Summary: Singapore Exchange posted 3Q earnings of S$101.5m, +14% YoY (-35% QoQ), in line with market estimate of S$103m. The QoQ decline was due to the slowdown in the securities market, but mitigated by derivatives market revenue which grew 36% YoY to S$39m. Moving ahead, there are several pockets of growth for SGX despite present uncertain market conditions.
The increase in the net clearing fee for the MSCI Singapore futures and CNX Nifty futures with effect from 1 April 2008 should help to support revenue contribution from the Derivatives segment.
The Structured Warrant segment registered 9-month traded value of S$24.5b, surpassing the S$18.8b in FY07. The ETF segment jumped 127% YoY to S$1500m in 9MFY08. Management has declared a 3Q dividend of 3 cents, payable on 13 May 2008.
We have raised our FY08 earnings estimate to S$460.5m. Using the same parameter of 21x earnings, we are raising our fair value estimate from S$8.20 to S$8.80. At this level, yield is still attractive at 4.1%. We are therefore retaining our BUY rating on the stock. (Carmen Lee)
For more information on the above, visit www.ocbcresearch.com for detailed report.
Singapore Press Holdings: Still a Stalwart
Summary: SPH reported its 2Q08 results yesterday with topline rising 19% YoY to S$301.8m but net profit declined 6.3% YoY to S$99.6m. This was primarily due to lower than expected recognition from the Sky@Eleven project and weaker investment income.
About S$150m has been committed for investment into new media businesses which we anticipate is currently loss making. Along with yearly annual increments, this expansion has caused staff costs to rise 12% YoY to S$159m at half time.
We expect SPH to ride its monopolistic market position in the growing Singapore economy to insulate itself against the slowing western economies. Paragon will continue to contribute strongly to the group due to strong rental income and increased NLA by Oct 08 with its S$82m makeover.
Assuming a similar payout ratio as previous years, we estimate that the stock’s dividend yield could be 5.7% in FY08, making SPH an attractive defensive play for a shaky market. Using SOTP, we raise our fair value slightly to S$5.15 (vs. S$5.14) as SPH pays down its debt for Paragon. Maintain BUY. (Kelly Chia)
For more information on the above, visit www.ocbcresearch.com for detailed report.
Pacific Andes Holdings: Widening its Peru footprint
Summary: Pacific Andes Holdings (PAH) announced that its subsidiary, China Fishery Group Limited (CFG) has entered into an agreement to buy the entire share capital of Epesca Pisco S.A.C for US$19.9m. This marks its eight fishmeal plant in Peru.
This acquisition comes with one fishmeal plant and three fishmeal depots, increasing its processing capacity by 110 tons per hour to 655 tons per hour. In addition, this plant is located in the south of Lima, complementing its existing operations in the north and central parts of Peru. We view this acquisition as complementary to its operations and retain our BUY rating for PAH with fair value estimate of 82.5 cents. As its FY08 result is coming out soon, we will review our numbers then. (Carmen Lee)
Li Heng Chemical Fibre: Weaving a good FY07 showing
Summary: Li Heng Chemical Fibre Technologies (Li Heng) posted a good set of FY07 results, with revenue up 62.6% at RMB2758.1m, buoyed by strong demand for its high-end nylon yarn products, which it was able to meet by the first full-year operation of its Liheng plant at Binhai Industrial Zone. New products, namely nylon FDY and DTY, contributed positively to its product mix and output.
And thanks to higher ASPs of these products, Li Heng was able to hold its gross margin stable at 34.3% (versus 35.0% in FY06), despite higher raw material prices. Net profit jumped 89.4% to RMB905.1m, in part aided by a tax exemption, which helped to offset higher depreciation (+68.0% at RMB46.9m) and interest cost (+108.4% at RMB21.5m). We will have more after we speak to management later. We currently do not have a rating on the stock. (Carey Wong)
For more information on the above, visit www.ocbcresearch.com for detailed report.
NEWS HEADLINES
- US benchmark crude hit US$111.76 per barrel – an all-time high, even after adjusting prices during past booms for inflation.
- Wachovia Corp, the fourth-largest US bank, reported an unexpected 1Q loss, cut its dividend and said it will raise about US$7b in a share sale to replenish capital.
- China’s central bank chief said there’s still room to raise interest rates after six increases last year, as China tries to counter the highest inflation since 1996.
- Indonesia said it is unlikely to import rice from other Asian nations in 2008 because of big local harvests, reducing pressure on global supplies.
- The Singapore government is calling for S$5.8b worth of tenders in the construction sector this fiscal year. All in, its tenders for FY08 will touch a record S$8b.
- Yongnam Holdings has entered into a JV with Japan’s JFE Engineering Corp to undertake a S$50.3m contract for the Marina Bay Sands IR. This marks Yongnam’s second set of contracts for the IR.
- C&O Pharma is setting up a JV with a US contract research organization, XenoBiotic Labs as demand for research outsourced to Asia booms.
No comments:
Post a Comment