| UOB KAYHIAN |
MAYBANK KIM ENG |
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Wilmar International (WIL SP) 2Q18: Strong Set Of Results
Wilmar reported its strongest 2Q performance since 2011 in 2Q18 with a core net profit of US$352m. Results were above our expectations as the tropical oils and oilseeds & grains divisions’ margins were stronger than expected. The better qoq and yoy PBT was supported by better crushing volumes and higher crushing margin. We may adjust our earnings forecasts post-briefing to take into account contributions from Renuka Sugar after Wilmar increases its stake to 58.34%. Maintain BUY with a lower target price of S$3.90.
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First Resources (FR SP) No surprises to 2Q18 results
Room for stronger 2H18 earnings 2Q18 core PATMI met 26%/25% of our/consensus full-year estimates – inline. We are keeping our forecasts, anticipating better 2H18 earnings. Maintain BUY and unchanged TP of SGD2.00 on 17x FY18 PER, pegged at its 5-year historical mean. We continue to like FR for its medium-term growth prospect and cost efficiency, being one of the lowest cost producers in the region. FR declared an interim DPS of 1.25sen.
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| CGS CIMB | OCBC |
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Memtech International 2Q18 hit by poor margins
■ 2Q18 core PATMI of US$1m was a miss against our/consensus expectations. ■ Revenue grew 19% yoy in 2Q18, but GPM fell to 14.7% (2Q17: 17.3%) due to higher raw material costs, staff costs and more outsourcing of tooling work. ■ We expect qoq margin improvement in 3Q18F from better economies of scale. ■ Product pipeline boosted by new auto customer, medical device and military parts. ■ Maintain Add with lower EPS and S$1.43 TP (10x FY19F P/E). MTEC offers 4-5% forecasted dividend yield and currently trades at 0.9x FY18F P/BV.
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Viva Industrial Trust: Deal or No Deal?
Under the terms of the merger, each VIT unit can be exchanged for 9.6 S cents in cash and 1.6 new (post-merger) ESR-REIT units. We estimate that the fair value of the post-merger ESR-REIT entity should lie at ~S$0.52 per unit (and above, assuming that there are positive synergies to be gained from the merger). Overall, our estimate implies that 1 VIT unit can be traded for an aggregate value of at least S$0.934 (including the 9.6 S cents in cash). Against VIT’s S$0.90 closing price as at 13 Aug, we see these as “principal-positive” terms for VIT. Given the favourable terms, we see it in VIT unitholders’ benefit to accept the offer at the upcoming EGM and Scheme Meeting on 31 Aug. |
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PHILLIP SECURITIES |
DBS VICKERS |
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Ho Bee Land Limited Banking on recurring rental income to ride out near term uncertainties SINGAPORE | REAL ESTATE | 2Q18 RESULTS
Gross revenue and profits adjusted for revaluation gains within our forecast. S$28.3mn revaluation gain as a result of the sale of a 30-year leasehold interest in its 999-year Bukit Timah petrol station site. 16% increase in total recurring rental income mainly as a result of new acquisitions. 44% increase in financing costs along with rise in net gearing ratio to 0.76x. Potential delay again in launch of Sentosa properties. Maintain ACCUMULATE with unchanged RNAV-derived target price of S$2.98.
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HRNetGroup Ltd (HRNET SP) : BUY
Higher productive headcount driving growth • 2Q18 in line, driven by more professional recruitment placements • New acquisitions and JVs to contribute and support growth from 2H18 • Maintain BUY, TP S$1.01
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