| CGS CIMB |
CGS CIMB |
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China Aviation Oil 2Q18: Higher on other oil products; stable associates
■ CAO’s 2Q18/1H18 net profit of US$29.3m/US$56.2m came within expectations. 1H18 accounted for 60.8%/60.2% of our/consensus FY18F estimates. ■ The other oil product division shone in 2Q18 on better volumes, taking GP up 24% qoq and 55.1% yoy, mitigating SPIA’s softer contributions impacted by forex losses. ■ Maintain Add. Our TP is based on 12.5x FY19F P/E, c.26% discount to peer average.
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Y Ventures Group Ltd Venturing into e-commerce cryptocurrency
■ We obtained more clarity and insights from YVEN’s briefing today following its announcement of its US$50m Initial Coin Offering (ICO) launch for its AORA coins. ■ AORA coins will be used as primary tokens for online shopping on AORA, the first blockchain-enabled global buying platform and slated to launch in 2Q19. ■ Maintain Add. Our TP of $0.62 is based on 30x FY19F P/E (16% discount to peers).
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| OCBC | RHB |
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Sheng Siong Group: Flavour of the month
Sheng Siong Group’s (“SSG”) 2Q results were within expectations with PATMI increasing 6.3% YoY to S$17.2m or 23.5% of our initial full-year forecast. Looking ahead, we continue to expect mid-single digit same store sales growth for FY18 and FY19 and anticipate contributions from the two new stores that commenced operations in July. Given the uncertainties in the macro environment, we believe that defensive business models like those of SSG’s will continue to be favored in this investment climate. Our cost of equity drops from 6.5% to 6.0% while we keep our EPS forecasts largely intact. After adjustments, our fair value increases from S$1.12 to S$1.25. Maintain BUY.
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DBS Stronger 2Q18 Net Interest Income
Maintain BUY, but we place our SGD30.30 TP under review, pending an analyst briefing to be held later today. 2Q18 results announced this morning are in line with expectations. Core net profit of SGD1.37bn was up 20% YoY (-10% QoQ). 1H18 net profit represented 50% of our full-year forecast of SGD5.67bn. Positives included 2Q18 NIM widening 2bps QoQ to 1.85% on higher Singapore and Hong Kong interest rates, and 2Q18 loans growth of 3% QoQ – both these factors drove net interest income up by 5% QoQ, and +18% YoY. There was sequential weakness in wealth management fees, which dragged down fee and commission income. We will be reviewing our earnings forecasts and TP after the analyst briefing. Our current TP is derived from a long-term ROE assumption of 13.6%, which will build on 1H18’s ROE of 12.5% (1H17: 10.6%).
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RHB |
DBS VICKERS |
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Wilmar International Trade War Jitters
Maintain BUY with lower SOP-based TP of SGD3.51 from SGD3.59, 12% upside. We believe CPO prices have overreacted negatively to the trade war and expect to see some respite in 4Q18, post seasonal peak. However, given the larger-than-expected price reaction, we are cutting our CPO price assumptions for 2018-2019 to MYR2,400-2,500. Our earnings have been cut by 6-8% for 2018F-2020F. On soybean, we note that Brazilian soybean prices have risen and are now at a c.20% premium to US soybean prices. However, we believe Wilmar can still generate positive crush margins even at these price levels.
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Roxy-Pacific Holdings All eyes on new launches
Maintain FULLY VALUED; TP of S$0.40. We maintain our rating on Roxy-Pacific (Roxy) at Fully Valued and TP of S$0.40 based on a 55% discount to RNAV. We believe the surprise move by the authorities in hiking ABSD rates and tightening mortgages (just over a year after the authorities relaxed the policy measures) will hit buyer sentiment significantly.
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