The Trading Floor - Q1 2019

Discussion in 'The Trading Floor' started by Amator, Jan 1, 2019.


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  1. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 22): RHB Research is keeping Wilmar International as its top plantation sector and country pick despite a tough 4Q18.

    The latest quarter saw the group hit by challenges including an African swine fever outbreak in China and a provision for impairment on its goodwill and sugar milling assets in Australia.

    Wilmar saw its earnings fall 52.9% to US$200.9 million ($271.5 million) for the 4Q18 ended December, from US$426.7 million a year ago.

    Excluding non-operating items, its 4Q18 core net profit was 15% lower at US$337 million, due to weaker oilseeds and grains contribution.

    “FY18 core PATMI came in at US$1.3 billion, up 27% y-o-y, and in line with our expectation and 8% above the Street estimate,” says RHB analyst Juliana Cai in a report on Friday.

    The brokerage is keeping its “buy” call on Wilmar, but putting its target price of $3.58 under review pending its analyst briefing.

    “The tropical oils segment was the key to its outperformance, having benefitted from lower CPO costs and consistently strong demand for biodiesel and downstream products,” says Cai. “Moving into FY19, we expect the tropical oils segment to continue being the key driver of Wilmar’s performance.”

    While Wilmar’s oilseeds and grains segment saw lower crushing margins as a result of weaker lower meal demand caused by the African swine fever outbreak in China, CGS-CIMB Research analyst Ivy Ng Lee Fang says it performed “better than expected”.

    “We had forecasted a lower crush margin in view of the outbreak of African swine fever,” Ng explains.

    “We were pleasantly surprised by strong showings from its tropical oils division in 4Q18, despite lower palm products prices during the quarter as processing margins did better,” she adds. “Its associates and joint ventures also delivered better-than-expected 4Q18 results thanks to stronger profit contributions from China, Europe and Vietnam.”

    The brokerage is maintaining its “add” rating on Wilmar, but lowering its target price to $3.96 from $4.10 previously.

    The lower target price is due to a 2-3% cut in earnings estimates for FY19-20 to reflect lower crush margins.

    As at 2.24pm, shares in Wilmar are trading 14 cents lower, or down 4.1%, at $3.25.

    According to CGS-CIMB estimates, the stock is trading at a price-to-earnings (PE) ratio of 13.3 times and a dividend yield of 3.0% for FY19.
     
  2. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 22): Analysts are maintaining a positive stance on ST Engineering, despite a drop in the group’s 4Q18 and FY18 earnings.

    ST Engineering recorded a 26% y-o-y drop in its 4Q18 earnings to $124.5 million, bringing FY18 earnings to $494.2 million, 2% lower y-o-y.

    Revenue for the quarter was 5% higher y-o-y at $1.77 billion, while profit before tax dropped 7% y-o-y to $160.5 million.

    Following the announcement, Maybank Kim Eng is keeping its “buy” call on ST Engineering with a lower target price of $4.25 from $4.35 previously.

    For the 4Q18 and FY periods, the group’s results were peppered with one-off items, mostly in relation to the group’s periodic business portfolio evaluation and rationalisation.

    These included divestment losses from closure of a pilot training school in the US and a road construction entity in India, full impairment of auto MRO and road construction businesses in Brazil and an SG&A increase for transaction costs (advisory and legal fees) related to its pending acquisition of MRAS.

    In a Thursday report, analyst Neel Sinha says, “A relatively small area of the business that continues to be a drag is its US computer hardware subsidiary VT Miltope.”

    Meanwhile, the project pipeline and outlook for FY19 for Aerospace, Electronics and Land Systems remains positive. But the Marine segment outlook is muted due to the industry slump.

    Nonetheless, segment pre-tax profit has been growing sequentially for four quarters indicating that cost control and right-sizing measures are bearing fruit.

    Sinha remains positive on the group’s growth fundamentals.

    RHB Research also continues to rate ST Engineering a “buy” with a higher target price of $4.10 from $3.97 previously.

    In a Friday report, analyst Shekhar Jaiswal says, “ST Engineering should continue to register a profit growth revival, with 2019F growth to exceed the 9% registered in 2018.”

    He also predicts the group’s FY19 profit growth will be aided by ongoing contributions from Aerospace, delivery of smart city-related contracts in and outside Singapore by Electronics, and defence-related contracts and improvement in earnings for Marine.

    On Feb 18, Singapore’s finance minister Heng Swee Keat announced the country’s Budget 2019. He said that some $22.7 billion or over a quarter of the total budget expenditure will go to the defence and home sector. Half of the group’s revenue is derived from defence-related contracts, and it may benefit from this budget increase.

