Sustained VIP chip growth at MBS positive for GENS
■ MBS’s 3Q17 adjusted EBITDA of US$442m (+13% yoy) was lifted by a higher rolling win rate and VIP volumes, which maintained the yoy growth trend seen in 2Q17.
■ Overall sustained return in VIP volumes to Singapore is positive for the industry and GENS.
■ We expect GENS to report 3Q17 adjusted EBITDA of S$285.1m in the upcoming 3Q17 results release scheduled for 6 Nov. Maintain Add and target price of S$1.35.
Keppel Corporation: Active in China
Keppel Corporation announced yesterday that Keppel Land China has entered into an agreement with Delight Prime Ltd (unit of HK-listed Logan Property) to divest its 100% stake in Keppel China Marina Holdings Pte Ltd for approx. RMB2.9b (~S$597.4m), subject to completion adjustments. A gain of S$290m is expected from this divestment, which should be completed by the end of this year. We are positive on the group’s strategy to recycle assets to seek higher returns and rebalance its portfolio to focus on selected high-growth cities in China. KEP’s Tianjin Eco-City project is also bearing fruit, with average selling prices of Eco-City residential land having increased significantly since 2016. We take this into account in our sum-of-parts valuation, and after adjusting our estimates, our fair value rises from S$7.73 to S$8.31. Maintain BUY.
Singapore Exchange Limited
Strong Performance as Markets Spur into Action SINGAPORE | FINANCE |1Q18 RESULTS Highlights
1Q18 PATMI was in line with our estimates.
New IPOs in FY18 expected to be in the high 20s compared to FY17’s 22.
Equity, FX and commodity derivatives volume expected to be strong in FY18.
Securities clearing fee spreads were down due to higher trading volumes by MMLPs and higher composition of products such as ETF and DLC.
An interim dividend of 5 cents per share proposed, unchanged YoY.
Maintain Accumulate with lower TP of S$8.31 (previous TP S$8.39) based on 23.9x historical 5-year average PE ratio.
Aviation – Singapore
Results Preview: Expect A Strong Quarter For SIA, STE And SATS, Upgrade STE To BUY
SIA, STE and SATS will report their latest quarterly results on 7, 8 and 9 November respectively. WE expect STE’s net profit to rise by at least 50% yoy, partly due to a low base. We also upgrade the stock to BUY with an unchanged target price of S$3.80. We expect SATS to report a 24% yoy rise in net profit, aided by disposal gains. SIA’s net profit should double yoy on the back of strong load factors. Maintain MARKET WEIGHT on the sector
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