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CGS INTERNATIONAL |
LIM & TAN |
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Q&M Dental Group Scaling up with acquisitions
■ We expect QNM to complete its acquisition of a dental chain each in Australia and Thailand by end-Oct 26. Another MOU outstanding. ■ Its subsidiary Aoxin also signed two MOUs to acquire two dental chains across China in Mar and Apr 2026, respectively. ■ We believe the completion of the various deals could more than double QNM’s net profit in FY27F; reiterate Add with a higher TP of S$0.76.
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Lum Chang Creations / LCC (S$0.31, down 0.5 cts) delivered strong FY26 net profit growth as higher-margin projects helped to offset weaker revenue from project timing and mix. Capitalized at S$205mln, Lum Chang Creations trades at 8.2x forward P/E with a P/B of 4.3x. We lower our previous FY27F revenue and net profit forecasts by 21%/7% respectively to account for more conservative growth estimates, implying 20%/12% top-and-bottom line growth in the upcoming year. At current price levels, LCC remains well-supported with an undemanding P/E, dividend yields in excess of 6% and high ROEs of ~40%. Maintain BUY with an unchanged target price of S$0.52. |
| LIM & TAN | SAC CAPITAL |
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Frencken Group Limited ($2.25, down 0.01), a global integrated technology solutions company, has successfully completed a private placement that raised gross proceeds of approximately S$100 million (the “Placement”). The Placement drew strong demand from institutional, accredited and other investors. The Placement comprised 44,081,591 new ordinary shares in the capital of the Company (“Placement Shares”) and was fully subscribed at the price of S$2.2687 per Placement Share. The Placement Shares will be listed and quoted on the SGX-ST from 9.00 am on Friday, 4 September 2026. Maybank Securities Pte. Ltd. (“Maybank Securities”) was the sole placement agent in connection with the Placement. At $2.25, Frencken’s fully diluted market cap is $1.2bln and trades at 24x blended FY26/FY27 PE, 2x book and 2% yield. Based on consensus 1 year target price of $3.40, potential upside is 50%. With significant upside potential over the next 12 months, we see an opportunity to “Accumulate” the stock to position for strong growth in the next 12 months.
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CNMC Goldmine Holdings Limited (CNMC SP, S$1.35, TP:S$2.01, BUY)
CNMC Goldmine Holdings Limited (“CNMC” or “The Group”) was the first Catalist-listed gold producer on the Singapore Exchange, having commenced trading on 28 October 2011. It began as a gold explorer and producer, before diversifying into base metals production, including lead and zinc concentrates, in 2022. It has since transferred to the SGX Main Board as of 28 August 2026.
Financial Highlights. CNMC announced 1H2026 revenue increase of 23.4% YoY to US$65.2 million. Consequently, 1H2026 Group profit after tax increased by 18.7% YoY to US$23.1 million. This was largely attributable to the surge in 1H2026 gold prices by 39.1% YoY to an average realized price of US$4,446/oz. Meanwhile, 1H2026 gold sales volume decreased slightly by 6.0% YoY to 11,105 oz.
Sustained Gold Prices and Demand with Supportive Broader Metals Environment. The outlook for gold remains supportive through 2026, with prices expected to remain at ±5% of current levels, while output may see modest growth. According to the World Gold Council, gold remains sensitive to heightened geopolitical concerns and abrupt shifts in investor sentiment. Current gold prices are aligned with moderate growth globally. Continued elevated inflation could increase the appeal of holding gold as a store of value, but expectations of central bank tightening could make deposits more attractive as interest rates rise, resulting in less demand for gold. At Jackson Hole, FED Chairman Kevin Warsh also stated in his speech that inflation has been running above the 2% target and that short term interest rates are the predominant tool to manage inflation. These opposing dynamics will likely result in gold prices holding steady. Moving into 2H2026, central banks are expected to remain significant buyers, and demand will likely remain supported by Asian buying and slightly higher technology demand from AI investment. Overall, these conditions are likely to support output, and gold production is expected to increase modestly. Beyond gold, the broader metals environment remains constructive. Demand for lead and silver is expected to grow with the electrification megatrend, where both materials are key inputs in batteries, electronics, etc. Meanwhile, demand for zinc is expected to continue to grow with infrastructure and automotive demand, since it is crucial for galvanization.
Transfer to Main Board. As a testament to its track record of strong earnings, which has grown tenfold since 2023, CNMC has successfully transferred from Catalist to the SGX Main Board on 28 August 2026. With this transfer, CNMC is expected to benefit from broader analyst coverage and the stronger reputation of the SGX Main Board. Additionally, trading liquidity is expected to improve as there tends to be more volume on the SGX Main Board than on Catalist.
Maintained Strong Dividend Track Record for 1H2026. The Board announced an interim dividend of 0.4 SG cents per share and a special dividend of 1.6 SG cents per share. This totals 2.0 SG cents per share payout for 1H2026, representing a 34% dividend payout ratio and a 1.5% dividend yield. This extends the strong 37% FY2025 dividend payout ratio. We forecast FY2026 dividend payout ratio to come in at 34.6%, representing approximately 6 SG cents per share and a dividend yield of 4.4% at current price levels. This constitutes a 20% increase in dividends per share from 5 SG cents per share in FY2025 and a 0.7 ppt increase in dividend yield from FY2025.
Potential Risks include (i) volatility in gold prices, a sharp decline in gold prices would likely prompt a reevaluation of the stock’s fair value and could lead to underperformance, (ii) operational risks related to mining activities, (iii) regulatory and environmental risks and (iv) foreign exchange risk.
Forecast Revision and Recommendation. We reduced our FY2026 net profit forecast by 18% to US$66.9 million, driven by a downward revision in our gold price assumption to US$4,453 from US$5,300, based on Bloomberg consensus estimates and accounting for the realized price of gold in 1H2026. Correspondingly, FY2027 net profit forecast was reduced by 27% to US$70.8 million, due to a downward revision in gold price assumption to US$4,600 based on Bloomberg consensus estimates. This reflects the tapering in gold price growth expected for the rest of 2026 and going into 2027. Consequently, we maintain our BUY recommendation and revise our target price downwards to S$2.01 from S$2.41 as we update our valuation based on refreshed FY2026 and FY2027 estimates. This represents a 48.9% upside from current levels.
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| MAYBANK SECURITIES | |
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ISOTeam (ISO SP) Drones in FY27E
Maintain BUY with a lower TP of SGD0.09 ISOTeam reported FY26 revenue of SGD0105.7m and NPAT of SGD4.9m, below our forecast of SGD7.0m, mainly due to raw material and diesel price cost increases and also a project that missed its recognition dateline. We expect FY27E to be a better year but margins may not be as high as initially expected due to the delayed deployment of its drone which should now happen only in Jan 2027. We cut our FY27/28E PATMI by 39.3% and 31.4% and lower our TP to SGD0.09 from SGD0.12, based on 11x FY27E P/E. Maintain BUY.
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