    The group has reported an outstanding orderbook of $13.2 billion, providing revenue visibility for two years, while $4.9 billion will be delivered in 2019. Baring the risk of a trade war escalation, the group remains confident of witnessing a revival in Aerospace order wins in 2019.

    Similarly, CGS-CIMB Research is maintaining its “add” recommendation on ST Engineering with a higher target price of $4.08, compared to $3.94 previously.

    The group’s Aerospace unit recorded a flat FY18 net profit of $245 million compared to the previous year, which reflected the MRAS acquisition cost, as well as net divestment gains from the sale of Airbus Helicopters, STAG and pilot training school during the year.

    Upcycle trend in engine maintenance repair remains and management expects to trend industry’s growth of 5-6% per annum.

    However, the Components outlook is slightly challenged by heightened delivery of new generation aircraft such as A320neo and B737, which defer components replacement. PTF programme will support the EMS revenue, but the learning curve costs could hamper margins in the short-term.

    In a Friday report, analyst Lim Siew Khee says, “Therefore, completing the MRAS acquisition is critical for Aerospace’s growth. With MRAS, we project 13-26% y-o-y net profit growth for Aerospace in FY19-20F.”

    As at 1.05pm, shares in ST Engineering at trading at $3.68 or 4.9 times FY19 book with a dividend yield of 4.2%.
     
  3. Amator

    Amator Well-Known Member

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    OCBC Research:-

    ST Engineering: Strong underlying operating performance

    Singapore Technologies Engineering (STE) delivered a 2.7% YoY rise in revenue to S$6.7b and a 1.7% fall in net profit to S$494m in FY18, compared to ours (S$532m) and the street’s (S$539m) expectations. Excluding one-off charges of S$32.6m, net profit would have been 9% up at S$527m, which would have been in line with our expectations. Underlying operating performance remained strong for the group. New contracts announced amount to about S$5.24b in FY18, bringing order book to S$13.2b, of which S$4.9b is expected to be delivered in FY19. Looking ahead, the Aerospace segment is likely to be occupied with the integration of MRAS this year upon completion of transaction. We fine tune our estimates and our FCFF-based FV rises slightly from S$3.95 to S$4.01. Current dividend yield is 4.0%.
     
  4. Amator

    Amator Well-Known Member

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  6. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 22): Oversea-Chinese Banking Corporation (OCBC Bank) reported earnings of $4.49 billion for the FY18 ended Dec, up 11% from $4.05 billion a year ago.

    This was driven by record earnings from the group’s banking operations which rose 22% year-on-year, led by income growth, disciplined cost control and lower allowances. The group’s FY18 return on equity increased to 11.5% from 11.0% a year ago.

    For 4Q18, the group posted 11% lower earnings of $926 million from 4Q17 due to a decline in earnings contribution from Great Eastern Holdings (GEH) although net profit after tax from banking operations grew 22% to $817 million.

    Net interest income rose 7% to $1.52 billion from $1.42 billion in 4Q17. This was driven by loan growth and a 5 basis points rise in NIM to 1.72%.

    Non-interest income fell 32% to $830 million, led by a drop in investment and insurance income from GEH. Net fees and commissions also declined 4% from a year ago to $474 million.

    OCBC said higher credit card, loan and trade-related fees were more than offset by a fall in wealth management fees attributable to subdued investment sentiments in the current market environment.

    Nonetheless, Bank of Singapore continued to report strong net new money inflows, which increased private banking assets under management (AUM) to US$102 billion ($139 billion) as at Dec 31 2018, up 3% from a year ago.

    4Q18 net trading income was lower at $9 million as compared to $99 million a year ago, largely attributable to unrealised mark-to-market losses in GEH’s investment portfolio as a result of unfavourable market conditions. Excluding GEH, trading income from banking operations was 5% higher year-on-year.

    Operating expenses for 4Q18 of $1.08 billion were unchanged from the previous year, as costs were tightly-controlled. Allowances of $205 million for the quarter were 14% higher than $178 million in 4Q17.

    Customer loans grew 9% year-on-year to $258 billion while customer deposits were up 4% at $295 billion, with current account and savings (CASA) deposits representing 46.4% of total non-bank deposits. The group’s loans-to-deposits ratio was 86.4% as compared to 82.5% a year ago.

    The average Singapore dollar and all-currency liquidity coverage ratios for the group in 4Q18 were 265% and 156% respectively, while the net stable funding ratio was 109%.

    The group’s Common Equity Tier 1 capital adequacy ratio (CAR), Tier 1 CAR and Total CAR as at Dec 31 2018 were 14.0%, 14.8% and 16.4% respectively. The group’s leverage ratio was 7.2% as at Dec 31 2018.

