| CIMB | PHILLIP SECURITIES |
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Auric Pacific Group Limited The sun continues to shine ■ FY16 core net profit was in line, at 101% of our forecast. It surged 177% yoy to S$19.3m, driven by improved profitability of all business segments. ■ Net cash position strengthened to S$87.5m, forming 42% of market cap. ■ We remain upbeat on the group’s FY17 earnings outlook. Major shareholder’s offer price of S$1.65 translates into 10.9x FY16 core P/E (or 6.3x excluding net cash).
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Raffles Medical Group Ltd Searching for the right remedies FY2016 Revenue of S$473.61 mn was in line with our forecast of S$486.26 mn FY2016 PATMI of S$70.21 mn missed our forecast by 8.1%. Surprise mainly came from higher-than-expected losses from MCH and higher effective tax rate RafflesMedical to drive FY17F topline; Expect further margin compression before MCH breakeven while RMG continues to gear up for expansion Final dividend of 1.5 Cents; FY2016 dividend of 2.0 Cents (same as FY2015)
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| OCBC | |
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PACC Offshore Services Holdings: Gross loss widened QoQ PACC Offshore Services Holdings (POSH) reported a 49% YoY drop in revenue to US$36.7m and a net loss of US$345.4m in 4Q16, bringing full year net loss to US$371.4m. Gross loss was US$9.5m in 4Q16, and what dragged the group’s earnings was a US$199m impairment on fixed assets, as well as a US$111.2m impairment on goodwill. Excluding exceptional items, core net loss was US$35m in 4Q16 and US$61m for the full year. Due to the impairments, the group’s net gearing rose significantly from 0.5x in FY15 and 0.6x in 3Q16 to 1.0x in FY16; we understand that no bank covenants were breached in 2016. Meanwhile, the group still has undrawn bank lines of about US$282.9m in the form of revolving facilities. Prior to this set of results, we had a FV of S$0.30 based on 0.45x FY17F NTA. With the latest impairments, we increase our multiple to 0.7x NTA, such that our FV rises to S$0.33. With the downside of 10%, we downgrade our rating to SELL. |
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| PHILLIP SECURITIES | |
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Geo Energy Resources Ltd More offtakes to take off SINGAPORE | MINING | INITIATION We initiate coverage on Geo Energy Resources Ltd (Geo) with a Buy rating and a target price of 45 SG cents based on 11.0x annualised 3Q16 P/E ratio and 3 US cents FY17e EPS, as well as 1.3x USD/SGD exchange rate (5 year average), which implies an upside of 66.7%.
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Wilmar Reversal Of CPO Price Trend Begins Maintain NEUTRAL with revised SOP-based TP of SGD3.56 (from SGD3.28, 6% downside). We are starting to witness a fall in CPO prices, and believe this marks the start of lower plantation profits. Nevertheless, we believe lower plantation profits would be more than offset by better processing margins, due to lower feedstock costs. Unlike most companies, Wilmar is not expecting as high an increase in FFB production as a result of replanting works. On the other hand, soybean prices have fallen on expectations of a bumper crop in Brazil – although this remains to be seen, we believe it may pose potential upside for Wilmar’s crush margins.
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