China Everbright Water Limited
Major turnaround this year
SINGAPORE | UTILITIES | 1Q17 RESULTS
Revenue was in line with our expectations.
Net profit marginally exceeded our expectations due to lower FX losses
As of Mar-17, CEWL operates 61 water projects with another 12 in the pipeline.
Due to recent price recovery, we downgraded our rating to “Accumulate” recommendation with a higher TP of S$0.57 (previous SG$0.56), based on lower average forward PER of 16.7x (previous 17.4x), together with forecast 3.24 SG cents dividend, implying a potential return of 19.5% from closing price.
ComfortDelGro: 1Q17 largely within expectations
ComfortDelGro’s (CDG) 1Q17 results came in largely within expectations despite a 2.4% YoY decline in revenue to S$972.0m, mainly eroded by weaker GBP against SGD. During the quarter, CDG also received ~S$11.1m in special dividends given its 9.6% stake in Cabcharge Australia. Consequently, excluding this one-off special dividend, 1Q17 core PATMI came in flat at S$72.7m, and formed 22.1% of our FY17 forecast. Looking ahead, we expect its CDG’s taxi business to continue to face headwinds while revenue growth will be driven by the expected opening of DTL3 in 2H17, which serves the most populated areas compared to the first two phases. As it takes time for ridership to ramp up, we forecast for DTL breakeven from FY19. On aforementioned reasons, we cut our FY17/18F PATMI by 3%/6% and lower our FV from S$2.95 to S$2.88. Maintain BUY.
Wilmar International (WIL SP)
Potential Listing In China To Create Positive Momentum
We are positive on the potential listing of its China operations as it could help to unlock the group value. The listing also paves the way for more aggressive expansion in China in branded consumer pack business and oilseeds crushing after the lifting of restriction on foreign investment in oilseed crushing. We are positive on this and are valuing its China operation at higher 2018F PE valuation of 20x (previously 15x). Upgrade to BUY with a revised target price of S$4.40.
Health Management International
3Q17: hit by one-offs
■ Excluding one-offs, 3Q/9M core PATMI was above expectations at 23%/71% of our full-year numbers, as we expect full earnings contribution in 4Q17 (without MI).
■ We saw improvement in both patient load (+1.4% yoy) and average bill sizes (+5.5% yoy) in 3Q17, driven by higher revenue intensity cases.
■ Strong operating cashflow (9M17: RM68m) to pare down 0.6x current net gearing.
■ Maintain Add with higher TP of S$0.83 (DCF; 7% WACC) on higher EPS estimates.
Deep value play
Valuations still attractive.
We maintain our BUY rating on UOL Group (UOL) as it is trading at an attractive valuation of c.0.7x P/NAV, which is at the lower end of its historical range. The successful launches of recently purchased land sites in the enbloc market will be re-rating catalysts for the stock. We have lifted our TP to S$8.73 based on a narrower 20% discount to RNAV of S$10.90.
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