    OCBC has proposed a final tax-exempt dividend of 23 cents per share. Together with the interim dividend of 20 cents, this will bring the FY18 total dividend to 43 cents, up 16% or 6 cents, from 37 cents in FY17.

    CEO Samuel Tsien says, “Looking ahead, global economic growth is expected to slow on concerns of continued trade and geopolitical tensions, subdued market and investment sentiments and rising policy risks in the advanced economies. In spite of the uncertain outlook, we are confident that our focused strategy, strong capital and funding base, and disciplined cost control will allow us to continue to prudently expand our franchise in our key markets and support our customers.”


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  7. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 22): UOB Group reported record earnings of $4.01 billion for the full year of 2018, up 18% from a year ago.

    Total income rose 6% to S$9.12 billion, led by strong growth in both net interest and fee and commission income.

    For 4Q18, earnings of $916 million was 7% higher than a year ago, but was 12% lower than 3Q18 as market uncertainties took hold.

    Net interest income rose 10% to $1.61 billion led by 11% growth in loans while net interest margin dipped slightly to 1.80%.

    Net fee and commission income declined 8% to $467 million as higher fees from credit cards were offset by lower wealth management and loan-related fees amid market uncertainties.

    Other non-interest income fell 46% to $140 million mainly due to unrealised mark-to-market on investment securities arising from market volatility.

    Total expenses fell 4% to $984 million driven by lower revenue-related and staff costs. The cost-to-income ratio improved to 44.4% as compared with 46.0% a year ago.

    Total allowances declined 9% to $128 million as the provision for higher allowances on the oil and gas and shipping sectors was made in the same quarter last year. The credit costs on impaired loans stood at 22 basis points for the quarter.

    Despite market volatility, the group’s funding position and capital base stayed strong, said UOB.

    Gross loans and deposits grew 11% and 7% year on year to $262 billion and $293 billion respectively, with a loan-to-deposit ratio of 88.2% as at Dec 31 2018.

    The group’s Common Equity Tier 1 capital adequacy ratio (CAR) remained robust at 13.9%. Record earnings underpinned the improvement in return on risk-weighted assets to 1.93% from 1.63% a year ago as well as return on equity to 11.3% from 10.2% last year.

    The board has recommended a final dividend of 50 cents each, and a special dividend of 20 cents. Together with the interim dividend of 50 cents, the total dividend for the financial year ended Dec 31 2018 amounts to $1.20 cents per ordinary share, an increase of 20% over last year. Inclusive of the special dividend, this represents a payout ratio of approximately 50%.

    Wee Ee Cheong, UOB’s Deputy Chairman and Chief Executive Officer, says, “As global uncertainties persist in 2019, we will stay disciplined in pursuing sustainable growth, while maintaining a risk-focused approach and equipping our people for the future. As a long-term player with deep knowledge of and an extensive presence that connects Southeast Asia, we are best positioned to ride on the region’s immense growth potential.”

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  8. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): Genting Singapore (GENS) announced earnings of $150.2 million for the 4Q ended Dec 2018, rising 12% y-o-y from its earnings of $134 million in 4Q17 due to higher revenue.

    This brings the group’s earnings for the full year to $755.4 million, up 10% from $685.6 million in the previous year.

    Revenue for the latest quarter under review grew 15% on-year on the back of strong performance from the attractions business, which did well with an average daily visitation of over 21,000. There was also increased average visitor spend across all offerings including Universal Studios Singapore, S.E.A. Aquarium and Adventure Cover Waterpark.

    Meanwhile, the hotels segment – which includes hotels like Hard Rock Hotel and Equarius Hotel – maintained a strong occupancy rate of 95%.

    Adjusted EBITDA grew 12% y-o-y to $286 million from $255.1 million in 4Q17.

    As at end-Dec 2018, cash and cash equivalents stood at $4.2 billion compared to $3.8 billion a year ago.

    GENS is proposing a final dividend of 2 cents for FY18, unchanged from a year ago.

    Going into 2019, the group says it remains cautious of an ambiguous economic environment and ongoing geopolitical friction that is clouding the growth of the Asian gaming and tourism market. It also intends to continue refining its marketing focus and improve its customer experience, bearing in mind the increasing competition from newly-opened gaming facilities as well as aggressive marketing tactics.

    As GENS awaits the Japanese government’s published regulations for the establishments of integrated resorts (IRs), the group says it is deploying significant resources on the ground and actively developing bid design and concepts as it engages stakeholders to prepare for the formal bidding process, which is expected to commence in 2H19.

