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China Aviation (Singapore) Oil

Maintain outperformance 

 Revenue met 95.9% of our full year expectation of US$8,792mn

 Share of profit from associates and JVs met 90% of our full year expectations of US$58.6mn

 Net profit met 81.8% of our full year expectations of US$86.8mn

 We revise up our FY16 forecast, with a higher FY16e EPS of US 10.4 cents from US 10.1 cents.

We maintain our “Buy” rating with an unchanged TP of S$1.92 based on updated average forward PER of 13.9x, implying a 40% return from the last close price of S$1.4.


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Property Devt & Invt Amazon and the expansion of New Economy firms

■ Amazon is planning to expand to Southeast Asia through a Singapore launch slated for 1Q17.

■ The expansion of Amazon reinforces some of the underlying trends we observed: ecommerce threat, new office and warehouse demand from internet companies.

■ Maintain Overweight. Our top picks are KDCREIT, MCT and MINT.

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BreadTalk Group: Improved results driven by Bakery

 Keeping a cautious approach to expansion

 Smaller loss for Food Atrium

 Restaurants performance largely stable

Cost management initiatives bearing fruit

BreadTalk Group’s 3Q16 results came in within our expectations. Revenue was down 2.7% YoY to S$157.3m while PATMI rose 107.7% to S$3.3m. 9M16 revenue was down 1.6% to S$461.7m, forming 73% of our full year expectations, while PATMI was up 8.5% to S$7.0m, constituting 68% of FY16F estimates. The group’s cost management initiatives, particularly for the Bakery segment, have been bearing fruit. Looking ahead, we expect a better FY17 as the group keeps a cautious approach to expansion while being focused on improving earnings quality for each of the three segments. As the stock’s share price has declined to levels around our fair value, we are upgrading the stock from sell to HOLD. Rolling forward to a blended 23x FY16/17 P/E, our fair value estimate is also raised to S$1.07 (previously: S$0.99).



Genting Singapore

Turn around in sight Cheap valuation at below -2 SD EV/EBITDA.

We maintain our BUY call on Genting Singapore (GENS) with a TP of S$0.91. With signs of stabilisation as demonstrated by the first y-o-y increase in GENS’ adjusted EBITDA in eight quarters, we believe we are closing in on a recovery in earnings in FY17. In addition, GENS offers compelling value at current levels as it trades at 8.2x FY17F EV/EBITDA, which is below –2 SD of its mean of 9.0x and its Macau peers which trade at c.12.9x. Furthermore, it offers an attractive 3.9% dividend yield after declaring its first interim dividend.


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Genting Singapore (GENS SP)

Stellar 3Q16 results, but gaming volumes very weak

U/G to HOLD with negatives largely priced-in

We U/G GENS to HOLD as the stock appears fairly valued given the limited downside to our TP. We have revised our assumptions (Fig. 7) and raise our EPS and EBITDA estimates on positive 3Q16 and 9M16 results, but point out that gaming volumes remain at record low levels. We raise our TP slightly (+1%) to SGD0.72 based on unchanged 8x FY17E EV/EBITDA (1SD below the historical 12M forward EV/EBITDA mean). Despite the revisions, we continue to have concerns regarding the continued weakness of VIP volumes and mass market gross gaming revenue (GGR).


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LionelLim8.16Check out our compilation of Target Prices

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