|UOB KAYHIAN||MAYBANK KIM ENG|
IHH Healthcare (IHH SP)
9M17: Earnings Weighed By Start-up Costs
IHH’s 9M17 adjusted core earnings fell 36% yoy, below our and consensus estimates. Start-up losses associated with expansion plans continued to be the main earnings drag. On a positive note, existing core markets continued to perform well operationally, registering growth in inpatient volume and revenue intensity. However, we expect cost pressure to remain high on the back of upcoming expansion plans across China over the next 1-2 years. Maintain HOLD with a lower SOTP target price of S$1.71 (previously S$1.73). Entry price: S$1.50.
Singapore Market Monitor
Shifting up a gear
Earnings recovery was sustained in q/e Sep 2017 A third consecutive quarter of core profit growth will go a long way in reinforcing sustainability of the somewhat tentative turnaround seen two quarters ago. Revenue, EBITDA and core profit of MKE’s stocks universe grew 4%, 14% and 7% YoY, respectively. The macro data continues deliver on our growth outlook while earnings expectations are inching up as well. We maintain a preference for cyclicals and are POSITIVE on property and industrials. Most of our top stock ideas are from these sectors.
Strategic alliance with China UnionPay
Geo Energy Resources Ltd
Amass war chest amid robust production
SINGAPORE | MINING | 3Q17 RESULTS
9M17 revenue and net profit were in line with our expectations.
Full year sales target is revised down from 10mn tonnes to 7mn~8mn tonnes.
Coal price stayed strong and hit YTD high of c.US$50/tonne in Oct-17.
Issuance of the new note enhanced solvency and liquidity.
Higher cash costs suppressed margin in 3Q17.
We lower the forecasted coal sales volume to 7.8mn tonnes (previous 8.5mn tonnes) but raise the estimated ASP to US$41/tonne (previous US$37/tonne) in FY17. Accordingly, FY17e EPS is updated to 3.3 US cents, 3.1% higher than our previous estimation. Based on unchanged forward PER of 10.0x (the average of regional peers), we maintain our BUY call with unchanged target price of S$0.44.
IPI Ekes Out Improvement Despite Pharma Slump
Singapore’s IPI edged higher to +14.6% YoY in October, driven by strengthening semiconductor and chemicals output as well as a sharp surge in food production. Meanwhile, pharmaceuticals output tumbled, capping some of the upside. Excluding biomedical manufacturing, Singapore’s IPI jumped 25.8% YoY.
Going forward, we maintain our view for IPI to remain positive but slow in the coming months and into 2018. Our forecast is for manufacturing activity to grow 11.8% this year, before slowing to 7.6% in 2018, undermined by a high base effect and a cyclical slowdown in semiconductor demand. However, in our view, growth next year would be supported by semiconductor testing activities, higher demand for capital goods, as well as a recovery in the marine & offshore segment, which would help cushion some of the downside.
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