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UOB KAYHIAN |
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HRnetgroup (HRNET SP)
Weak SG Numbers Drag Down Core Profit Maintain BUY, new SGD0.94 TP from SGD1.06, 22% upside plus 3% FY19F yield. Gross profit contributions from HRnetgroup’s Singapore operation dropped 11.6% YoY on a slowdown in hiring after the unicorn hiring spree ended. As we expect the Singapore unit to remain weak in subsequent quarters, we adjust FY19-20F core PATMI by -6%/-5% which results in a lower TP. That said, it has net cash of SGD304m in its balance sheet – for which management plans to make yield-accretive acquisitions.
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Oversea-Chinese Banking Corp (OCBC SP) 1Q19: Record PPOP; Strong Capital Base To Guard Against Uncertainties
OCBC reported a record total income of S$2,676m (+15% yoy) and record PPOP of S$1,556m (+22% yoy), driven by NIM expansion of 9bp yoy, robust contribution from insurance and strong net trading income. It has conservatively reduced collateral valuations due to structural changes and the prolonged downturn in the oil & gas sector. Maintain BUY and target price of S$14.62.
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| RHB | UOB KAYHIAN |
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Thai Beverage (THBEV SP) Let’s Go For a Brew; Keep BUY
KEEP BUY, unchanged SGD0.92 TP implies 11% upside with 2% FY19F yield. Thai Beverage’s 2QFY19 PATMI dropped 12% YoY to THB5.8bn due to the high base effect stemming from the spirits segment in 2QFY18. Nonetheless, 1HFY19 earnings still made up 57% of our full-year estimate, which is in line with our expectation.
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Wilmar International (WIL SP) 1Q19: Strong Results Despite Lower Soybean Crushing
Wilmar reported a core net profit of US$250m (-25%qoq, 36% yoy), 20% above our expectation with positive surprises from the tropical oils and sugar segments despite low soybean crushing and commodity prices. The tropical oils segment’s PBT margin for 1Q19 was at a record high of 4.8% (highest level since 2015). Management guided for better soybean crushing margins and a positive performance from tropical oils in 2Q19. Maintain BUY. Target price: S$3.90.
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Check out our compilation of Target Prices