Excerpts from analysts' report

DBS Vickers analysts: Yeo Kee Yan & Ling Kee Keng

Small-cap names can often shine despite uncertainty and malaise in the broader market. We begin 2016 with the following conviction picks under the following themes:

1) Growth – MM2, Riverstone and Sheng Siong
2) Yield – China Merchants Holdings (Pacific)
3) Recovery – Japfa

For mm2 Asia (BUY, TP S$1.05), earnings should be boosted by growth in local productions as well as its expansion into the China market. Riverstone (BUY, TP S$2.83) should benefit from an enlarged capacity as well as a strong USD vs 
Ringgit, while Sheng Siong (BUY TP S$1.01) is looking to see both store growth and margin expansion.

Japfa chick10.15Parent stock chickens used to lay eggs for DOC (day-old chicks). Photo: RHBA rebound in dayold-chick prices should help Japfa’s (BUY TP S$0.90) earnings to recover, and lastly, CM Pacific (BUY TP S$1.45) offers a highly attractive dividend yield of over 8%, with long-term earnings bolstered by recently acquired toll roads in China.

Watch out for potential reversions for oil & gas-related names. While we are bearish on near term oil prices, if it does recover significantly, and holds, we can expect to see a rebound in stock prices of oil & gas companies.

Among these names, we think Ezion (BUY, TP S$1) and Pacific Radiance (BUY, TP S$0.42) should bear the most watching.

Share Prices

Counter NameLastChange
AEM Holdings3.5500.030
Avarga0.2500.005
Avi-Tech Electronics0.4250.005
Best World Int.1.360-
CEI0.930-0.040
China Sunsine0.495-0.010
CNMC GoldMine0.275-
CSE Global0.465-
Food Empire0.600-
Golden Energy0.1650.005
GSS Energy0.0610.005
ISDN Holdings0.410-
ISOTeam0.136-0.011
IX Biopharma0.240-0.005
JB Foods0.555-0.005
KSH Holdings0.3400.005
Medtecs Intl0.925-0.020
Moya Asia0.070-
Nordic Group0.245-0.010
Oxley Holdings0.215-0.005
Procurri0.295-0.005
REX International0.1540.009
Riverstone1.200-0.040
Roxy-Pacific0.350-
SingMedical0.2550.005
Sri Trang Agro1.130-0.010
Straco Corp.0.585-
Sunningdale Tech1.5300.020
Sunpower Group0.7450.010
The Trendlines0.091-0.004
UG Healthcare0.645-0.010
Uni-Asia Group0.6400.020
Yangzijiang Shipbldg0.910-

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