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UOB KAYHIAN |
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Qian Hu Corp Ltd Advancing with aquaculture
■ On 29 Aug 2018, we visited Qian Hu’s aquaculture farms on Hainan Island. ■ Qian Hu is an ornamental fish breeder and exporter. The group also manufactures and distributes a wide range of pet and aquarium accessories. ■ Qian Hu believes its venture into aquaculture could, in the next few years, grow into a bigger business than its existing businesses ■ Qian Hu trades at a historical P/BV of 0.44x with a dividend yield of 1.0%. Historical net gearing is 0.11x.
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Singapore Press Holdings (SPH SP) 4QFY18 Page Count Declines 14% yoy On Weak Display Ads Segment
Our page count of The Straits Times shows total pages fell 14.3% yoy for 4QFY18, and 13% yoy for FY18. Display ads continued to see widening decline rates. The decline suggests print revenue declined ~12%, which suggests earnings could come in higher by ~2%. Print revenue declines could re-accelerate in future quarters as tailwinds from property advertising dissipate. No change to earnings forecasts. Maintain HOLD and target price of S$2.58. Entry price: S$2.45.
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| PHILLIP SECURITIES | OCBC SECURITIES |
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Singapore Banking Monthly SIBOR and SOR set to soar SINGAPORE | BANKING & FINANCE | UPDATE
Singapore’s domestic loans rose 5.5% YoY in July. Loans growth in Hong Kong winding down to 9.5% in July. 3-month SIBOR spiked to 10-year high in August. Upgraded to BUY for the Singapore Banking Sector.
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Singapore REITs: A defensive armour despite some chinks
All the 23 S-REITs under our coverage reported 2QCY18 results which met our expectations. The average DPU growth came in at -0.8% on a YoY basis, versus -2.6% in 1QCY18. Looking ahead, we are projecting stable DPU growth (market-cap weighted) of 1.7% for the current financial year (FY18/19F) and 1.6% for the next financial year (FY19/20F). From a balance sheet perspective, the S-REITs under our coverage have remained prudent on their capital management. Although the current yield spread remains relatively tight at 363 bps, or 1.1 standard deviations below the 5-year mean, the ongoing macroeconomic uncertainties has resulted in a flight to defensive ideas. We thus believe S-REITs can have a strategic position in investors’ portfolio, but in a selective manner. Maintain NEUTRAL on S-REITs. Our preferred picks are Mapletree North Asia Commercial Trust [BUY; FV: S$1.42], Keppel DC REIT [BUY; FV: S$1.54], Frasers Centrepoint Trust [BUY; FV: S$2.49] and Frasers Logistics & Industrial Trust [BUY; FV: S$1.18]. |
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OCBC SECURITIES |
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Singapore Land Transport: 2018 fare review exercise starts
The Public Transport Council (PTC) announced on Monday evening that the 2018 fare review exercise (FRE) has commenced, and that the maximum allowable fare adjustment quantum to be considered for 2018 FRE is 4.3%. Public transport operators will need to submit their fare applications to the PTC by 1 Oct 2018 for consideration. While a fare hike is positive for operators, we do note that energy prices have been rising. Energy prices in 2017, which will be factored in the fare formula this year, rebounded by 26.2% over the previous year. Though the PTC will announce its decision on the fare adjustment quantum in 4Q18, this latest piece of news is likely to lead to a positive knee-jerk reaction to land transport stocks such as ComfortDelgro [HOLD, FV: S$2.50] and SBS Transit [Unrated]. For ComfortDelgro, we would 1) monitor the local ride-hailing space for any potential new entrants, 2) operations of the Downtown Line and 3) the progress of its overseas acquisitions which is expected to be a key driver of growth. |
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Check out our compilation of Target Prices
