SPH REIT Share Investment update

1. 4QFY17 DPU +0.7% YoY
2. FY17 portfolio rental reversion of 1.2%
3. Full committed occupancy

4QFY17 Results Within Expectations

SPH REIT reported an in-line set of 4QFY17 results, with gross revenue and NPI growing by 1.3% and 3.9% YoY to S$52.9m and S$41.8m, respectively. This was driven by higher rental income from both Paragon and The Clementi Mall (TCM), coupled with higher NPI margins (+2 ppt YoY to 79.0%) due to proactive management of utility contracts, lower property tax and maintenance expenses.

DPU for the quarter came in at 1.42 S cents, representing YoY growth of 0.7% as management released S$4.5m of taxable income available for distribution retained in 9MFY17, versus S$1.6m released in 4QFY16.

For its full-year performance, SPH REIT reported a 1.5% increase in gross revenue to S$212.8m and a 4.5% jump in NPI to S$168.1m. The latter formed 101.5% of our FY17 forecast. DPU of 5.53 S cents translated into growth of 0.5% and constituted 99.0% of our FY17 projection.

Negative Rental Reversion for Paragon a Surprise

Both Paragon and TCM maintained their 100% committed occupancy, as at end-FY17. However, a downside surprise came from Paragon’s negative rental reversion figure of 0.8% for expiries in FY17. As rental reversions for the mall were positive in 9MFY17 at 3.6%, this implies a weak 4QFY17 showing.

The softness came largely from the retail space, as reversions for the office/medical leases were flat. TCM fared better, with positive rental uplifts of 3.7% for the full-year, thus resulting in an overall portfolio rental reversion of 1.2% in FY17. Shopper traffic for both malls was stable.

While Paragon achieved higher tenant sales of 2.1% in FY17, TCM saw a 5.8% decline. Nevertheless, the occupancy cost for Paragon (19.6%; unchanged) and TCM (15.8%; +0.8 ppt) remains healthy, in our view.

There were also positives from SPH REIT’s portfolio valuation, underpinned by a compression in cap rates adopted by the valuers, as rental assumptions held steady. Paragon’s valuation rose 1.5% to S$2,695m, while that of TCM inched up 1.6% to S$583m.

Maintain BUY

Taking into account this full-set of results, we trim our FY18 and FY19 DPU forecasts by 1.1% and 1.8%, respectively. But as we also roll forward our valuations, our DDM-derived fair value estimate remains unchanged at S$1.08. Maintain BUY.

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Share Market Analysis of First REIT

• Modern medical facilities
• Catering to BPJS scheme patients
• Potential acquisitions in FY17

Site Visit to Properties in Jakarta

 

 

We visited four of First REIT’s (FREIT) hospitals in Jakarta recently – Siloam Hospitals Lippo Village (SHLV), Siloam Hospitals Kebon Jeruk (SHKJ), Mochtar Riady Comprehensive Cancer Centre (MRCCC), and Siloam Hospitals TB Simatupang (SHTB). The hospitals are operated by PT Siloam International Hospitals TBK (Siloam) and are well-equipped with modern medical facilities.

Each hospital also has its own Centre of Excellence, which is its areas of specialisation, such as heart surgery and neurosurgery at SHLV. We also understand that both SHLV and SHKJ have obtained the coveted JCI-accreditation, which bears testament to their level of medical excellence.

Integrated With the Health Insurance Programme by the BPJS

According to The Jakarta Post, the Jakarta administration has plans for all hospitals in the capital to become partners of the Healthcare and Social Security Agency (BPJS Kesehatan), and this could be a requirement for the extension of hospital permits and accreditation. As of 12 Sep 2017, only 64 out of the 160 private hospitals registered in Jakarta currently co-operate with the BPJS.

During our visit, we noted that the 4 FREIT assets had arrangements / facilities in place to cater to patients under the BPJS scheme, with the Class III wards catered for them in very good condition. While we believe that the margins from patients seeking treatment under the BPJS scheme might not be as high as those under private insurance or self-payment, we still think that the programme will nonetheless help operators like Siloam increase utilisation of their wards and facilities.

Maintain HOLD

The latest reported inflation for Singapore in August 2017 was up 0.4% YoY, moderating from July’s 0.6%; Jan-Aug 2017 registered 0.6% YoY growth. Consequently, the median Bloomberg consensus for 2017’s CPI has been revised downwards from 0.9% to 0.8%.

We believe that the slight dip should not significantly affect base rental revisions, and that potential accretive acquisitions this year should help to provide DPU support.

Based on our projections, FREIT is currently trading at a FY17 distribution yield of 6.4% and a P/B ratio of 1.3x. We maintain our HOLD rating and our fair value estimate of S$1.38.

