Good Time to BUY M1 Ltd

• Met 73% of our 9M17 estimate
• NB-IoT network takes time to ramp up
• Maintain HOLD

9M17 Revenue Growth Driven Mainly by Fixed Services

 

M1 Ltd’s (M1) 3Q17 revenue grew 1.0% YoY to S$251.6m driven mainly by fixed services (+19.9%) and mobile post-paid (+3.4%) revenues but partly offset by weaker handset sales (-13.6%) and international call services (- 7.0%). Fixed services revenue growth was driven by a 20.0% YoY increase in customer base despite recording 6.1% decline in ARPU, while mobile revenue growth was mainly driven by higher post-paid customer base and flat YoY ARPU.

3Q17 operating expenses rose at a slower pace of 0.6% YoY to S$209.1m due to a 21.8% decline in advertising and promotion expenses, offset by higher depreciation. Consequently, EBITDA increased 1.3% YoY to S$75.5m. However, NPAT fell 4.8% YoY to S$32.7m as taxation increased 13.1% to S$7.2m. For 9M17, revenue rose 2.3% YoY to S$763.9m driven mainly by fixed services and handset sales.

However, operating expenses grew 4.8% to S$633.3m due to higher handset costs and higher wholesale costs of fixed services. Consequently, 9M17 NPAT declined 13.9% YoY to S$68.6m and EBITDA fell 5.0% to S$228.0m, which formed 72% and 73% of our FY17 forecasts, respectively.

No Change in FY17 Outlook Guidance

For FY17, M1 keeps its guidance unchanged:

1. capex to be around S$150m,
2. expects NPAT to decline YoY for FY17, and 3) intends to maintain 80% dividend payout ratio for FY17.

Looking ahead, we believe competition within the mobile segment will continue to put pressure on ARPU with the impending entry of TPG as well as the announced intention of MyRepublic to launch mobile services as a Mobile Virtual Network Operator (MVNO). While M1 has recently launched nationwide NB-IoT network, it expects mass adoption to take time as a new technology and with the eco-system still evolving.

Separately, we do not expect M1’s ICT business to contribute materially in the near-term as it needs time to ramp up as well.

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Supported by 6.8% Forward Dividend Yield

With a set of in-line 9M17 results, we keep our forecasts unchanged and note the lack of any near-term catalysts driving earnings. Hence, we maintain our HOLD rating and the same FV of S$1.65.

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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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Stock Market analysis of City Developments Limited

• Price translates to S$1,515 psf ppr
• FV increases to S$12.90
• Maintain BUY

Acquires Amber Park for S$906.7m Via Collective Sale

 

An 80:20 JV between City Developments (CDL) and Hong Leong group has successfully tendered S$906.7m for the collective sale of Amber Park. The 200-unit development at Amber Garden is one of the largest sites in the locality with a land area of 213,675 square feet. With a plot ratio of 2.8, the allowable GFA of the project is 598,290 sq ft. Development charges are not payable for the proposed development. This translates to a price of S$1,515 per square foot per plot ratio, which we believe is a reasonable price given a competitive land market currently.

We expect sale prices of between S$2.3k – S$2.4k when the new project is launched. Subject to approval, the JV plans to redevelop the site into a condominium project comprising four 25-storey blocks with close to 800 units and a basement carpark. Most apartments will have a NorthSouth orientation with many units commanding sea views. We note that CDL was also the original developer of Amber Park three decades ago, and management has indicated that they are intimately familiar with the location.

Near New Tanjong Katong MRT Station to be Completed in 2023

The site is located in a private residential area in the Katong and East Coast area and is accessible via the East Coast Parkway. It is also within 1km to Tanjong Katong Primary School and 2km to CHIJ (Katong) Primary, Haig Girl’s School, Kong Hwa School and Tao Nan School. The new Tanjong Katong MRT station will also be located 200m from the site when it is completed in 2023. W

e update our model for the site acquisition and firmer residential ASP assumptions, given recovering home prices and stronger market conditions, and our fair value estimate increases from S$12.39 to S$12.90. Maintain BUY.

