The Trading Floor - May 2018

Discussion in 'The Trading Floor' started by Amator, Apr 30, 2018.


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  1. Amator

    Amator Well-Known Member

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    SINGAPORE (May 18): CGS-CIMB Research is maintaining its “add” call on Singapore Airlines (SIA) with a target price of $11.75.

    The airline company yesterday announced that it has reversed out of the red with 4Q18 earnings of $181.8 million, from losses of $138.3 million in 4Q17, as FY18 earnings more than doubled from a year ago to $892.9 million.

    4Q17/18 revenue rose 8.2% to $4.02 billion, from $3.71 billion a year ago, on the back of stronger passenger and cargo flown revenue, partially offset by higher expenditure.

    Over the past four quarters, SIA mainline’s core EBIT has been improving, as growth in revenue passenger kilometre (RPK) demand lifted loads y-o-y, while available seat kilometre (ASK) capacity remained flat. Its rate of yield declines had also started easing, before rising 1% y-o-y in 4Q18.

    Core EBIT for SIA Cargo and Scoot has also been improving, but SilkAir reported significantly lower profits, as it had to discount heavily to fill up its expanded capacity base.

    Operating profit for SilkAir was down by $58 million to $43 million in FY18 compared with the same period last year.

    Meanwhile, SIAEC saw 4Q18 earnings increase by 19.8% y-o-y, but FY18 earnings fell primarily on lower fleet management revenue.

    After five years of flat capacity, SIA mainline is now guiding for 5% ASK growth in FY129 as the group is confident that it has the right aircraft to expand, with the resumption of its non-stop Los Angeles and New York flights on the A350ULR, as well as the 787-10 and the regional A350-900 for medium-haul flights.

    Fleet efficiency will also improve after the group removes several classic 777s.

    In a Friday report, analyst Raymond Yap says, “We are banking on SIA mainline delivering matching 5% RPK growth in FY19F, with its new A380 and 787-10 products helping to grow its pool of customers.”

    For the SIA group’s passenger business as a whole, SIA guided for “strong advance passenger bookings” and “continued stabilisation in yields” despite “intense competition and cost pressures”.

    “We expect SIA mainline to build on the 1% y-o-y increase in 4QFY18 yields (the first yield increase in three years) as we head into FY19F,” adds Yap.

    Furthermore, the rise in fuel prices would impact the group’s unhedged competitors more than itself, possibly leading to an industry-wide increase in ticket prices, which the group can ride on.

    During FY18, Scoot and SilkAir grew capacity at around the same rate. However, SilkAir had to cut yields materially to maintains loads, while Scoot did not have to do so.

    SIA this morning announced that its regional wing SilkAir will be merged into SIA after undergoing significant aircraft cabin upgrades with investment of more than $100 million.

    The analyst views this merger as akin to the Scoot-Tiger merger earlier, as it will save operating costs and merge the booking platforms, as well as project a unified brand to customers.

    “This is positive for the SIA group in the long term as it will have one LCC brand – Scoot – as well as one FSC brand – SIA,” says Yap.

    “While SIA will still be negatively affected by pricier oil, its hedging position gives it a competitive advantage against Cathay Pacific, and the unhedged Chinese and Middle Eastern Gulf carriers,” he adds.
     
  2. Amator

    Amator Well-Known Member

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    SINGAPORE (May 18): CGS-CIMB Securities and RHB Research have upgraded their respective recommendations on CapitaLand Commercial Trust (CCT), after the REIT on Thursday marked its maiden overseas entry with the acquisition of a 94.9% stake in Frankfurt office property Gallileo.

    The freehold Grade A property, valued at €356 million ($569.6 million), is located in the prime Central Business District (CBD), also known as the Banking District, in the central German city recognised as a major financial hub.

    “The acquisition is DPU-accretive and strengthens its portfolio with a longer WALE, higher occupancy rate and freehold land tenure,” says RHB analyst Vijay Natarajan in a report on Friday.

    “However, investors’ reactions may be mixed, as the acquisition comes at a time when Singapore’s office market is recovering,” he cautions.

    RHB is upgrading CCT to “neutral” with a slightly higher target price of $1.65, raised from “sell” with a target price of $1.63 previously.

    Meanwhile, CGS-CIMB is upgrading CCT to “add” with a marginally higher target price of $1.94, from “hold” at $1.93 previously.

    “We raise our FY18-20F DPU estimates by 0.4-1.4% to factor in the new contributions,” says lead analyst Lock Mun Yee in a report on Thursday.

    “Not only is the property currently under-rented, there is also room for further yield improvements given the Commerzbank lease is adjusted based on inflation index every 2 years. This will provide more forward earnings growth,” she says.

    In addition, Lock notes that CCT intends to hedge its overseas income on a 4-quarter rolling basis with no near-term refinancing risks.

    “CCT’s share price had weakened over the past week and now offers close to 18% total return,” she adds.
     
  3. plutus2

    plutus2 Well-Known Member

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    for those playing AEM.. today share split day
     
  4. plutus2

    plutus2 Well-Known Member

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    WOOW bro, thanks for the "breakfast".. i did have 2 sunny side up this morning
     
  5. plutus2

    plutus2 Well-Known Member

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    Good morning snipers.. TGIF
     
  6. nottibird

    nottibird Moderator

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  7. Amator

    Amator Well-Known Member

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    The issue price has been fixed at the top end of the price range at S$1.676 per New Unit (the “Issue Price”), as agreed between the Manager and the Joint Bookrunners and Underwriters, following a book-building process.


    resume trading 8.30am today ..........
     
  8. Amator

    Amator Well-Known Member

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    SINGAPORE (May 17): Singapore Airlines (SIA) reversed out of the red with earnings of $181.8 million for the 4Q ended March, from losses of $138.3 million a year ago.

