Home run, finally
■ The proposed 100% stake acquisition in Cathay Cineplexes gives mm2 a strong foothold in Singapore and enhanced bargaining power with suppliers.
■ S$230m purchase consideration implies 13.8x EV/EBITDA, pricey relative to previous deals, but in exchange for rare SG assets, full ownership and an established brand.
■ 1HFY3/18 PATMI (+65% yoy) was in line at 45% of our FY18F estimate; synergistic M&As as key potential catalysts.
■ Unusual also gains traction with North Asia and new product line for “Disney On Ice”.
■ Our SOP-based TP is now higher on EPS upgrades and as we roll over to CY19F.
Venture Corporation (VMS SP)
3Q17 Results Above Expectations; Making The Old Economy New
Venture’s 3Q17 results were above our expectations with net profit a whopping 134.8% higher yoy. 2017 has been a breakthrough year for Venture, justifying its approach for careful selection of customers that are industry leaders in fast-growing technology domains. This approach creates interdependencies between Venture and its customers, resulting in far superior net margins. Maintain BUY with a higher target price of S$23.50.
|MAYBANK KIM ENG|
United Overseas Bank (UOB SP)
Steady And Consistent
3Q17 in-line; EPS and TP raised
3Q17 core PATMI of SGD883m (+5% QoQ, +12% YoY) was in-line with our expectations, but beat Bloomberg consensus estimates by 5%. 9M17 core PATMI of SGD2.5b (+8% YoY) met 70% of our FY17 forecast. We leave our forecasts for FY17E largely unchanged, but raised FY18-19E core net profit slightly by ~2-3%. With the change in EPS forecasts, our assumed sustainable ROE is now 11.7% (11.5% previously), COE 10.1%, and growth rate 3.5% (both unchanged). Accordingly, our TP is raised 3% to SGD27.10, pegged to 1.2x FY18E P/BV, slightly below its 10-year mean of 1.3x to reflect lower forecast ROEs compared to previous periods.
Sembcorp Industries Ltd
Underlying business trend remains unchanged
SINGAPORE | CONGLOMERATE | 3Q17 RESULTS
Revenue and net profit missed our full year expectation by 5.5% and 22% respectively.
In Utilities segment, Singapore market continued to deliver favorable performance while India market dragged. Marine profitability remained weak.
We lowered our FY17e earnings by 25.2%. Bulk of our downward earnings revision comes from Marine division. We raised our target price to S$3.70 to account for the higher valuation on SMM
Check out our compilation of Target Prices