    “We are dedicating substantial resources in the planning and reinvestment of Resorts World Sentosa to ensure that we remain the top resort destination in Asia Pacific,” says the group of its Singapore operations.
     
  9. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): Wilmar International saw its earnings fall 52.9% to US$200.9 million ($271.5 million) for the 4Q18 ended December, from US$426.7 million a year ago.

    The decline was due mainly to a provision for impairment on the Australian sugar milling assets. Wilmar incurred a non-operating loss of US$129.8 million during the quarter, compared to a non-operating gain of US$65.5 million a year ago.

    This brings full-year earnings for FY18 to US$1.13 billion, some 5.7% lower than earnings of US$1.20 billion a year ago.

    4Q18 revenue dipped 3.0% to US$11.10 billion, from US$11.45 billion a year ago.

    This was mainly due to lower commodity prices, even as the group continued to report growth in sales volume for all segments.

    Gross profit fell 8.8% to US$975.1 million, from US$1.07 billion a year ago.

    Core net profit decreased by 10.3% to US$334.7 million, mainly due to the African swine fever outbreak in China affecting the group’s Oilseeds and Grains segment, coupled with weaker commodity prices that impacted the upstream operations in Sugar Milling and Palm Plantation.

    For 4Q18, higher effective interest rates and deposits which was seen throughout the year led finance income to increase by 53.4% to US$123.2 million, while finance cost increased by 65.6% to US$233.0 million.

    Share of results of joint ventures and associates increased by 37% to US$152.8 million in 4Q18, on the back of stronger contributions from the group’s investments in China, Europe and Vietnam.

    Earnings per share (EPS) fell % to 3.2 US cents for 4Q18, compared to EPS of 6.7 US cents in 4Q17.

    As at end December, cash and cash equivalents stood at US$1.60 billion.

    Wilmar has recommended a final dividend of 7 cents per share for the period, unchanged from a year ago.

    Together with an interim dividend of 3.5 cents paid earlier, this brings total dividends for FY18 to 10.5 cents – 5% higher than total dividends of 10 cents a year ago.

    “The group performed well in 2018 even though we were affected by low palm oil and sugar prices in our upstream operations and volatile soybeans market created by the US/China trade tensions,” says Kuok Khoon Hong, chairman and CEO of Wilmar.

    “The group’s success in its strategy to develop more stable downstream processing and branded consumer products enabled us to achieve growth and maintain profit in this challenging operating environment,” he adds.

    Moving forward, Kuok says Tropical Oils should continue to do well in 2019 with the recent recovery of crude palm oil prices and satisfactory margins in downstream processing, while the group’s other businesses are also expected to perform favourably.

    “Looking ahead, we are reasonably optimistic that performance for FY2019 will be satisfactory,” says Kuok.


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  10. Amator

    Amator Well-Known Member

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    OCBC Research:-

    CapitaLand Limited: Beating its KPIs like a boss

    CapitaLand’s 4Q18 results fell slightly short of our expectations despite an increase in its operating PATMI by 26.1% YoY to S$213.8m. A first and final DPS of 12 S cents was declared, similar to FY17 and translates into a dividend yield of 3.5%. For the full-year, management was active on capital recycling, having made divestments amounting to S$4.0b (target: S$3b). Proceeds were redeployed into S$6.1b of new investments. FY18 ROE was 9.3% (target: at least 8%), higher as compared to the 8.6% registered in FY17. CapitaLand's real estate AUM rose 12% to S$100.1b, as at end-2018, surpassing its target to hit S$100b by 2020. Notwithstanding headwinds in China, CapitaLand remains optimistic on the outlook of the residential market, especially on Tier-1 and selected Tier-2 cities. Its projects there are still able to command margins ranging around 10-30%. After adjustments, we derive a slightly higher fair value estimate of S$3.98 (previously: S$3.96).

    Sembcorp Marine: A balancing act

    Sembcorp Marine (SMM) reported a 0.2% YoY rise in revenue to S$913.2m and net profit of S$5.9m in 4Q18, bringing full year net loss to S$74.1m vs. our forecast of S$85.6m net loss and the street’s expectation of a S$97m net loss. It is encouraging to see the group swing into the black after being in the red in the previous quarters, but what would catalyse the stock price is still new order flow that is sustainable going forward. Considering that future new orders may have increased working capital needs, and the group’s current balance sheet position (net gearing 1.44x), SMM has to be selective when securing new orders (e.g. not too unfavourable payment terms). We fine-tune our estimates and our fair value estimate rises from S$1.73 to S$1.77.

