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DBS VICKERS |
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TalkMed (TKMED SP) Disrupted By COVID-19; Keep BUY
Maintain BUY with a lower DCF-derived TP of SGD0.53 from SGD0.62, 23% upside and c.4% yield. The current travel restrictions in place, which do not allow international visitors on short-term trips to enter Singapore, resulted in a halt of foreign medical tourism which is the bulk of TalkMed’s portfolio. As a result, we lower FY20F PATMI by 14% and continue to monitor the way COVID-19 impacts TalkMed’s operations. The company has a strong net cash balance sheet, an attractive dividend yield and is capable to withstand this situation.
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Spotlight on Technology Reality bytes
• Tech companies hit on both supply and demand front • Expect semiconductor to fare better as it forms part of the essential goods supply chain – BUY calls on AEM, UMS, Frencken • Valuations more attractive now; strong balance sheet and cashflow, all net cash position • 13/10% cuts in FY20F/FY21F earnings. Expect Venture (BUY) to emerge stronger; downgrade FUYU to HOLD
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DBS VICKERS |
CGS CIMB |
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Singapore Market Focus Easter Bunny gets stay-home notice
• STI rebound capped - Sideways trend ahead from 2,300 to 2,600 • Three COVID-19 themes – (1) Survivors: SGX, AREIT, Wilmar, MINT; (2) Resilient: Starhub, Netlink, Sheng Siong , Dairy Farm, MUST, MCOT; (3) China recovery: CRCT, CapitaLand, Yangzijiang • Four stocks to top slice: CDLHT, Ascott Residence, CMT, SATS
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SingTel Pre-emptive moves to buffer for headwinds
■ We estimate HOOQ’s liquidation may remove net loss of S$85m in FY21F. ■ We view a potential sale of Optus towers positively as it could strengthen Singtel’s balance sheet and possibly help it to keep FY21F DPS at 17.5 Scts. ■ Reiterate Add on 8% lower target price of S$3.40.
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Check out our compilation of Target Prices
