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PHILLIP SECURITIES |
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Singapore Airlines (SIA SP) 4QFY19: Better-than-expected Earnings, Not A Stock Price Catalyst
While 4QFY19’s earnings were better than expected, we believe that SIA might not fare well in the coming quarters as there are already signs of a slowdown in demand for air travel. This is likely to be compounded by deteriorating air cargo volume and yields. Uncertainty regarding the eventual clearance to operate the B737Max remains the biggest risk as SIA is dependent on not just local aviation authorities but also other regions’. We maintain HOLD. Target: S$9.60. Entry level: S$8.80.
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SATS Ltd Eyes set on growth abroad SINGAPORE | TRANSPORT SERVICES | FY19 RESULTS
FY19 net income was in line with our expectations. Food Solutions and Gateway Services revenue grew 4.4% and 7.9% YoY, with growth showing in both Aviation (+11.7%) and Non-Aviation (+8.8%) industries. Deepening presence in China through accretive acquisitions Food and cargo volumes at Brahims and PT CAS remain flat. Maintain ACCUMULATE; unchanged target price of $5.47.
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| PHILLIP SECURITIES | PHILLIP SECURITIES |
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Penguin International Ltd Waddling is normal SINGAPORE | OIL & GAS | 1Q19 RESULTS
Revenue is historically volatile and lumpy. No changes to our earnings forecast. Jump in inventories, non-financial liabilities and asset held for sale point to a healthy outlook. Balance sheet still in net cash position of S$43.8mn, or 45% of the market capitalisation. Our BUY recommendation and target price of S$0.61 remain unchanged.
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China Everbright Water Limited On-track expansion SINGAPORE | UTILITIES | 1Q19 RESULTS
Both 1Q19 revenue and PATMI met our expectations. Two projects secured, 14 projects under construction and one project commenced operation during 1Q19. Seven WWT projects hiked tariff in 1Q19 10% price difference between HK and SG market post-dual-listing We raise our target price to S$0.50 (previously SG$0.48) based on FY19e EPS of 5.5 SG cents and the slightly higher peers’ PER of 9.0x (previously 8.9x), and we maintain our BUY recommendation.
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