    ST Engineering: Underlying operating performance still strong
    Singapore Technologies Engineering (STE) delivered a 2.7% YoY rise in revenue to S$6.7b and a 1.7% fall in net profit to S$494m in FY18, compared to ours (S$532m) and the street’s (S$539m) expectations. Excluding one-off charges of S$37m before tax, net profit would have been 9% up at S$527m, which would have been in line with our expectations. The decrease in net profit mainly arose from the Land Systems division (-34.5% to S$52.9m), partially offset by higher contribution from Electronics (+17.7% to S$186.5m) and Marine (+18.2% to S$45.2m). A final dividend of 10 cents has been declared, bringing the full year dividend to 15 cents, which is the same as a year ago.
     
  11. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): CGS-CIMB Research, DBS Vickers Securities and OCBC Investment Research are maintaining “buy” on CapitaLand with the respective price targets of $3.56, $3.62 and $3.98, after the group posted 71.2% higher earnings of $476 million for the 4Q ended Dec 2018.

    In a Wednesday report, CGS-CIMB analyst Lock Mun Yee says she continues to like the stock for its robust residential sell-through rate in China, the management’s active capital recycling, and its proposed acquisition of Ascendas-Singbridge to create Asia’s largest diversified real estate group.

    Despite cutting FY19-20F earnings after tweaking residential margins and tax rate assumptions, especially in China, Lock’s revised target price is one cent higher than previously upon accounting for CapitaLand’s latest balance sheet metrics.

    “As [CapitaLand’s] net debt-to-equity ratio is still healthy at 0.56 times, we anticipate the group to continue recycling and deploying capital into new investments… [The proposed acquisition of Ascendas-Singbridge] would strengthen the group’s presence in its core markets as well as provide it the scale to venture into new sectors such as logistics and business parks. This would enable to enable it to tap new growth opportunities in the medium-term,” comments Lock.

    DBS analyst Derek Tan foresees CapitaLand’s FY20 PATMI hitting a decade-high given its strong income visibility, with more than RMB15.7 billion ($3.2 billion) in presales to be recognised from FY19 onwards.

    Tan is also positive on the upcoming local residential launches of Pearl Bank Apartment and Sengkang Central in 2019.

    Even with cooling measures expected to put a dent on potential investor demand, he believes Pearl Bank Apartment’s unique attributes, coupled with its prime location closed to the central business district (CBD), may attract buyers if it is priced well.

    “We estimate a breakeven of S$2,200-2,300 psf. In addition, the launch of a mixed-use development in Sengkang Central (50%-50% JV with CDL) will offer an additional 700 units of residential land bank for the group in Singapore,” says the analyst.

    OCBC’s slightly higher fair value estimate of $3.98, compared to $3.96 previously, comes even as the latest set of results fell slightly short of expectations.

    “If we exclude the gain from the sale of Nassim in 1Q17, FY18 PATMI would instead have grown 13.8% [instead of falling 5.9% to $872.2 million, which formed 94.4% of FY18 forecasts],” says OCBC analyst Andy Wong in a Thursday report.

    He also highlights how real estate assets under management (AUM) have crossed the $100 billion mark during the latest year under review, which is earlier than targeted.

    “CapitaLand's real estate AUM rose 12% to S$100.1b, as at end-2018, surpassing its target to hit S$100b by 2020. Although headwinds remain in China, CapitaLand continues to hold an optimistic view on the outlook of the residential market, especially on Tier-1 and selected Tier-2 cities. Back home, CapitaLand remains open to land bank replenishment opportunities, but only if the price is right,” notes Wong.
     
  12. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): Analysts believe Sembcorp Marine (SMM) could be on the cusp of a turnaround, after swinging out of the red with earnings of $5.9 million for 4Q18.

    While the group’s 4Q performance was a long way off its restated 4Q17 earnings of $117.3 million, it had beat expectations of another net loss in the latest quarter.

    “4Q18 net profit of $5.9 million beat our expectation of $24 million losses,” says CGS-CIMB Research analyst Lim Siew Khee in a Wednesday report.

    The 4Q18 earnings brings Sembmarine’s net loss for the full-year to $74 million for FY18, which included a loss of $34 million on the sale of the West Rigel rig.

    According to Lim, this is lower than CGS-CIMB’s forecast of a net loss of $104 million in FY18, and consensus forecast of a net loss of $98 million.

    As such, CGS-CIMB is keeping its “add” rating on Sembmarine, which it believes could be at a “turning point”.

    However, the brokerage is lowering its target price to $2.21, from $2.46 previously, on the back of a 2-21% cut earnings per share (EPS) estimates for FY19-20 due to lower expectations on order wins and higher depreciation.

