| CIMB | MAYBANK KIM ENG |
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Sembcorp Marine Seadrill rig impact ■ SMM has an undelivered semi-sub to North Atlantic Drilling (Seadrill’s subsidiary). The rig is completed with 20% downpayment received and profit reversed. ■ We estimate that SMM has recognised c.US$130m worth of provisions for the rig, representing c.23% discount to the contract value in 4Q15. ■ The rig is under an extended standstill agreement until Jul 17. If both parties decide not to extend the agreement, SMM will take on 77% ownership (US$437m). ■ We believe SMM has the option to sell at cost or charter the unit (in partnership with another operator) to cover loan and operating costs. ■ Maintain Add and target price, based on 1.3x FY17 P/BV (1 s.d. below mean). Delivery of rigs and higher-than-expected order win are key catalysts, in our view.
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Cityneon Holdings (CITN SP) A Marvel-lous Move Stellar performance due to VHE unit Cityneon nearly doubled returns for shareholders in 2016 (vs STI: -0.1%, FTSE ST Small Cap: -6.2%). Despite headwinds in CITN’s core Meetings, Incentives, Conferences and Exhibitions (MICE) business, it was CITN’s foray into the Intellectual Property (IP) exhibition space that is now underpinning its growth proposition and investor interest. CITN acquired Victory Hill Exhibitions (VHE) in 2015, which owns long duration licence agreements with Marvel Characters BV and Hasbro to provide exhibits for the Avengers & Transformer franchises.
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| DBS VICKERS | |
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Singapore Airlines Core earnings in line Maintain HOLD; patchy outlook for the next few quarters. We remain neutral on Singapore Airlines (SIA) as its core earnings remain patchy amid a continued weak demand environment. We see weaker yields and higher operating costs eroding most or all the net fuel cost savings in the next few quarters ahead. We project fairly flattish core EBIT growth ahead for SIA. We have also lowered previously our DPS projection by 20% to 40 Scts per annum following a cut in interim dividend to 9 Scts in 1HFY17 despite an increase in earnings.
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| UOB KAYHIAN | CIMB |
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STRATEGY – SINGAPORE Dividend Plays To Crow About We highlight selected stocks that will offer compelling final dividends as well as stocks that could surprise on dividends in the upcoming quarter. WHAT’S NEW Dividend stocks to watch out for. We highlight stocks with compelling final dividends to watch out for. We also highlight stocks that could surprise on the upside and downside with respect to dividend payouts, and flag stocks to position in after the recent market strength.
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Auric Pacific Group Limited Offer price not favourable ■ Major shareholders made a voluntary conditional cash offer for the remaining 23.28% Auric shares that they do not already control. ■ The offer price of S$1.65 (final), translating to FY16F/17F/18F core P/E of 10.8x/10.2x/9.6x (7x/5.5x/4.5x if ex-net-cash), is not favourable, in our view. ■ Shareholders who choose to reject the deal should stay vigilant to the acceptance level to avoid the delist risk.
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