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MAYBANK KIM ENG |
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Solid rental growth drives higher dividends
■ Maintain Add with a higher TP of US$9.4, based on a 30% discount to NAV.
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Initiate with HOLD; doing one thing & doing it well…
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| PHILLIP CAPITAL | OCBC |
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China Sunsine Chemical Holdings Ltd Focus on volume growth SINGAPORE | MATERIALS | 4Q18 RESULTS
4Q18 revenue and net profit met our expectation. Expect 50% and 28% jump in IS and TBBS sales volume in FY19 but ASP to slip. The 5.5 SG cents annual dividend represents a 4.3% yield. Due to a softer ASP outlook which translates into a lower bottom line, we revise down our TP to S$1.55 (previously S$1.68) and maintain our BUY recommendation. Valuations are still attractive at 6x PE (with 1/3 of the market cap in cash).
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Yangzijiang Shipbuilding: This ship has brought you to places
Yangzijiang Shipbuilding (YZJ) reported a 22% YoY fall in revenue but saw an 84% rise in net profit to RMB1.2b in 4Q18, bringing full year net profit to RMB3.6b which is a 23% increase compared to FY17. Results beat ours and the street’s expectations, aided by RMB494m of other income in 4Q18, RMB344m of forex gains, and other one-offs. The shipping market, however, is weak and YZJ is pivoting from bulkers and containers (which used to be its bread and butter) to tankers and LNG carriers. It is still hoping to secure US$2b new orders in FY19. As for the stock, it has performed extremely well, for it is up about 70% from mid Jul. At current levels, YZJ is trading at about 9x forward P/E and 0.9x P/B, and we think most of its positives have been priced in. We fine-tune our estimates and our FV rises from S$1.41 to S$1.44.
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