    CGS-CIMB is lowering its FY19-20 order targets to $2-2.5 billion, from $3.5 billion per year previously, after order wins in 2018 came in at $1.2 billion, falling below the expected $1.5 billion.

    “It is encouraging to see the group swing into the black after being in the red in the previous quarters, but what would catalyse the stock price is still new order flow that is sustainable going forward,” OCBC Investment Research analyst Low Pei Han.

    According to Low, offshore rig orders will take some time to recover as the market remains oversupplied.

    “Management also reminded that the lead time for new orders, depending on the size and scope of work involved, may take six months to slightly more than a year, as solutions are more customized (rather than standardized) and a certain level of co-development with the client may be involved,” Low adds.

    OCBC is maintaining its “hold” call on Sembmarine and raising its fair value estimate to $1.77, from $1.73 previously.

    On the other hand, DBS Group Research is more bullish on Sembmarine’s contract wins.

    “While order wins, a critical leading indicator for earnings recovery, has been lagging behind expectations in 2018… we remain optimistic that offshore capex is set to recover,” says analyst Ho Pei Hwa in a Thursday report. “We believe SMM’s strong order pipeline would translate into $3 billion or more in new orders in 2019.”

    DBS is reiterating its “buy” recommendation on Sembmarine with an unchanged target price of $2.40.

    The way Ho explains it, Sembmarine’s share price has yet to reflect the brighter outlook ahead, and an uptick in order flow would be a key re-rating catalyst.

    “Order wins and order book trends are often the key drivers of rig builders’ share prices and earnings,” Ho adds. “SMM is turning the corner with operational improvements and more upbeat order win prospects.”

    As at 3.18pm, shares in Sembmarine are trading 1 cent higher, or up 0.6%, at $1.69. According to DBS estimates, this implies an estimated price-to-earnings (PE) ratio of 68.3 times and a dividend yield of 0.6% for FY19.
     
  13. Amator

    Amator Well-Known Member

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    MayBank KE :-

    DBS Group - No time to be sentimental (DBS SP, CP SGD25.08, BUY, TP SGD29.56, Banks)


    DBS will transfer retail equity trading to the bank from DBS Vickers. DBS is looking to drive retail equity trading online from the traditional ‘remisier’ driven model, with significant investments in technology. This should lower costs and help faster scaling. These actions are consistent with the group’s strategy of returning to their commercial banking roots focusing on growing interest income and wealth management. With rising ROEs and a dividend yield of 5.5%, maintain BUY.
     
  14. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): City Developments recorded earnings of $77.9 million for 4Q18, down 54.7% from $171.9 million a year ago on lower revenue and higher expenses.

    Revenue for the quarter fell 40.6% to $788.3 million from restated 4Q17 revenue of $1.3 billion, arising mainly from variances in project and unit revenue recorded.

    The main contributors of revenue for the latest quarter was New Futura, The Tapestry and Park Court Aoyama The Tower – whereas in 4Q17, it was Gramercy Park and The Brownstone executive condominium (EC), which obtained TOP in that quarter and recorded entire revenue from sold units then.

    Administrative expenses grew 3.6% to $140.2 million from $135.3 million a year ago.

    Meanwhile, other operating expenses rose 7.3% to $206.7 million from $192.6 million previously due to impairment losses on property, plant and equipment and investment properties of $94.1 million. In Q417, the impairment loss was $52.2 million.

    CDL’s latest 4Q results brings the group’s earnings for the full year to $557.3 million, up 6.7% from $522.2 million in FY17.

    With full-year revenue of $4.2 billion, this marks the first time the group has crossed the $4 billion threshold.

    On top of a final dividend of 8 cents per share, CDL is also recommending a special final dividend of 6 cents per share, bringing total dividends for FY18 to 20 cents per share as opposed to 18 cents in FY17.

    “We are confident that when the global issues are stabilised, Singapore is well-poised to recover given its strong fundamentals. The residential property market sentiments should thereby improve with pent-up demand. Singapore remains attractive for investments and talents given its political stability, high quality of living and established infrastructure,” says Kwek Leng Beng, executive chairman of CDL.

    “While we continue to strengthen our foothold in Singapore, we will also look abroad to diversify for growth and manage our risk,” he adds.

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  15. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): Sembcorp Industries reported earnings of $106 million for the 4Q ended Dec 2018, representing a 10% decline from restated 4Q17 earnings of $118 million as the Marine segment continued to impact the absorption of overhead costs.

    This brings Sembcorp’s FY18 earnings to $347 million, down 9% from restated earnings of $383 million a year ago.