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Singapore Stock market Analysis fo Delfi Ltd

• Indonesia cuts key rate again
• Stable 2H sales expected vs. 1H
• Investments for the long term

Soft Consumption for Key Market Indonesia

 

Delfi Ltd’s key markets have been Indonesia and Philippines, with Indonesia typically accounting for about 70% of overall revenue. As of 1H17, Delfi saw lower sales in Indonesia YoY amid the weak retail sales environment and its own product rationalization exercise to focus on core brands. Last Friday, Indonesia’s central bank cut its interest rate for the second consecutive month, against the backdrop of soft domestic consumption growth. Overall, management expects operating environment to remain challenging amid uncertain economic conditions in its key markets.

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Bright Spots

Management has been making efforts to improve the quality of earnings. The product rationalization programme is an example, whereby the group had eliminated lower performing SKUs, with the bulk of elimination made in late FY16, so that they could focus on growing sales of their core brands. Particularly, in the last two months of 2Q17, sales for Own Brands products saw a double digit growth in Indonesia.

In addition, the group has been able to maintain a healthy level of gross profit margin at around 30%, with 1H17 at ~33% vs. a threeyear average of ~32%, backed by initiatives such as pricing and right-sizing adjustments, as well as pushing for higher sales of premium products.

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But High Expenditures

With continuous investments being made in various aspects of the business such as brand building, capacity, distribution capabilities and supply chain integration, realizing benefits from these investments would be pertinent to sustaining growth for the long term. However, costs would likely remain high.

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On the expectation of stable sales in 2H vs. 1H, FY17 revenue would still be lower YoY, and with higher expenditure, management has also guided for lower profitability this year.

Notably, the group was in a net cash position of US$23.5m as of 30 Jun-17, and has paid 3.01 S-cents/share of dividends YTD. They have also formed strategic initiatives with Japan’s Yuraku Confectionery and South Korea’s Orion Corporation. With that said, due to an internal reallocation of resources, we are ceasing coverage on the stock..

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Why is small-cap value strategy

"Put just in little capitalization esteem stocks. Try not to put resources into blue chips. Try not to put resources into development stocks."

This exhortation may alert you. In any case, in the event that you need the best long haul returns, you need to put resources into esteem little tops. To manufacture your retirement fund rapidly, you have to resist tradition.

What are little top stocks? They are organizations with little market capitalisation. Market top is the market estimation of all the extraordinary offers. You get this by increasing every single exceptional offer with the offer cost. 

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What is an esteem stock? An esteem stock is one that offers at a marked down cost to its reasonable esteem. For instance, if a stock offers for 50 pennies and its reasonable esteem is $1, at that point that is a half rebate to its reasonable esteem. Esteem speculators attempt to pay 50 pennies to a dollar of benefits. The reasonable estimation of a stock is evaluated by understanding the matter of an organization and breaking down its budgetary explanations.

What's more, why is a stock that is worth $1 offering for 50 pennies? This happens on the grounds that stock costs are as a rule driven by the assessments of market members and are not founded on business basics.

Oblivious ages in 1930s, individuals regarded money markets as a club. Many still do today. Examiners don't think about the basics. At that point Benjamin Graham went along. A great many people don't know graham's identity, however they know his popular understudy: Warren Buffett. Graham presented a precise method for investigating stocks and is known as the father of significant worth contributing. 

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He presented the idea of edge of security. It implies that if one somehow managed to buy a stock at well underneath its evaluated reasonable esteem, there is a cushion called the edge of security that will shield one from misfortune. Graham brought us from the dull periods of stock hypothesis to contributing.

Afterward, in the 1980s, Eugene Fama and Kenneth French, also called Fama and French, tagged along. They had leeway over Graham, as in the 1980s, there was suffi cient budgetary information accessible for investigation utilizing factual apparatuses and PCs. Graham did not have this advantage and needed to depend on concentrate little specimens of stocks utilizing pen and paper. Fama and French based upon Graham's work and took contributing to another level. They put the science into contributing. To put it plainly, Fama and French found that little top esteem stocks outflanked the general securities exchange. For the advantage of perusers, I have abridged a portion of the information from Fama and French in Table 1.

Table 1 demonstrates the execution of two procedures in the worldwide securities exchange. "Little less huge" (SMB) implies the normal execution of little top stocks short that of huge top stocks every year. For instance, from 2012 to 2016, little tops beat huge tops by a normal of 0.26% a year. Similar remains constant for the last 10, 15 and 20 years. 

"Esteem less development" implies the normal execution of significant worth stocks less that of development stocks. In the worldwide securities exchange, esteem stocks have outflanked development stocks by 4.73% a year for the last fi ve years. In the course of the most recent 20 years, from 1997 to 2016, esteem stocks have outflanked development stocks by 3.36% a year.

