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CGS CIMB |
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First Resources (FR SP) Expect a much better 2H19
2Q19 EPS affected by low prices and output 2Q19 core PATMI fell short on low prices and output. We cut our FY19-21E EPS forecasts by 6-8%. But we look forward to a better 2H19 on seasonally higher output and stronger prices. Following our EPS revisions, our new TP is SGD1.80 (previously SGD1.93) on unchanged 17x FY20 PER, its 5-year mean. BUY; we continue to like FR for its medium-term growth prospect and cost efficiency, being one of the lowest cost producers in the region. FR declared an interim DPS of 0.625 cents (payable: 12 Sept).
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ST Engineering MRAS a good safe
■ 2Q19 profit of S$138m was a miss vs. our S$143m forecast mainly due to slower-than-expected profit growth in electronics. ■ MRAS consolidation managed to offset the negative effects of Jet Airways’ grounding, resulting in 2% qoq growth in aerospace profit to S$64m. ■ S$0.05 interim DPS was declared. STE is a solid name to own for diversification. Acquisition growth is key catalyst. Key risk is global slowdown.
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UOB KAYHIAN |
UOB KAYHIAN |
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Tianjin Zhong Xin Pharm Co-S (TIAN SP) 2Q19: Good Results Driven By Robust Growth Of Major Products
TIAN’s 2Q19 net profit (+10.3% yoy) was slightly above expectation; 1H19 met 53.8% of our full-year forecast. Strong sales from its major products and extensive marketing efforts have lifted the company’s performance in 2Q19. Sales of the two top contributing products, Su Xiao Jiu Xin Wan and Qing Fei Xiao Yan Wan, grew 24.6% and 18.9% yoy respectively. Our target price of US$1.40 is based on the peer average of 11.8x 2019F EPS. Maintain BUY.
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Sembcorp Industries Ltd (SCI SP) 2Q19: In-line Results; Benign Outlook
SCI’s 2Q19 revenue of S$2.37b (down 29% yoy) and net profit of S$98m (up 20% yoy) were in line with our expectations. The strong showing was driven by its energy business, good cost control and a favourable tax rate of 12.8% for 2Q19 (2Q18: 27.1%). SCI’s outlook remains benign, given a major maintenance shutdown at its Singapore power asset as well as poor new-order flow for its offshore marine business. Maintain HOLD. Target price: S$2.34. Entry price: S$2.10.
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