| PHILLIP SECURITIES | CIMB |
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Ho Bee Land Limited Improving sales volume and interest on the ground to narrow discount to RNAV SINGAPORE | REAL ESTATE | RESULTS First profits from development properties since 2013. We expect development profits to taper off in 2017 as most of Australian residential development is sold. Activity in Singapore high-end property starting to pick up. Negativity towards Ho Bee Land’s high-end property and huge discount to book less warranted. Rose Court sale demonstrates astute foresight of management.
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CITIC Envirotech Ushering in an abundance of clean water ■ FY16 core net profit (S$102m) grew by 84% yoy, ahead of our full-year forecasts. ■ Healthy operating cashflow with low net gearing ratio, signalling potential for ROE improvement. ■ Robust project pipeline to support our double-digit earnings growth for FY17-19F. ■ Poised to gain more WWT projects with SOE-backing from new strategic investor, China Reform Fund, and its successful track record. ■ Raise our DCF-based TP to S$0.93 on higher earnings estimates. Maintain Add.
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| OCBC | |
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QAF Limited: Still positive for longer term Following QAF’s FY16 results, we are cognizant of the potential cost pressure ahead, as outlined by the company. While feed grains prices are expected to be favourable for the year, the company highlighted the risk of higher utilities costs and flour prices in certain markets. Its Primary Production segment may also see lower ASP and pressure on margins amid broader market developments as well as expansion-related costs, while profits may be subject to income tax going forward. After a good run-up in share price and a lack of near term catalysts, we are downgrading the stock from buy to HOLD with unchanged FV estimate of S$1.46 at this juncture. Nonetheless, we remain positive on the company for the longer term, given the formation of an executive committee, meaningful expansion plans and potential strategic initiatives. The group has said it is exploring strategic acquisitions and/or collaboration with other food companies, while also conducting strategic reviews of its primary production business in Australia and its bakery business in China. Thus longer term investors can consider accumulating below S$1.36.
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| KGI Fraser | DBS VICKERS |
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Golden Energy and Resources Another year of record coal production Above expectations; maintain BUY: Golden Energy and Resources (GEAR) reported a 4Q16 PATMI of US$21.8m vs a net loss of US$9.4m in the prior year. Coal production reached another record of 9.5m tonnes in FY16 from 8.7m tonnes in FY15. GEAR had a net cash position of US$29.3m as at end Dec-16 as a result from the post-compliance placement and US$17.4m positive free cash flow generated in FY16. With coal prices stabilising at around US$45/tonne (Eco Coal, 4200 kcal/kg) in Feb-17 vs our long-term assumption of US$42/tonne, we remain optimistic and reiterate our BUY recommendation with a TP of 0.96 (DCF, WACC 12.5%, LTG 0%). GEAR is currently trading at 4.4x FY17F EV/EBITDA vs an average 5.3x EV/EBITDA of its similar-sized peers. |
Yanlord Land Group Strong sales come to fruition Maintain BUY on its strong earnings and dividend outlook. Yanlord reported strong FY16 results from high sales delivery in Shanghai and Nanjing at better gross margin. Around 70% of the Rmb26.5bn unrecognised sales will likely be delivered in FY17, giving it a high revenue visibility. FY16 margin rebounded to 31% from 28% in FY15. This margin recovery should continue in FY17 with the strong ASP growth in recent and 2016 sales. Given the decent property sales and earnings, management raised dividend payout ratio to 15% from 10% in FY15 which boosted dividend yield back to 3% level after share price shot up by 50% since January 2016.
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