    Over 4Q, the group recorded a 7% rise in turnover to $2.6 billion from $2.4 billion the previous year, driven by higher contributions from the Utilities businesses.

    Utilities turnover, which grew 13% y-o-y to $1.6 billion in 4Q18, was mainly due to higher revenue in Singapore, which benefitted from higher High Sulphur Fuel Oil (HSFO) prices; higher volume and prices for India; higher generation from Teesside; and contributions from UK Power Reserve (UKPR), which was acquired in 2Q18.

    After accounting for exceptional items, the segment contributed to $65 million in net profit, up nearly fivefold from $14 million a year ago.

    The Urban Development segment, which comprise mainly associates or joint ventures accounted for under the equity method, registered a 33% lower turnover of $2 million compared to $3 million in 4Q17. Nonetheless, net profit for this segment grew 14% to $33 million from restated segmental net profit of $29 million.

    The Marine business’s turnover grew marginally y-o-y to $913 million from $912 million in 4Q17, as revenue recognition for newly-secured projects were partially offset by lower recognition for offshore platforms projects.

    Nonetheless, the segment’s net profit for the quarter fell 99% on-year to $1 million from $71 million in 4Q17 in the absence of the sale of a semi-submersible rig and continued low overall business.

    See: SembMarine reports FY18 loss of $74 mil; Expects business environment to stay challenging

    Sembcorp says it expects the overall market environment to remain challenging in 2019, especially for the offshore and marine (O&M) sector as it remains in a prolonged down cycle.

    With the consolidation of the Utilities business, the group expects this business to deliver a steady performance for the year as it continues to focus on lifting performance and investing in capabilities. It also intends to continue taking steps to manage costs at the Marine business.

    As for Urban Development, the group expect earnings growth in this segment to continue into 2019, underpinned by a strong orderbook in Vietnam as well as income from the sale of a residential development in China.

    The group has proposed a final dividend of 2 cents per share.

    Together with the interim dividend of 2 cents paid out in Aug 2018, this would bring the group’s total dividend for FY18 to 4 cents per share.

    “Our strategic initiatives will take time to bear fruit, especially given the prolonged offshore and marine downturn. However, as seen from our FY2018 results, our multi-business strategy provides resilience to the Group. By leveraging our strengths and embracing change, I am confident that the actions we are taking will put us in good stead as an integrated energy and urban company of the future,” says Neil McGregor, group president and CEO of Sembcorp.


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  16. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 21): ST Engineering reported a 26% drop in 4Q18 earnings to $124.5 million from a year ago.

    This brings FY18 earnings to $494.2 million, down 2% y-o-y. Revenue was up 3% at $6.7 billion for the year.

    For the quarter under review, group revenue came in 5% higher y-o-y at $1.77 billion while PBT dropped 7% y-o-y to $160.5 million.

    Excluding one-off charges of $25 million before tax, PBT would have been 7% higher y-o-y at $185.6 million, and earnings would have been 1% higher at $149.1 million if prior year’s one-off favourable US tax adjustment of $20 million was excluded as well.

    Compared to the same period last year, revenue for the Aerospace sector was down 13% at $647 million mainly due to lower project milestone completion for existing Airbus passenger-to-freighter conversions. Net profit was 27% lower y-o-y at $63.5 million due to loss from disposal of business entities and MRAS acquisition-related expenses.

    Revenue for the Electronics sector was $536 million, up 16% from $461 million a year ago and its net profit was $44.1 million, down 20% versus same period last year due to less favourable sales mix. The land systems sector’s revenue increased 29% y-o-y to $435 million due to higher project deliveries and it turned in a net loss of $0.7 million from net profit of $42.6 million a year ago due to one-off charges of about $20 million related to portfolio rationalisation and the absence of favourable U.S. tax adjustments.

    Revenue for the Marine sector was 6% higher at $139 million, and its net profit improved from $0.7 million a year ago to $14.5 million.

    ST Engineering ended the year with an order book of $13.2 billion, of which $4.9 billion is expected to be delivered in 2019.

    Its board has proposed a final dividend of 10 cents per share. Together with the interim dividend of 5.0 cents per share distributed in August 2018, shareholders will receive a total dividend of 15 cents per share for FY18.


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  17. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 20): Maybank KimEng, UOB KayHian and DBS Group Research are maintaining their “buy” for Netlink NBN Trust (NLT) as the market continues to search for high yields as Fed turns more dovish.

