Excerpts from analysts' report

CIMB analysts: William Tng, CFA, Roy Chen & Ngoh Yi Sin

Stocks that could re-rate given time:
Del Monte could be in for a re-rating if its turnaround demonstrated in 2QFY4/16 results continue. Full year results will provide a better sense of how well Del Monte has managed its acquisition of the US business. Refinancing via preference securities remain a goal, though again being delayed by weak equity market conditions. Eventual listing of the US business is a likely option to recapitalise the group.

Sarine Tech’s Board opines that the worst of its industry downturn is behind. This should lead to an earnings recovery post the dismal FY15. The key re-rating drivers are better than expected results in the short-term and faster progress in its polished diamond customer segment which has the potential to be a significant earnings contributor.


Stocks that caught our eye this reporting season:
Best World registered strong earnings growth in FY15 with 149.2% yoy rise in net profit. With a full year DPS of 2 Scts, dividend yield is 5.3%. Historical P/E and P/BV are 8.4x and 1.33x (hist. ROE: 15.9%).

Taiwan2.16Best World distributors in Taiwan in an upbeat mood during a meeting this month (March). Photo: Facebook
"The China direct-selling licence will lead us to our next phase of growth.”
 --
Huang Ban Chin, executive director, Best World International
The key re-rating driver is the huge China market potential once the company obtains its direct selling licence in China. Subject to Chinese authorities’ approval, management is targeting to achieve this within the next 12 months. Even without this, management is optimistic that FY16 performance will be positive. 

Sunningdale Tech reported its first full year performance with the acquisition of First Engineering. Revenue grew 42% yoy and reported net profit was up 52.1% yoy. With a DPS of 5 Scts, dividend yield is 5.4%. Historical P/NTA and EV/Core EBITDA are 0.55x and 2.6x respectively. The company reckons that it is now one of the largest plastic injection moulding companies with a global footprint. Shareholding is fragmented. 


Top picks
Our top picks are GL Limited, Innovalues, SARINE, Venture Corporation.

In the dividend yield department, UMS Holdings continues its excellent track record as a dividend paymaster, ending FY15 with a 6 Scts DPS in total (11% yield). Although 1H is expected to be weak and earnings could fall 33% yoy in FY16, strong FCF generation is likely to see the continuation of its 5-6 Scts DPS payout. A risk to highlight is the expiry of its AMAT contract in 2017. Terms and ability to renew the contract does pose a risk.

Full report here.

See also: 
BEST WORLD: 10 takeaways from FY15 results briefing

SUNNINGDALE TECH: 52% Surge In FY15 Net Profit To S$42.1 Million

You may also be interested in:


 

We have 1150 guests and no members online

rss_2 NextInsight - Latest News