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PHILLIP SECURITIES |
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Japfa Ltd (JAP SP) 2Q19 a big miss
ASF, costs to blame; cut forecasts but maintain BUY 2Q19 reported PATMI of cUSD5m was way below our expectation and even core PATMI (ex-F/X and bio assets fair value changes) of USD15m was half of what we were forecasting. In our view, operating cost increases, some of which could be due to African Swine Flu (ASF), was primarily to blame for the big miss. We cut our forecasts and TP to factor in higher costs but maintain BUY given the upside potential to our revised TP after the c28% YTD price decline in the stock.
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Sheng Siong Group Another marvellous year in store expansion
2Q19 revenue was above our expectations. PATMI was marginally below estimates due to higher operating cost from new stores and S$800k negative impact from the new lease accounting standard. After opening three stores in May, SSG is tendering for another six new stores in 2H19. The interim dividend was raised by 6% to 1.75 cents. We modestly reduced our FY19e profit forecast due to the change in accounting method. Our recommendation is lowered from BUY to ACCUMULATE following the share price performance. Our target price of S$1.30 is unchanged. SSG is still riding on the growth of its store expansion and market share gains.
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CGS CIMB |
UOB KAYHIAN |
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Parkway Life REIT Stable operations
■ PREIT’s 2Q/1H19 DPU of 3.27/6.55 Scts was in line at 25.1%/50.5% of our FY19 forecast. ■ Increased rental from Singapore and Japan boosted 2Q19 results. ■ According to PREIT, it will enjoy higher new minimum rent revision of 1.61% for Singapore hospitals from 23 Aug 2019 to 22 Aug 2020. ■ Maintain Hold. Our DDM-based TP remains at S$3.14.
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ARA US Hospitality Trust (ARAUS SP) 2Q19: Beyond The Seasonal Uplift
Results came in above expectations. DPU of 1.36 US cents represents 30% of our FY19 (8-month) forecast. More than a seasonally strong 2Q19, portfolio properties outperformed respective comp-sets, achieving a RevPAR index of 106.8%. The strong results were also due to astute execution in cost management and lower interest rates. On acquisitions, management is looking to close 1-2 deals (US$60m range) in the next 3-9 months. Maintain BUY with a higher target price of US$1.21.
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