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Hyphens Pharma Intl Ltd
• 1Q21 looks promising. Recovering from FY2020's dip of 5.6% in net profit, Hyphens delivered its highest ever quarterly sales in Q1 with profit margin hitting 6.3%, as demand in Vietnam recovered. • Staying focused - Proprietary brands. The group is consistently expanding its proprietary brands, which has the highest product gross margin. • Streamlining medicine deliverables – ePharmacy. Riding on the quick expansion of telehealth, Hyphens has partnered with WellAway Pharmacy in medicine deliverables to the convenience of patients' homes. • Upgrade to OUTPERFORM with new TP of S$0.43. We roll forward valuation to be based off FY2022 forecasts and maintain our 17x P/E peg.
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STRATEGY – SINGAPORE From Pandemic to Endemic
Potentially A Bumpy Ride in 2H21, But There Is Still Gas Left In The Tank The Singapore market has performed extremely well ytd, with its valuations remaining inexpensive both regionally and globally. Although the Asian region faces a more bumpy recovery post COVID-19, we believe the STI has tailwinds from Singapore’s robust GDP growth and positive sentiment from the re-opening. We continue to like financials, selected re-opening plays, and COVID-19-resilient sectors among others.
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UOB KAYHIAN |
UOB KAYHIAN |
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REITs – Singapore Logistics REITs – Tailwind From E-commerce And Building Resiliency In Supply Chains
E-commerce is a key driver of demand as online retail sales require 3x the logistics space compared with brick & mortar retail sales. The transition from just-in-time to just-in-case supply chains is also expected to increase inventories by 5-10%. BUY FLT (Target: S$1.79) and ALLT (Target: S$0.89), which provide FY22 distribution yield of 5.6% and 6.2% respectively.
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Sembcorp Marine (SMM SP) A Large S$1.5b Rights Issue, And A Bitter Pill To Swallow
SMM’s double announcement of its rights issue and a non-binding MOU with KEP to combine their offshore marine businesses should not be a surprise. The former will nevertheless be painful for minority shareholders merely seven months after the prior rights issue at S$0.20. In the longer term, the merger (if successful) is positive and necessary, but short-term challenges remain. Maintain HOLD with a lower target price of S$0.124 (S$0.180 previously).
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Check out our compilation of Target Prices
