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Singapore Post Ltd

Awaiting delivery


■ FY3/18 headline PATMI of S$126m (+278% yoy) was above our/consensus expectations, thanks to fair value gains. Maintain Add on potential earnings recovery.

■ Lower postal margin and associates’ earnings uncertainty are the new norms.

■ We expect new and existing initiatives to alleviate pressure facing each of the three segments, which should drive both volume growth and margin improvement.


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Wilmar International (WIL SP)

Earnings Volatility Due To Timing Issues


We remain positive on Wilmar despite it missing our 1Q18 earnings expectation. We expect the shortfall in 1Q18 to be made up for over the next two quarters. The delay in profit recognition was due to: a) timing of deliveries in the sugar division, and b) the lag impact from prices committed to earlier under soybean meal contracts, thus expansion in crushing margins has yet to be reflected. We trim our 2018 earnings forecast on a lower sugar PBT margin estimate as sugar prices remain under pressure. Maintain BUY. Target price: S$3.90.


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City Developments Limited:

Bonanza of launches to come


City Developments Limited: Bonanza of launches to comeCity Developments Limited (CDL) reported its 1Q18 results which missed ours and the street’s expectations. Despite the 35.0% YoY jump in revenue to S$1,057.8m, PATMI fell 16.3% YoY to S$80.0m due to lower gross profit and higher finance costs, effective tax rate and minority interests. During the quarter, CDL together with its JV associates sold 459 units in Singapore with an aggregate sales value of S$792.6m, representing sturdy growth of 57% and 66% YoY, respectively. Looking ahead, CDL has a robust pipeline of launches amounting to ~3.1k units, based on our estimates. After adjustments, our RNAV-derived fair value estimate declines marginally from S$15.91 to S$15.78. Maintain BUY. CDL continues to be one of our top picks within the property sector, as the group looks poised to benefit from the firm uplift in the Singapore residential market with the largest land bank in Singapore catering to all segments such as EC, mass, mid and high-end.


Food Empire

A Strong Caffeine Rush


Reiterate BUY with an unchanged TP of SGD1.07, offering a 59% upside. Food Empire delivered a spectacular set of 1Q18 results. PATMI grew 14% YoY to USD7.2m, on the back of strong revenue growth and the absence of a loss from its Korean associate. Excluding forex gains, core PATMI jumped 42% YoY to USD6.8m, meeting 30% of our full-year estimate. We think the stock’s valuation, at 11.5x FY18F P/E, is very compelling at this moment, given the company’s strong organic growth. Its new instant coffee plant in India – set to commence operations in 2020 – could lead to the next leg of growth.


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Cityneon Holdings (CITN SP) : BUY

1Q18 net profit jumped 80.5% y-o-y, mainly contributed by IP businesses 


• 1Q18 net profit jumped 80.5% y-o-y to S$3.95m on 38% increase in revenue to S$23.5m, with majority contribution from its IP businesses

• To own at least 9 to 10 exhibition sets by end 2018; in discussions for 3rd and 4th Jurassic World sets

• No change to earnings forecasts which assumes 10 exhibition sets each for FY18F and FY19F

• Maintain BUY with unchanged TP of S$1.60


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UOL Group Ltd (UOL SP)

Stronger Earnings to Come


TP raised 4%; Reiterate BUY; Top large-cap pick

While 1Q18 profit made up just 19% of our full-year forecast, new launches and completions will drive a pick-up in recognition. We raised our TP to SGD10.85 to incorporate: 1) potential contributions from the Silat Avenue site; 2) higher ASPs for Amber 45 and Nanak Mansions; and 3) higher UOB TP of SGD32.88. We made small revisions to our FY18-19E EPS (+1-2%), but raised FY20E by 9.5% for contributions from the Silat site. Our revised TP is based on a 10% discount to higher RNAV of SGD12.06. Maintain BUY. UOL is our top large-cap pick amongst Singapore property developers.


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LionelLim8.16Check out our compilation of Target Prices

Share Prices

Counter NameLastChange
AEM Holdings0.9050.005
Alliance Mineral0.240-0.010
Anchor Resources0.027-
Avi-Tech Electronics0.290-0.010
Best World Int.2.7000.020
China Sunsine1.320-
CSE Global0.4250.005
Food Empire0.535-
Geo Energy0.190-0.001
Golden Energy0.225-
GSS Energy0.1020.001
ISDN Holdings0.198-0.002
KSH Holdings0.525-0.010
Moya Asia0.079-
Nordic Group0.390-
Oxley Holdings0.300-
REX International0.074-
Sing Holdings0.395-
Sino Grandness0.117-
Straco Corp.0.700-0.015
Sunningdale Tech1.4800.010
Sunpower Group0.4000.005
The Trendlines0.0950.002
Tiong Seng0.275-
Uni-Asia Group1.1900.010
XMH Holdings0.161-
Yangzijiang Shipbldg1.300-

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