|MAYBANK KIM ENG||PHILLIP SECURITIES|
First Resources (FR SP) 3Q results within our expectation
Expect potentially better results in the final quarter 3Q17 core earnings met 23%/21% of our (within)/consensus (below) fullyear estimates. Results would have been better had it not for the sharp inventory build-up and lower-than-expected CPO ASP achieved during the quarter. We maintain our EPS forecasts pending an update. Maintain HOLD and unchanged TP of SGD2.04 on 17x 2017 PER (5-year mean).
Fraser and Neave
Vinamilk for the win
FY2017 Revenue and Adjusted PATMI was c.6% lower than our full year expectations; due to persistently challenging environment in Malaysia and Singapore
Vinamilk to provide a further uplift to FY18e EBIT and cushion against the subdue Malaysia and Singapore markets
Upgraded to “Accumulate” with higher SOTP-derived TP of S$2.83 (previously S$2.52)
Wilmar: Steady performance
Wilmar reported a 0.4% YoY rise in revenue to US$11.1b in 3Q17, supported by increased sales from Oilseeds & Grains. Net profit fell 5.7% YoY to US$370.0m while core net profit decreased 15.9% to US$323.7m in 3Q17. Results were within expectations; 9M17 revenue and net profit accounted for 74% and 70% of our full year estimates, respectively. The good performance in Oilseeds & Grains and strong contributions from associates were offset by weaker results in the Tropical Oils and Sugar businesses. Looking ahead, management expects the good performance in the Oilseeds & Grains segment to continue into 4Q17, with crush margins and volume likely to remain positive. Performance of the other major business segments is expected to be “satisfactory”. We tweak our estimates and roll over our valuations to FY18 earnings, and our FV estimate eases from S$3.66 to S$3.51. Maintain HOLD.
Valuetronics Holdings Ltd 2QFY3/18: order backlog still strong
■ VALUE’s 2QFY18 core net profit of HK$51m was in line with our/Bloomberg consensus expectations. 1HFY18 core net profit formed 54% of our FY3/18F forecast.
■ CE’s IoT-enabled lighting product is still in ramp-up phase, with development of thirdgeneration series underway.
■ Robust ICE order backlog for automotive connectivity modules despite near-term supply chain pressure; we expect sales contribution from its 2nd AU OEM in FY19F.
■ Interim DPS of HK$0.07 declared; the stock offers 3.8% FY18-20F dividend yields.
■ Maintain Add with higher TP of S$1.10 (pegged to 11x CY19F P/E) for higher EPS and valuation rollover. Synergistic M&As are a potential key catalyst.
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