| UOB KAYHIAN | PHILLIP SECURITIES |
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Singapore Medical Group (SMG SP) Short-term Pain, Long-term Gain
SMG has made a big step into expanding its presence in the highly lucrative aesthetics business through the acquisition of SW1 in Singapore. SMG has also proposed a 1-for-20 rights issue. The stock is trading at 17.7x 2018F PE and at a 6.3% premium to the rights price. Maintain BUY with a lower target price of S$0.74 based on an enlarged share base and pegged to peer's average PE.
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Geo Energy Resources Ltd Gloomy 4Q but will be a bright FY18
FY17 revenue was in line with our expectations but net profit missed our expectations by 16.6% due to the accrual interest expenses of the Senior Notes. FY17 production was in line with the adjusted target; average selling price (ASP) enjoyed a healthy YoY rise of 22%. Not subject to the new domestic production and price regulation in Indonesia. We maintain forecasted 10.8mn tonnes of sales volume and US$39/tonne of ASP in FY18. Meanwhile, we revise the cash cost upward to US$27.6/tonne (previous US$26/tonne). Accordingly, FY18e EPS are updated to 3.5 US cents (previous 4.4 US cents). Based on unchanged forward PER of 10.0x (the average of regional peers) and 1.36x of exchange rate (USD/SGD), we roll over the target price to FY18e earnings and maintain our BUY call with a higher price of S$0.47.
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| RHB SECURITIES | DBS VICKERS |
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BreadTalk Group Locking In Profit At This Level
BreadTalk's share price has surged 14.1% YTD, outperforming the STI index by 10.9%. We believe the market has factored in the higher dividends as well as potential earnings growth from its existing businesses. However, with more JVs in the pipeline, we think that the rising capex and start-up costs could be a near-term overhang. As such, we recommend investors to TAKE PROFIT (from Buy), with an unchanged TP of SGD2.00 (3% upside), and accumulate at lower levels.
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Singapore REITs The bottom is near
• Fund flows expected to return to S-REITs • Twin growth thrusts supported by improving fundamentals and potential acquisitions • Interest cost largely hedged into fixed rates; sensitivity to interest rate hikes is mitigated
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Check out our compilation of Target Prices
