ANALYSTS SAY: Buy, Sell, Hold (30 June 2017)

Courts Asia

Improved profitability driven by Singapore

■ Courts adopted new accounting standards this quarter, which effectively lowered reported revenue and profits, making comparability to our forecasts irrelevant.

■ Reported FY3/17 core net profit (S$23.7m) therefore came in below our FY17 forecast of S$25.2m or at 94% of our estimate.

■ The retail environment is still soft but the big positive is its Singapore operations where EBIT doubled on the back of better margins, driving group NP to +248% yoy.

■ Final DPS of 1.29 Scts declared, c.4% yield intact.

■ We tweak our earnings, mostly to reflect the new accounting standards. But our TP remains unchanged at S$0.60 (still based on 10.2x CY18 P/E, -1 s.d.).

Read More ...

Thai Beverage: Pending details for change in excise taxes

One of the key factors we have been keeping an eye on for Thai Beverage is the pending change in excise taxes for alcoholic beverages. In addition, as part of the broader amended excise tax act, the government will introduce a new excise tax structure for non-alcoholic beverage as well, such that beverages with higher sugar levels would incur a higher tax burden. The date of implementation is expected to be from 16 Sep, but more details would have to be released before we can determine potential implications. Meanwhile, the Songkran festival in April was said to be low-key and consumer sentiment is anticipated to remain soft over the year-long mourning period. As such, management will be focusing on cost control and profitability for the remaining of FY17 (Year-end Sep) and we believe the group is prepared for changes in the excise tax act. We also wait for progress on the upcoming corporate restructuring that we believe has been lending some support to the group’s share price. We maintain BUY and fair value estimate of S$1.01 given the positive growth story beyond FY17.

Singapore Property

2H17 GLS: More land for developers

 As expected, government adds new land sites in 2H17 GLS by 9% h-o-h

 Confirmed list up 22% h-o-h; implying government remains keen to prevent an “overheating” in land prices

 Positive signals for Singapore property

 Top picks are UOL and City Dev

Read More ...