| MAYBANK KIM ENG |
PHILLIP SECURITIES |
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AEM Holdings (AEM SP) Positive new revenue guidance
Raises FY19E guidance; TP up 13% AEM has raised its FY19E revenue guidance to SGD225-250m from SGD180-210m. We raise FY19E EPS by 47% to reflect this, though we have reduced FY20E EPS by 8% to factor in potential effects of its main customer’s decision to cease its development of 5G modems. Our ROEg/COE-g TP climbs to SGD1.40, now based on 3.1x average FY19-20E P/BV from 2.8x previously. Any further upward revision in guidance should provide catalysts while a key risk is a slower-than-expected FY20E recovery.
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Penguin International Ltd This Penguin can flex and fly SINGAPORE | OIL & GAS | INITIATION
Expanded shipbuilding capabilities beyond crew and security boats into passenger ferries, fire and rescue vessels, patrol boats and windfarm support vessels Rising recurrent charter income from crewboats amidst rising utilisation and charter rates. Offshore oil and gas activity is recovering and more customers opt for more costeffective and safer crewboats. Valuations attractive at 3x PE (ex-cash). Initiate coverage with a BUY and TP of S$0.61.
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| RHB | CGS CIMB |
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Venture Corp (VMS SP) Recovery Intact But Fairly Valued
Downgrade to NEUTRAL, SGD19.00 TP offers 1.5% downside. Venture saw a V-shaped recovery in 4Q18, with revenue growing QoQ and YoY. PATMI grew 8.6% YoY, ie in line. Management guided that tailwinds outweigh headwinds, and new product launches in 2H19 should mitigate near-term volatility from product transitions. Its share price has recovered, surging above our TP, and valuations at these levels are fair. This, together with uncertainties in 2H, rationalise our rating downgrade.
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Singapore Exchange 3QFY6/19: pessimism priced in
■ 3Q19 net profit of S$99.7m in line with consensus but slightly above ours. ■ Stronger derivatives volume (China A50, iron ore, FX) and open interest offset the drop in SDAV. ■ Maintain Add, premised on derivatives growth and win-win Nifty outcome.
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