PHILLIP SECURITIES | PHILLIP SECURITIES |
UG Healthcare Corporation Ltd Great quarter though ASPs are trending down
SINGAPORE | HEALTHCARE| 3Q21 UPDATE 14 May 2021 3Q21 PATMI beat estimates, up 56-fold YoY to S$34.3mn. 9M21 PATMI forms 83% of our FY21e forecast. Operating leverage and gross margins were better than modelled. Glove prices likely peaked in the March quarter. Nitrile producers from China are disrupting the market with aggressive prices to penetrate the market. We raise FY21e PATMI by 7% to S$115.3mn for higher margins and lower operating expenses. FY22e PATMI is cut by 17% to S$74mn as we lower gross margins by 5% points to 37% in view of ASP uncertainties. Prices have peaked and are trending down. UG Healthcare counters this by building up its core customer base and brand name to maintain price premiums. Supporting FY22e growth is a 58% surge in capacity to 4.6bn pieces. Target price still pegged at a 30% discount to Big 4 glove makers. This implies 7x FY22e P/E for a target price of S$0.85, down from S$1.03 as we cut FY22e earnings.
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Manulife US REIT Leasing headwinds despite rebound SINGAPORE | REAL ESTATE (REIT) | 1Q21 UPDATE
No financials provided in this operational update. 5.8% of NLA signed at +2.5% reversions, though with more tenant incentives and shortened leases. Leasing weakness to persist. Portfolio occupancy dipped QoQ from 93.4% to 92.0%. But rental collections remained high at 98.0%. Minimal rent abatement of 0.6%. WALE unchanged at 5.3 years. Maintain BUY and DDM TP (COE 9.1%) of US$0.84. FY21e DPU yield of 8.1%. Catalysts expected from higher take-up in leasing and asset acquisitions.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
ComfortDelGro (CD SP) Recovery mode
1Q21 PATMI ahead of estimates; Maintain BUY 1Q21 PATMI of SGD56m (+56% YoY, +22% QoQ) came in ahead of MKE/consensus estimates. The recovery was driven by higher taxi operating profit and SGD33m Covid-19 relief. That said, CDG’s operating performance is improving even with reduced government grants. Reiterate BUY and TP (WACC: 8.2%, LTG: 1%) of SGD1.88. We continue to like CDG as it offers exposure to domestic transport recovery. The impending review of Downtown Line financing framework and potential restructuring of its Australia bus assets remains a catalyst. Key risk includes further lockdowns in operating countries.
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Netlink NBN Trust (NETLINK SP) Defensive results
FY21 net profit met expectations; maintain BUY FY21 net profit of SGD94.8m was in line with MKE/ consensus estimates. Results were driven by higher EBITDA margin of 73.3% due to increased government grants and a favourable sales mix (more connectivity revenue). DPU of SGD0.0255 was declared, bringing FY21 DPU to SGD0.0508, meeting MKE/street estimates. With this, we raised our FY22- FY24E core profit by 11% to account for lower finance cost. As a result, our DDM-based (COE 6.3%, long-term growth 1.5%) TP is raised to SGD1.13 as we roll forward valuations to FY22E. Maintain BUY. Negative revisions to its regulatory regime are the key risk to our call.
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