| PHILLIP SECURITIES |
UOB KAYHIAN |
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Geo Energy Resources Ltd Loss expanded in 1Q19
1Q19 revenue and net profit missed our expectations due to lower ASP and higher cash cost. On-track to meet the FY19 production target of 8mn tonnes. First gross loss since 1Q16, mainly to the fall of ASPs while cash costs remained high. GEO islikely to raise debt to pursue inorganic growth going forward. Alternatively, GEO may consider redeeming the Senior Notes at the end of the year if the deployment of cash fails. Downgrade to NEUTRAL with a lower TP of S$0.15 (previously S$0.215), as we lower our forecasted sales volume and ASP, and adjust upwards forecasted cash cost.
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Jumbo Group (JUMBO SP) Strong Operations In Singapore Should Offset Softer Performance In China
The two newly-opened JUMBO Seafood outlets in Singapore were well received and have turned profitable. In addition, existing Jumbo Seafood outlets continued to fare well and the expansion of other brands are on track. Singapore operations should more than offset the weakness in the China market and provide for decent net profit growth of 17.6% for 2019. Maintain HOLD and PE-based target price of S$0.41. Entry price: S$0.32.
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| CGS CIMB | DBS VICKERS |
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Sembcorp Industries Patience will pay off in India
■ SCI’s India operations are seeing better days as SEIL 1 returned to optimal PLF of c.73% in the months of Apr and May vs. 58% in 1Q19. ■ Lower coal cost (-10% since end-Mar) could continue to work in SEIL 2’s favour. Ex-SMM, SCI is trading at 0.4x FY19 P/BV, below -1 s.d. of its mean. ■ Maintain Add. SCI ranks no.2 on the FSSTI to deliver the highest earnings recovery of 20% and trades below -1 s.d. of its 10-year mean.
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Singapore Telecom Sector How would M1’s mobile makeover sway the sector?
• M1 revamps its mobile offerings completely with cheaper handset-bundled plans and more-expensive SIM-Only offerings • Downside risk to our projected decline of 6.5% in 2019, but long-term impact of the move is likely to be positive from more handset-bundled subscribers • Less than 1% impact on Singtel’s earnings even if mobile revenue were to dip 9% as Singapore mobile contributes < 10% to Singtel’s bottom line • Singtel and Netlink are our top picks in the sector
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Check out our compilation of Target Prices