    In 3Q19, NLT reported revenue of $89 million, up 6.7% y-o-y and net profit of $19.6 million, down 9.4% y-o-y. In 9M19, net profit came in at $57.3 million. Residential fibre connections grew by a healthy 10.2% y-o-y and 3.5% q-o-q which is already higher than the projection provided in its IPO prospectus, due to accelerated migration to fibre for broadband and pay-TV.

    StarHub decided to migrate its customers of both residential broadband and pay-TV to an all-fibre network. It plans to cease provision of cable services after June 30 and retire its legacy hybrid fibre-coaxial (HFC) network.

    Non-residential fibre connections grew 5.8% y-o-y and 0.4% q-o-q to 45,700. Revenue contributions from non-residential segment grew 1.1% q-o-q. The slower growth could be caused by weak business sentiment as a result of trade conflict. However, management says NLT has maintained its market share of 35%.

    Non-building access point (NBAP) fibre connections grew 130.2% y-o-y and 14.2% q-o-q to 1,462. Revenue contributions from NBAP segment grew 1.5% q-o-q. NLT says it will continue to support telcos and government agencies on Smart Nation initiatives.

    DBS says NLT's one big advantage over REITs and business trusts is that a potential rise in the cost of capital could lead to higher regulated returns from 2022 onwards, translating into higher distributions. NLT has also hedged its interest rates till March 2021 and growth in distributions should translate into higher yields.

    NLT’s gearing is less than half of S-REITs’ with an ample debt-headroom to fund future growth; and NLT’s asset life is much longer than S-REITs as NLT incurs annual capex to replenish its regulated asset base, says DBS who has a target price of 87 cents or 32.6 times FY21F earnings.

    Meantime, UOB says NLT is the most defensive stock listed on the Singapore Exchange as it has low volatility but high liquidity; caters to basic necessities; has stable, recurrent and regulated revenue streams; is a beneficiary of higher domestic interest rates; is protected by high barriers to entry; and has a blue-chip customer base. UOB has a target price of 92 cents or 40 times FY21F earnings.

    On the other hand, Maybank says NLT will benefit from cable to fibre migration. StarHub’s more aggressive decommissioning of its cable network and migration of its subscribers to fibre broadband have been driving residential connections for Netlink. “This cements Maybank’s revenue forecasts moving into FY20E,” says UOB analyst Luis Hilado in his report. Maybank has a target price of 93 cents or 38.8 times FY21F earnings.
     
  18. plutus2

    plutus2 Well-Known Member

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    yes, market is directionless... we can do suck thumb and wait
     
  19. nottibird

    nottibird Moderator

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  20. Amator

    Amator Well-Known Member

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    SINGAPORE (Feb 20): CapitaLand Limited reported 4Q18 earnings of $475.7 million, up 71.2% on-year from its restated earnings of $277.8 million due to better operating performance, as well as higher gains from asset recycling and revaluation of investment properties.

    Revenue for 4Q grew 21.3% to $5.6 billion compared to $4.6 billion a year ago.

    The growth in revenue was attributed to a higher handover of units from residential projects in China and Vietnam compared to the previous year, and rental revenue from newly acquired and operational properties in China, Germany and the US.

    Residential projects which contributed to revenue this quarter were Vermont Hills in Beijing, New Horizon in Shanghai and Century Park East in Chengdu, Sky Habitat and The Interlace in Singapore.

    Collectively, the two core markets of Singapore and China accounted for 75.9% of the group’s revenue, versus 74.5% in 4Q17.

    EBIT grew to $4.1 billion from $3.3 billion in 4Q17, offset in part by lower contributions from CapitaLand’s residential projects in Singapore, and absence of the gain from the sale of The Nassim.

    The latest set of quarterly results brings CapitaLand’s total earnings for FY18 to a total of $1.8 billion, 12.3% higher y-o-y from restated FY17 earnings of $1.6 billion and the highest net profit recorded since 2008.

    Full-year return on equity (RoE) grew to 9.3% from 8.6% the year before.

    A final ordinary dividend of 12 cents per share has been proposed for FY18.

    Going forward, the group expects to maintain its disciplined pace of asset recycling as well as build on the portfolio’s diversity and asset strengths by re-investing in higher yielding, complementary opportunities to grow its recurring income streams.

    Lee Chee Koon, president and group CEO of CapitaLand, says he believes the group’s intended acquisition of Ascendas-Singbridge will strengthen CapitaLand’s presence and pipeline in the core markets of Singapore and China.

    “While CapitaLand continues to leverage and strengthen our existing business and asset portfolio, we will seek out new growth drivers to bring us into the next phase of growth… [The Ascendas-Singbridge acquisition] will give us immediate scale in new economy sectors such as logistics and business parks, and in growth markets such as India, the US and Europe,” says Lee.
     
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