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StarHub (STH SP)

2Q18: New CEO Injects New Vigour


Revenue from the mobile segment contracted 6.6% yoy on ARPU erosion while pay TV revenue declined 4.8% yoy on the loss of 11,000 subscribers. Fixed enterprise revenue grew 22.4% yoy, driven by growth of the managed services segment through the acquisition of Accel Systems & Technologies and D’Crypt. New CEO Peter Kaliaropoulos will work on protecting StarHub’s high-value mobile customer base, adopting a variable cost model for content and pursuing growth for fixed enterprise. Maintain HOLD. Target price: S$1.92. Entry price: S$1.65.


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SG Market: Stable is the new sexy


In the current risk off environment, some investors have been gravitating towards higher dividend yielding blue chips. At current valuation, the STI is trading at 13.4x FY18 and 12.4x FY19 earnings, with price-book of 1.1x and dividend yield of 3.9%. For the current 2Q18 results season, several companies have declared higher dividends including Singapore Exchange, Keppel Corporation, Venture Corporation, DBS, UOB and OCBC. From our coverage universe, we have identified stocks with sustainable and regular dividends payout in the past five years and with current dividend yield of >3%. From this list, we have identified 10 BUY stocks and these are CapitaLand, DBS, Frasers Centrepoint Trust, Mapletree North Asia Commercial Trust, Singapore Telecommunications, NetLink NBN Trust, Singapore Exchange, Singapore Technologies Engineering, SATS, United Overseas Bank and Yangzijiang Shipbuilding Holdings Ltd.


Raffles Medical Group Ltd

Expenses coping well to softer conditions



 2Q18 PATMI was within expectations, but revenue trending below our estimates

 Cost is coping well with the softer revenue growth as margins expanded

 Clinic revenues rising but offset by softer hospital revenues

 Maintain ACCUMULATE with unchanged TP of S$1.32. Our earnings forecast is unchanged.


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Yangzijiang Shipbuilding

Exceedingly impressive


■ We were surprised by the record delivery of 20 vessels in 2Q18. Group revenue of Rmb7.9bn was 60% higher than our expectations.

■ 2Q18 net profit of Rmb994m exceeded our Rmb720m forecast. 1H18 net profit of Rmb1.6bn formed 62% of our FY18F and 68% of consensus.

■ Shipbuilding margin of 21% was broadly in line with our expectation of 20%. There were 10 large vessels that were part of the delivery.

■ Earnings were also boosted by some one-offs - Rmb101m forex gain, impairment losses of trade/other trade receivables (Rmb229m) and HTM (Rmb133m).

■ Maintain Add. YZJ proved that it is set apart from Singapore peers and did not need HTM income to outperform. Our SOP TP is up slightly to S$1.29 (from S$1.27).


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Riverstone Holdings

Solid 2Q18; supported by lower raw material costs


■ 2Q/1H18 net profit of Rm33.6m/Rm64.6m in line with expectations with 1H18 forming 45%/46% of our/consensus full-year forecasts. Historically, 1H is weaker.

■ Gross margin stable at 22.5% in 2Q18 on a qoq basis, vs. 22.3% in 1Q18.

■ Maintain Add with TP of S$1.28. Riverstone’s valuation remains undemanding at 14.1x FY19F P/E, c.40% discount to the Malaysian glove makers.


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Nam Lee Pressed Metal Industries

Attractive yield with downside capped by cash hoard



 9M18 revenue and PATMI met 69% and 73% respectively, of our full year estimate

 Maintain Buy; new target price of $0.51 (previously $0.56) due to trade war concerns and slower recovery in construction sector


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LionelLim8.16Check out our compilation of Target Prices

Share Prices

Counter NameLastChange
AEM Holdings1.2500.020
Avi-Tech Electronics0.340-0.005
Best World Int.1.360-
China Sunsine1.150-
CNMC GoldMine0.275-0.005
CSE Global0.4800.015
Eagle HTrust USD0.660-
Food Empire0.520-0.005
Golden Energy0.1680.003
GSS Energy0.0720.002
ISDN Holdings0.2150.005
JB Foods0.645-
KSH Holdings0.4600.005
Moya Asia0.064-
Nordic Group0.265-
Oxley Holdings0.3200.005
REX International0.0910.012
Sing Holdings0.385-
Straco Corp.0.735-
Sunningdale Tech1.200-
Sunpower Group0.4850.005
The Trendlines0.089-
Tiong Seng0.210-
Uni-Asia Group0.7200.010
Yangzijiang Shipbldg0.970-

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