| MAYBANK KIM ENG |
UOB KAYHIAN |
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mm2 Asia (MM2 SP) Needs to be “More Than Blue”
Movie optimism reflected; D/G to HOLD Reported good showing of mm2’s latest movie “More Than Blue” that has led to another tie-up with Fox Networks Group Asia has likely driven the stock’s recent re-rating. We make no changes to forecasts as we await divisional disclosures in fiscal-year-end reporting, particularly on the cinema side. We think optimism has been priced in and downgrade the stock to HOLD from BUY. Maintain our 1x PEG-based TP of SGD0.34. Cinema performance and its impact on leverage are key upside and downside risks to our outlook.
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CSE Global (CSE SP) Acquisitions Rolling In
CSE has entered into a share purchase agreement to acquire RCS for A$11.64m (S$11.26m). This transaction is CSE’s second acquisition this year. CSE’s current growth streak features aggressive share buybacks that indicate management confidence in the company. Maintain BUY and PE-based target price of S$0.62.
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| CGS CIMB | OCBC |
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SingTel Decent yields to ride out earnings volatility
■ The Singapore mobile business is facing intensifying competition. We are now factoring in larger mobile ARPU erosion and device subsidies. ■ Singtel has committed to DPS of 17.5 Scts p.a. in FY19/20F (implying dividend yield of 5.9% p.a.) to compensate investors for earnings volatility. ■ Maintain Add; our SOP-based target price is cut by 3% to S$3.30.
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SG Banking Sector: It still sparks joy
Despite record profits in FY18, share prices of the banking stocks were fairly lackluster so far this year. The lackluster performance so far this year could partly be due to expectations of lower fee income as well as expectations that there is not going to be any further Fed rate hike for the rest of this year. With another record year projected for FY19, albeit at a lower single-digit growth in terms of earnings, it is not unreasonable to expect the FSTFN index to trade back to the norm or the 10-year average of 1.1x book. Our fair value estimates are S$29.31 for DBS and S$28.30 for UOB. At 25 March 2019 closing prices of S$25.12 and S$24.95, DBS is trading at 1.3x book and UOB is at 1.1x. In addition, dividend yields are 4.8% for both. |
Check out our compilation of Target Prices