    This brings full-year earnings to $892.9 million for FY17/18, more than double from earnings of $360.4 million a year ago.

    The higher full-year earnings were mainly attributable to a 69.7% surge operating profit to $1.06 billion, as well as the absence of SIA Cargo’s provision for competition-related matters and impairment of the Tigerair brand and trademarks last year.

    4Q17/18 revenue rose 8.2% to $4.02 billion, from $3.71 billion a year ago, on the back of stronger passenger and cargo flown revenue, partially offset by higher expenditure.

    SIA’s parent airline company turned around from a loss of $41 million last year to register an operating profit of $137 million in 4Q17/18. This was led by a $221 million increase of revenue, driven by 1.4% growth in traffic and a 1.0% increase in passenger yield.

    Scoot’s operating profit for the quarter rose 32% to $29 million, led by higher passenger flown revenue from a 16.7% growth in passenger carriage even as yield dipped 1.6% y-o-y.

    SIA Cargo reported an operating profit of $28 million during the quarter, reversing out of a loss of $5 million last year. Revenue rose $55 million as freight carriage grew 4.6% and cargo yield improved 8.5%.

    These were partially offset by an 89% plunge in SilkAir’s operating profit to $3 million in 4Q17/18, as major operating costs such as fuel, handling, and landing and parking costs rose faster than revenue gains. Passenger traffic improved 12.8% on the back of an 11.9% expansion in capacity, but yield contracted 11.4%.

    Meanwhile, operating profit for SIA Engineering fell 17% to $20 million on lower airframe and component overhaul activities and fleet management activities.

    As at end March, cash and cash equivalents stood at $2.57 billion.

    SIA has declared a final dividend of 30 cents per share for the period, nearly trebling from the final dividend of 11 cents per share a year ago.

    Including an interim dividend of 10 cents per share paid earlier, this brings total dividend for FY17/18 to 40 cents per share – double of the total dividend of 20 cents per share a year ago.


    Looking ahead, SIA says intense competition in key operating markets and cost pressures remain, despite stronger advance passenger bookings for the coming months and a continued stabilisation in yields.

    Over the next two years, SIA says it will continue on its transformation programme to further build on initiatives around enhancements to the customer experience, revenue growth, and improvements in operational efficiency.


    upload_2018-5-17_19-34-56.png
     
  9. nottibird

    nottibird Moderator

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    For Bro Plutus...



    [​IMG]


    [​IMG]
     
  10. sotong11

    sotong11 Well-Known Member

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    CCT at 2.09 ok to short?

    I shorted SGX .. 7.68
     
  11. nottibird

    nottibird Moderator

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  12. nottibird

    nottibird Moderator

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    Ya, I did think about that. But was too lazy to check it up.
    SingTel's free float is 5 times more than ST Engrg.
    But still... if ST Engrg is trading at 3.20 to 3.30... and SingTel is trading at 3.40... by comparison... if want to park money to
    do BUY & HOLD to earn dividend, ST Engrg will offer a higher dividend yield, I guess. Thanks.
     
  13. Amator

    Amator Well-Known Member

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    SinkTel float is so much bigger than STE (16,291.629m vs 3,120.204m) .... hence the div is "smaller" comparatively .....
     
  14. nottibird

    nottibird Moderator

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    Ya, I know what she means...that dividend will not be fixed at 17.5 cts anymore but will fluctuate depending on profits.
    I was hoping that the current 17.5 cts is based on a less than 60% of net profit so that going forward, we can expect more...not less.

    ST Engrg makes about $500+ million per year. Yet can pay 15 cts dividend.
    SingTel makes $780 million per quarter or $3.12 bn per year and yet pays only 17.5 cts dividend?
    ST Engrg trades at 3.48.
    SingTel trades at 3.46.

    So....................going forward, if SingTel's dividend drops to the 12 cts to 15 cts region and if the price of ST Engrg drops to the 3.20-3.30 region,
    the latter will become more attractive than SingTel becoz currently, SingTel's stockprice is suffering from an infection --- that of smart monies not
    coming back after leaving her over the last one year. They will come back only when we have a recession and that will be 2020 onwards.
     
  15. plutus2

    plutus2 Well-Known Member

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    She is smart to start setting shareholder expectation as the telco business get tougher by the day
     
  16. Amator

    Amator Well-Known Member

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    ok ....

    SinkTel current payout ratio is abt 70%, i think ..... what the CEO meant is going forward, the div will not be fixed at 17.5c ...... so if future profit declines, so will the div payout .....
     
  17. nottibird

    nottibird Moderator

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    Ya, I guess so. Thanks.

    Dai Lole... once you get your hands on analyst's reports on SingTel post-results, please post here.
    I am sure analysts have picked up what Management said about paying 60% to 75% of net profits as dividends.
    I am curious to know that means more than or less than 17.5 cts per year.
     
  18. Amator

    Amator Well-Known Member

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    wont take so long ... think latest tomorrow will resume liao ......
     
  19. nottibird

    nottibird Moderator

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    But will announce final price and resume trading before 23 May, usually...right?
    Otherwise those who want to buy to earn the dividend...cannot buy.
    And those who are SHORT and want to quickly cover to avoid paying the dividend will... aa1aa.gif
     
  20. nottibird

    nottibird Moderator

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    The group says it expects to maintain its ordinary dividends of 17.5 cents per share for the next two financial years.
    Thereafter, it will revert to the payout of between 60% and 75% of underlying net profit.

    -----------------------------------------

    Does anybody know whether 60% to 75% of underlying profits will invariably mean more than or less than the current 17.5 cts?
     
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