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Top pick for the day - Hang Seng Index

Shared By Stock Fanatic on Friday, December 19, 2014 | 19.12.14

Will the wedge support keep the Hang Seng Index from falling further?


It is still too early to call but what we believe is that there is likely one more retest of the 22,529 low

Only on a failure to do breakdown would the HSI rally back above the near term key resistance of 24,313

Singapore REITs - Better prepared for volatility ahead‏


• Focus in 2015 will be on interest rates

• Sector valuations not cheap

• CMT, FCT and Starhill Global REIT our top picks

Genting Malaysia - No Upstate New York gaming license for GENM


· What has happened? 
The New York Gaming Facility Location Board met on Dec 17th afternoon New York time and announced 3 gaming licenses (among 16 bidders and 17 projects) for IR projects in upstate New York and Genting Malaysia (GENM) was not granted a license. GENM has submitted 2 proposals (USD1.5bn Sterling Forest Resort and USD1.0bn Resorts World Hudson Valley) both for the location of Orange County and has also proposed the largest capital expenditure and license fee among competitors. However, due to environmental concerns and possible cannibalization of existing gaming operations within NY State, no licenses were issued for any projects aimed at Orange County.

ASEAN Strategy - The Chinese are coming back


After many months of avoiding Malaysia, Singapore and Thailand following the disappearance of MH370, kidnappings of Chinese citizens in Malaysia, and the coup in Thailand, Chinese tourists are finally returning to the region. Thailand’s tourist arrivals from China have rebounded to a record high in November, more than double June’s trough level, despite the expiry of a visa fee waiver on 8 Nov. We also think the strengthening CNY against ASEAN currencies could spur even more arrivals. We believe companies that benefit most from this recovery are AOT, AAV, AAX, ERW, MINT, CENTEL and BEAUTY.

M1 - Superior growth and yield than peers

■ September tariff hike and lower handset subsidies will drive growth over the next two years

■ Fixed line may be a headache for others but M1 is able to grow revenues faster than costs

Raised DCF-based TP to S$4.05 (WACC 6.8%, terminal growth 1%); BUY for 12% upside potential and 5% yield

Wilmar International - Better soybean crushing in FY15

■ Soybean-crushing margins still biggest swing factor. December’s weakness to be made up by Oct/Nov’s strength, supporting decent 4Q margins.

■ Less speculative trading to benefit real soybean crushers like Wilmar, long term.

Still our top pick. Maintain BUY & SGD4.08 TP, at 15x PER. Catalysts from improving soybean-crushing margins & sugarprice rebound.

Silverlake Axis - Expanding Down Under

■ Acquires stake in Finzsoft, NZ tech company, at only 6.4x annualised EPS.

■ Geographical expansion, earnings upside potential.

Maintain BUY. DCF-based TP is SGD1.40 (WACC 9.3%, TG 3%).

Offshore & Marine - Dusk, before dawn


■ Oil-price slump worse than feared. Entire value chain now vulnerable. Focus on balance sheets and cash flows.

■ Order-cancellation risks. Cut FY15E-16E EPS for asset owners/operators by 8-19% for lower pricing.

■ Maintain UNDERWEIGHT with above as de-rating catalysts. For sector exposure, opt for Ezion.

Top pick for the day - Gold

Shared By Stock Fanatic on Thursday, December 18, 2014 | 18.12.14

A long term low in place?


The recent rally in Gold could potentially signal that a long term low may be in place. However, we still need further price evidence to support our view.

Telco : Overall - Showered with love

Our month-long Asia marketing trip revealed that investors are neutral to overweight on ASEAN telcos, largely due to their defensive qualities amid rising risk-aversion. This contrasts with our overall Neutral sector stance, which is based on the potential emergence of competitive/regulatory risks and fair-to-rich valuations after a 4-year bull run. We prefer Indonesia the most and Malaysia the least. Top picks: Telkom Indonesia, SingTel and Thaicom.

Japan Foods Holdings - Squeezed by rising labour cost

1H15 Financial Review
1HFY15 net profit dropped by 52% to S$1.8m (1HFY14: S$3.8m), mainly due to the rising labour cost as well as some one-off expenses as a part of the group’s effort to retain its existing labour force.

Revenue stayed largely flat at S$31.2m in 1HFY15 (1HFY14: S$31.0m), as the group continued to optimize its restaurant brand mix under its portfolio. Japan Food’s total number of restaurants in operation has increased to 44 as at 30 Sep 2014, compared to 39 as at 30 Sep 2013.

Its gross profit margin improved further to 82.4% in 1HFY15, compared to 80.8% as of 1HFY14, helped by the economy of scale from the newly set up central kitchen as well as the depreciated JPY.

Though from a lower base, the group’s share of profits of associated company saw a significant 100% increase in 1HFY15, due to an increase in the number of restaurants operated by its associated companies in Hong Kong and China.

The company has declared an interim dividend of 0.73 Scts per share, representing 70% of the net profit reported for 1HFY15.
**** Recommendation ****
 
Modified by : Stockfanatic
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