| MAYBANK KIM ENG | PHILLIP SECURITIES |
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Best World International (BEST SP) Earnings beat from China; Raised TP to SGD3.53 China outperformed; TP raised by 51% 1Q17 EPS grew 63% YoY, beating our expectation and consensus, as sales from China outperformed, up 103% YoY. 1Q17 EPS met 24% of our FY17E, in the seasonally weakest quarter, which typically forms 20% or less of full year earnings. Strong performance in China was attributable to increased product acceptance, after the approval of direct selling license in Nov 2016.
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Fraser and Neave Leveraging on milk SINGAPORE | CONSUMER | 1H17 RESULTS ■ 1H FY17 Revenue/EBIT met our 47%/38% of our FY17 full year forecasts ■ Subdued top line growth as expected; Dairies continued to cushion the weak earnings from Beverages ■ Margins compression on the back of persistent challenging operating environment coupled, higher marketing expenses and increased debt burden ■ Additional stake in Vinamilk to 18.74%; investment will be accounted as associate and contribute to earnings in 2HFY17 ■ Interim DPS of 1.5 Cents declared, same as last year Earnings was affected by weaker consumer sentiment, adverse translation effects from a weak Ringgit (c.7% yoy as at end-Mar2017) and continued brand investment costs. Drag in revenue came from Malaysia Beverages and Dairies divisions, 1HFY17 sales -15% yoy and - 8% yoy respectively. Dairies Thailand continued to provide strong support to Group’s earnings.
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CIMB |
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OCBC Turning the corner ■ 1Q17 net profit of S$973m was above our expectation (S$818m) and consensus (S$845m).1Q17 net profit formed 28%/27% of our/consensus FY17 forecast. ■ The variance came from exceptional WM fees and lower specific provisions, while IB, trading and associates also did well. NPL ratio was stable at 1.3%. ■ Key disappointment was a 1bp qoq fall in NIM, which would have risen 1bp if not for a reversal of interest on NPL. A 20bp fall in CET1 CAR is expected to be temporary. ■ Upgrade to Hold from Reduce, with a higher GGM-based TP of S$9.94 (1.1x CY17 P/BV) as we raise FY17-19 EPS by 5-8% on higher non-NII and lower provisions.
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| OCBC | DBS |
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Delfi Ltd: Keeps its focus on core brands Delfi Ltd’s 1Q17 revenue was down 10.1% YoY to US$93.1m while PATMI was a tad lower than expected, declining 33% to US$5.6m. The sales performance was a result of a few factors including 1) an on-going product portfolio rationalization exercise implemented largely in 4Q16, 2) an on-going review of trading terms, 3) a higher than usual base in 1Q16. Looking ahead, we understand that management is positive on sales outlook, as they focus on their core brands and products, and drive forward higher margin products. All considered, management expects FY17 financial performance to be similar to FY16, barring unforeseen circumstances. We revise our estimates and roll forward to 30x blended FY17/18F P/E, resulting in a fair value estimate of S$2.21 (previous: S$2.37). Maintain HOLD. |
Perennial Real Estate Holdings Hidden gems yet to shine Trades at 0.5x P/B; Maintain BUY. We maintain our BUY rating on with TP of S$1.05 (based on 50% discount to RNAV) for Perennial Real Estate Holdings (PREH). The stock currently trades at 0.5x P/B, offers a massive upside (TP at 50% discount to RNAV) as it gradually realises its RNAV potential. Where we differ. Unlocking development value from strategically located landbank with partial exposure to healthcare. We are one of two brokers with coverage on PREH. PREH’s hidden gems lie in its vast integrated projects in strategic locations across the main transportation hubs in China though these have lengthy gestation periods. Apart from property, PREH has built a portfolio of medical and healthcare services to leverage on rising healthcare demand in China and Singapore. Potential Catalysts: Strata/en bloc sales, divestment of assets, building recurring income through healthcare hub and business.
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