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MAYBANK KIM ENG |
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Banks Beyond the greater bay
■ We tuned in to OCBC’s presentation on its Greater China (GC) franchise. Key focus areas are the Greater Bay, Jing-Jin-Ji and the Yangtze River Delta. ■ OCBC reiterates the franchise value created from acquiring Wing Hang Bank – banking top-tier HK firms and facilitating outward investments of local firms. ■ Maintain Neutral. SG banks’ expansion into GC provides significant growth potential, but we remain wary of prolonged trade war and HK uncertainties.
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mm2 Asia (MM2 SP) Glass neither half empty nor full
Mixed quarter. HOLD. Although 1Q is a seasonally softer revenue quarter for mm2, event/concert division was unusually slower. Lower gross profit margins (62% vs 67% a year ago) exacerbated this further. We assume revenue catch up in later quarters and maintain revenue forecasts but increase production cost assumptions leading to -2%/-9% in FY20E/21E core profit forecasts. Our 1x PEG based TP on a revised 13% (from 16% previously) core profit CAGR over FY19-22E is consequently lowered by 27% to SGD0.20. Maintain HOLD where core production and cinema performance business are key drivers of our outlook.
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RHB |
UOB KAYHIAN |
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Hyphens Pharma (HYP SP) Ceradan Leading The Pack; Keep Buy Keep BUY and DCF-based SGD0.25 TP, 25% upside plus 2.8% yield. 2Q19 revenue decreased 6.1% YoY to SGD29m from SGD30.9m on higher sales recorded from the specialty pharma principal in 2Q18 – this is ahead of the products licensing renewal in Vietnam. This decline was offset by a 7.4% increase in sales in the proprietary brands segment due to higher sales of Ceradan brand products. We believe the latter products will take off progressively, while the other business segments should remain robust.
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STRATEGY – SINGAPORE 1H19/2Q19 Report Card – Nothing To Write Home About
This earnings season mostly saw in-line results with 65% of companies meeting expectations which is the highest in the past five years. In addition, we note that only 8% of the companies beat expectations in 2Q19 which is the lowest percentage of beats in the past three years. Post the results we have reduced our market EPS growth further and have cut our 2019 year-end target for the FSSTI by 7% to 3,210.
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