MAYBANK KIM ENG | UOB KAYHIAN |
ComfortDelGro (CD SP) Potential tie-up with Uber
Exclusive strategic alliance discussions with Uber Comfort announced that it is in exclusive discussions with Uber to form a potential strategic alliance on: 1) the management of Uber's fleet of vehicles; and 2) booking software solutions in Singapore, including Comfort’s taxis. We expect some developments by end-2017; two positive scenarios include: 1) Comfort getting the private car rental business and being allowed to charge a profitable rate; and 2) surge pricing service for Comfort on Uber’s platform, which could level the playing field with competitors. Maintain HOLD and TP of SGD2.25, based on 16x (long-term mean) FY17E EPS.
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IHH Healthcare (IHH SP) 1H17: Earnings Miss On High Start-up Costs
1H17 adjusted core earnings fell 32% yoy, missing our and consensus estimates. Pre-operating costs at new hospitals such as GHK were the main drags, offsetting top-line growth (10% yoy). That said, existing core markets registered good operating performance with higher inpatient volume and revenue intensity. Reduce 2017-19 earnings estimates by up to 30% to build in cost pressure. Maintain HOLD with a lower SOTP target price of S$1.73 (previously S$1.80). Entry price: S$1.50.
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OCBC | |
Health Management International: Results within expectations Health Management International (HMI) reported its 4QFY17 results, with revenue up 5.2% YoY to RM111.7m, leading to a net profit of RM10.7m, vs. RM4.9m in 4QFY16. Keep in mind that this is the first quarter of a fully consolidated set of results, reflecting the acquisition of non-controlling interests in its two hospitals. On a full year basis, FY17 revenue was up 9.5% to RM435.8m, helped by higher patient load and average bill sizes in its two hospitals – Mahkota Medical Centre and Regency Specialist Hospital, while PATMI was up 3.5% to RM20.6m. Recall that there were one-off fees and costs of ~RM8.2m related to the above-mentioned acquisition. Excluding non-operational items and one-off costs, core PATMI of RM32.1m came in within expectations. Separately, a final dividend of RM1.0cents/share was declared. Looking ahead, FY18 earnings should offer further clarity to investors on earnings, given the consolidation of ownership in both hospitals and lesser one-off costs. We believe our investment thesis remains intact, with the group on a healthy growth momentum, backed by a multi-strategy approach, expansion plans and a strong management team. Pending an analyst briefing, we maintain our BUY rating but put our DCF-derived (base year FY18) fair value estimate of S$0.80 under review.
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DBS VICKERS | |
Model Portfolio
Portfolio changes 1. Add Manulife US REIT to Dividend category 2. Add China Aviation Oil and mm2 to Growth category Overview The benchmark Straits Times Index is down 1.5% since our last update on 18 July. We had rightfully anticipated that July’s rally will lack the follow-through. Our followers would have noticed that we had been trimming our portfolio over the past two months as we expect a choppy 3Q and consolidation risk off STI 3350. Looking back, it was the right thing to do as these stocks subsequently slumped and underperformed the STI. Five stocks have been removed since July (refer to table below). All the five stocks fell and underperformed the STI subsequent to their removal with an average decline of 10.63%.
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