| CGS CIMB |
OCBC |
|
Performance masked by one-offs
■ FY18 core EPS of 37.8 Scts was below expectations at 74% of our forecast. ■ Two new residential launches planned for 2Q19. ■ Maintain Add with an unchanged TP of S$8.45.
|
Sheng Siong Group: Time needed to bear fruit
Sheng Siong Group's (SSG) results were within expectations. 4Q18 revenue increased 10.7% YoY to S$221.8m while gross profit grew 9.2% to S$60.2m. New stores contributed much of the top-line growth – the Group opened 10 new stores this year, increasing the total store count to 54 and growing total retail space 22.7% YoY to 496.2k sq ft. 4Q18 PATMI increased 4.2% to S$17.5m. For FY18, PATMI grew 1.4% to S$70.8m, which made up 101% of our initial full-year forecast. Excluding a one-off positive in FY17 (a S$2.2m refund of prior years' taxes), SSG's FY18 net profit would have increased 4.6% instead of 1.4%. Going forward, we are still wary that consumer spending could see some softness in 1Q19. That said, we still do expect top-line and operating margins to grow in 2019, as the 10 new stores that opened last year are given more time to stabilize. In addition, we are keeping an eye on the ongoing US-China trade talks which may boost general economic sentiments if there is a positive conclusion. After adjustments, our fair value increases from S$1.13 to S$1.19. |
| RHB | RHB |
|
Banks
More Room For NIM Expansion Keep OVERWEIGHT on banking sector. Singapore banks should record further NIM expansion in 2019 – which will come from higher lending yields. In addition, over the longer term, we expect more cost efficiencies from digitisation efforts. All these will contribute to ROE expansion. Dividend yields are also attractive. We have BUY recommendations on both UOB and DBS. UOB is our preferred pick, partly due to its lower P/BV valuation.
|
|
|
|
Check out our compilation of Target Prices
