| MAYBANK KIM ENG | KGI |
|
Singapore market monitor 2016 innings close: Grinding towards a recovery Another weak quarter but the inflection seems near Cumulative revenue, EBITDA and core profit for our coverage universe fell for q/e Dec 2016. The only bright spot was the lower ratio of forecast cuts to upgrades in the past couple of quarters, a trend mirrored in slowing overall FSSTI index growth cuts, suggesting we may be near the end of the earnings downgrade cycle. One-year forward index PE at 14.4x is not compelling in a historical context (3yr av. 13.7x; 5yr av. 12.8x) with a sluggish earnings recovery outlook and high external vulnerability of the market. Hence our key 2017 stock picks have a defensive bias and a preference for secular over cyclical drivers.
|
SUTL Enterprise Ltd A sparkling gem that has yet to be fully appreciated |
| CIMB | |
|
Another upcycle begins ■ Successfully restructured with a net cash balance sheet. ■ Return to profitability driven by orders for a new equipment product from a major customer (sole source). ■ We expect an EPS CAGR of 55% over FY16-19F driven by orders from customer. ■ Announced a 25% dividend payout policy and proposed a 1-for-2 bonus issue. Projected dividend yields of 4.7-6.7% over FY17-19F. ■ Potential rerating catalysts include higher order wins. In the longer-term, could be a possible acquisition target by competitors. Initiate coverage at Add.
|
|
| PHILLIP SECURITIES | RHB |
|
Singapore Exchange Limited Minimum Allocation of Mainboard IPOs to Retail Investors SINGAPORE | FINANCE | UPDATE What is in the news? SGX has announced that it will mandate all Mainboard IPO companies to allocate at least 5%, or SGD50mn, whichever is lower, of their offer size. This mandate is aimed to facilitate greater retail participation in the Singapore’s equities market. The new rules on the minimum allocation will be effective 2 May 2017. How do we view this? Not fulfilling the minimum retail allocation does not preclude a Mainboard IPO. Though the mandate requires new Mainboard IPO prospects to provision a minimum allocation to retail investors, it does not prevent an IPO from proceeding if there is insufficient retail interest to make up the minimum allocation. Upon IPO, there will be a window period for the companies to ramp up retail vested interest to the minimum level. However, if the minimum level is not met, institutional interest may come in to fill the gap. Currently, the window period to ramp up retail vested interest is not disclosed.
|
Plantation Varied Price Views From POC 2017 POC 2017 saw some variations in the CPO price projections, with a wide range of prices of MYR2,200-3,000/tonne. Two of the three “key” speakers were bullish, while one was bearish. The other speakers were relatively neutral in their views, with prices ranging at MYR2,500-2,800/tonne. All speakers agreed, however, that volatility is the new norm, particularly with uncertainties surrounding trade and biofuel policies with a new US president in place. No change to our NEUTRAL sector call, with regional Top Picks being KLK, Sime Darby, Golden Agri and Lonsum.
|
Check out our compilation of Target Prices
