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Penguin International (PBS SP) Expect A Slowdown In 2020, But Recovery In 2021
Penguin held its AGM in May 20, and responded to questions on the impact of COVID19 and low oil prices. Both the shipbuilding and chartering segments face headwinds as demand for its Flex Fighters and chartering falls. To preserve cash, Penguin has slowed down fleet expansion and stock vessel construction programmes. We cut our 2020 EPS by 47%, and lower our PE-based target price by 29% to S$0.60. Maintain BUY as we expect EPS recovery of 34% yoy for 2021.
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Dairy Farm Int'l Negatives priced in; await the recovery
■ With most of its main markets slowly easing out of Covid-19 lockdowns, we turn less negative on Dairy Farm Int’l’s (DFI) near-term prospects. ■ What is left is a recovery of Chinese tourism to Hong Kong before we turn more positive on the stock. We raise our FY21-22F EPS. ■ We upgrade to Hold and lift our TP to US$5.45, now on higher PER of 20x on CY21F EPS (17x previously), close to -1 s.d. from 2007-19 average.
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China Aviation Oil (CAO SP) Last Thursday, China’s aviation authority announced that 95 foreign airlines, which had suspended services to China, could now apply to resume flights there. The authority estimated that the number of international flights will increase by 50 from 8 Jun to 150 per week. An average of 4,700 passengers are expected to arrive per day vs around 3,000 now, CAACNews, the official newspaper for the Civil Aviation Administration of China, said on its website. (Reuters) In April, China already witnessed a gradual recovery in domestic aviation traffic. With the Civil Aviation Administration of China now allowing more foreign airlines to fly into the country, we can expect an increase in demand for imported jet fuel. This will be positive for China Aviation Oil, which is the sole supplier of imported jet fuel to China. We reiterate that, if the current recovery in aviation traffic is sustained, CAO’s 2H20 earnings could surprise on the upside. We retain our call and TP ($1.25) on this counter. |
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