Shouldn't something be said about the Asia ex-Japan securities exchange? See Table 2. 

Asia demonstrates a comparable outcome. There is a general out performance of little tops and esteem stocks. A basic peruser may bring up that in the last fi ve years, little tops have failed to meet expectations huge tops by 1.64% a year. I think the more drawn out term results should convey heavier weight — little tops outflanked more than 10-to 20-year time frames.

In Asia, the esteem methodology is plainly better than the development system. Esteem beat development in all cases and by an immense quantum as well (4 or more for each penny). One would likewise see that esteem stocks' out performance in Asia is better than that in the worldwide securities exchange.

Relevant Keyword: Penny Stocks Recommendation, Stock investment or share investment , Stock picks &Stock market news today

Source  - theedgesingapore

SINGAPORE SGX MARKET DAILY BRIEFING

SINGAPORE SGX MARKET STOCKS AND SHARES OPENED 0.7 PER CENT HIGHER

Singapore SGX market opened 0.7 per cent higher on Thursday, with the Straits Times Index advancing 21.56 points to 3,237.26 as at 9.06 am.

About 82.3 million shares worth S$123.3 million in total changed hands, which worked out to an average unit price of S$1.50 per share.

The most actively traded counter was Genting Sing, which rose S$0.015 to S$1.090 with 11.7 million shares changing hands. Other actives included Thai Bev and DISA.

Gainers outnumbered losers 111 to 33.

FUNG CHOI DECIDED TO DELIST FROM SGX

FUNG Choi Media is preparing for the delisting of its shares from the mainboard of the Singapore Exchange.

In an SGX filing on Wednesday, the Bermuda-incorporated company said that the reasons for its delisting include the lack of prospect for any corporate rescue or restructuring or sale of the company’s business, and the company is hopelessly insolvent.

Fung Choi said that on June 21, the SGX has advised that it has no objection to the application for delisting, and an immediate announcement must be made of the delisting application granted.

The liquidators are working with the SGX to confirm the delisting date and other matters in relation to the company’s delisting. A further announcement will be made once the delisting date is confirmed.

HOT STOCKS FOR SINGAPORE SGX MARKET INVESTMENT

• DISA
• OCBC Bank
• YZJ Shipbldg SGD
• Yuuzoo
• Ezion

Earn more on this stocks and to get live Singapore SGX market updates subscribe to our 3 days free trial.

Reference: http://www.mmfsolutions.sg/news/singapore-sgx-market-daily-briefing/

Best Penny Stock To Buy

THE accompanying Penny Stock had declarations or improvements that may impact exchanging on Thursday.

Joined Overseas Bank: United Industrial Corp (UIC), UOL Group and Haw Par Corp, the three property organizations that are considerably claimed by veteran broker Wee Cho Yaw, required an exchanging end on Wednesday, reemerging theory of the potential privatization of UIC. With the exchanging end of these stocks and talk that Mr. Wee, administrator of UOB, is going to merge his organizations, UOB stock is an absolute necessity watch.

Singapore Airlines (SIA): The carrier has re-secured the No 2 position in the Skytrax World Airline Awards rankings, as indicated by a declaration on the World Airline Awards site. Notwithstanding taking the pined for second best positioning, SIA was additionally granted Best Airline in Asia, Best Business Class Airline Seat, and Best Premium Economy Onboard Catering.

Cambridge Industrial Trust (CIT): Cambridge Industrial Trust Management Limited and Cambridge Industrial Trust will change their names to ESR Funds Management (S) Limited and ESR-REIT, individually, from Friday. This is to connote the significance of the Reit as a feature of the e-Shang Redwood Group’s (ESR) business exercises. e-Shang Infinity Cayman Limited, a backup of ESR, purchased the total 80 for each penny aberrant enthusiasm for CIT Management from nabInvest Capital Partners Pte Ltd and CREIM Limited in January.

Hot Stocks of the day:

    1. Hatten Land (SGX: PH0)

0.220

+0.028 (+14.58%)

2. LifeBrandz W190602 (SGX: 1E1W)

0.010

+0.001 (+11.11%)

3. Sunrise Shares (SGX: 581)

0.100

+0.049 (+96.08%)

Our Recent Stock Recommendations 

SGX INTRADAY SIGNAL (20 June 2017): BUY LIFEBRANDZ AT 0.056 TARGET 0.059…. SL 0.052

SGX INTRADAY UPDATE: LIFEBRANDZ AT 0.059, OUR TARGET DONE

Reference: http://www.mmfsolutions.sg/news/best-penny-stock-buy/

For more information: Penny Stocks Recommendation, Stock Investment, Stock Signals, Stock Market Today Singapore, Stock Market News Today