yoma reported 4Q14 PATMI of $6.4 million, which dipped 44.9 percent year on year, due to the absence of gains from a bargain purchase. Excluding fair value gains, we estimate core FY14 PATMI at $11.2 million, which forms 95 percent of our full year estimates; in line with our expectations but below consensus.
  • In terms of the topline, 4Q14 revenues increased 34.4 percent to $27.5m as the group recognized higher sales from property developments and land rights mostly fromStarCity. Staff costs also grew 98.5 percent year on year to $13.1 million as the group continued to build its employee base.
  • Sales in StarCity remain firm; as at end Mar-14, 528 units have been sold in Zone A’s Buildings A3 and A4, and 622 units have been sold in Zone B. In Zone B, Yoma also received an additional $3 million incentive fee for achieving the stipulated sales target.

By: OCBC Research

Lian Beng (Target Price:$1.17) BUY

  • Opportunistic Property Acquisition through its 32 percent owned associated company, EpicLand, to purchase 92.8 percent of the aggregate strate area of Prudential Tower from Keppel REIT for $512 million and could boost earnings of $23.3 million, or recurrent rental income of $5.1 million annually.
  • As the acquisition is expected to be completed in Sept 2014, there should be no impact on FY14 earnings estimates. Once the acquisition goes through, Lian Beng could potentially recognise $23.3 million over FY15 and FY16, which we will factor in upon actual completion of the acquisition.
  • We continue to favour Lian Beng for its strong bread-and-butter construction business and growing stream of diversified recurrent earnings. BUY.

By: OSK-DMG Research

SATS (Target Price:$2.95) Hold

  • Without a major breakthrough in transforming the group, we think that its near-term operations could remain challenging as both topline and margins could be under pressure.
  • FY14 net profit missed our forecast by 11 percent and consensus by six percent due to weakness in food solutions (weak TFK and lesser meals served). Associates/JVs were also affected by high costs in Hong Kong and weak cargo volume.
  • However, the longer-term outlook (beyond FY17) could be positive, driven by tourism in Singapore and growth in Changi Airport, but valuations (above 5-year mean) look stretched for now.

By: CIMB

SMRT Corporation (Target Price:$1.40) HOLD

  • Operating profits for SMRT’s fare business has been on the downtrend since FY09. This even slipped into the red in FY14. We believe the transition of the public bus industry towards a “Government contracting model” will help to alleviate the pressures for the operators such as SMRT, as the revenue risk will now fall under the Government.
  • Based on our estimates, the net book value ofSMRT’s rail assets is worth approximately $1 billion. If the sale of these assets back to the Government does eventually materialise, it would strongly bolster SMRT’s balance sheet.
  • Given SMRT’s robust share price run-up in recent weeks, we believe these positives have been priced in. Hence, we maintain HOLD on SMRT.

By: OCBC Research

 

Driven by passion in investments, Jonathan’s research emphasizes in incorporating critical thinking with value and income investing surrounding companies listed in Singapore. Well trained in banking and finance, Jonathan has intern experience at various industry players including GIC Pte Ltd.

Please click here for more information about this author.

Sembcorp Marine  1.190 -0.010 -0.83%   
Business: Co is a leading global marine & offshore engineering group. [FY18 Turnover] rigs & floaters, repairs & upgrades, offshore platforms (98.8%), ship chartering (1%), others activities (0.2%).

Insight: May-19, 1Q19 revenue fell 31.3% to $810.6m due to ... Read More
Yoma Strategic Hldgs  0.315 -0.010 -3.08%   
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
Lian Beng Group  0.495 -0.005 -1.00%   
Business: A construction co with integrated civil engineering & support service capabilities. [FY18 Turnover] Construction (43.6%), mfg of concrete (24.4%), ppty development (14.5%), dormitory (9.1%), investment holding (8.3%), engineering & leasing of machinery (0.1%).

Insight: Apr-19, 9M19 revenue dipped 1% due to decreased re... Read More
SATS  4.920 -0.03 -0.61%   
Business: Asia's leading provider of gateway services and food solutions. [FY19 Turnover] Food solutions (54.1%), gateway svcs (45.8%), others (0.1%).

Insight: May-19, FY19 revenue rose 6% to $1.8b driven by hi... Read More


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