 

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Singapore REITs Performance

Singapore’s manufacturing and electronics Purchasing Managers’ Index (PMI) continued their robust momentum, coming in at 52.0 and 53.6 for the month of Sep, representing MoM increases of 0.2 and 0.4 points, respectively. 

 

 

This also represented the 13th and 14th consecutive month of expansion, respectively.

 

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Similarly, we saw last week another month of strong industrial production in Singapore for Aug, with YoY growth of 19.1% registered. This was higher than the street’s expectations for an increase of 16.0%. This trend has also been observed in the Eurozone, with the manufacturing PMI of 58.1 in Sep at the highest level since Feb 2011.

We believe these data points augur well for the sentiment of industrial REITs, although this would be partly offset by continued supply pressures in Singapore in the near-term which would weigh on rental reversion figures.

We like Suggest Frasers Logistics & Industrial Trust [BUY; FV: S$1.22] and Mapletree Logistics Trust [BUY; FV: S$1.35] within the industrial REITs space.

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4. CHINA AVIATION
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KLSE:Buy PALETTE || Level 0.300 || Cut Profit @ 0.370 || Return 23.33%

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Singapore Stocks Market Analysis of ComfortDelGro Corp

ComfortDelGro Corp - Downgrade: A rail disappointment

 
■ Regulator awards TEL contract to SMRT despite poorer track record
■ We see greater uncertainty over the outcome of future contracts
■ Downgrading to Hold (3) from Buy (1); lowering TP to SGD2.09

What's new:

The recent award of the Thomson-East Coast Line (TEL) rail contract to SMRT (not listed) raises uncertainty over the regulator’s evaluation process for future transport service contracts, in our view. As our original expectation for ComfortDelGro (CDG) to be a key beneficiary of greater public transport usage in Singapore appears diminished, we downgrade our rating on the stock to Hold (3) from Buy (1).

 

What's the impact:

The TEL contract was widely expected to be a key near-term catalyst for CDG. While we had not factored its potential into our forecasts, we estimate that the rail line could have contributed around SGD0.08/share to our valuation. According to the regulator, SMRT’s bid of SGD1.7bn was 30% below that of CDG while still ranking higher on quality – despite CDG’s relatively better rail reliability track record. More importantly, the outcome of the bid raises uncertainty over the bidding and evaluation process for future contracts in both the bus and rail segments.

 
In the rail segment, CDG remains in negotiations with the regulator over the transitioning of its existing lines to a new rail model (see our note dated 20 July 2016), which we think could now lead to a less favourable resolution. Meanwhile, as bus packages currently operated by CDG are to beprogressively tendered out over the next decade, we see elevated risks
that bids may have to be priced more competitively for CDG to retain them.
Finally, while we have been aware of competitive pressures, we nowexpect CDG’s taxi business to see a structural longer-term decline. In terms of forecast changes, we cut our near and longer-term growth and margin expectations for CDG’s Singapore businesses across its segments, resulting in 4-13% cuts to our 2017-19 EPS forecasts. 

 

We now look for a structural decline in CDG’s taxi business over a 10-year horizon, as well as reduced profitability outlook for bus and rail. We also factor potential fare reductions into our 2018-19 rail forecasts following the regulator’s recent fare review exercise.

 

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Singapore Stocks to Watch

Here are a few Singapore Stocks that could move the market this Monday morning:

Mandarin Oriental says it has gotten recommendations from potential buyers to gain the gathering’s The Excelsior inn in Hong Kong. In a recording to SGX post-retail close on Friday. Offers in Mandarin Oriental surged 20.8%, or 44 US pennies higher, to close at US$2.56.

Roxy-Pacific announced that its partner organization, RH Guillemard, has consented to obtain freehold private locales at 12 and 14 Guillemard Lane for $22.5 million. Offers in Roxy-Pacific shut 1 pennies higher at 53 pennies on Friday.

Pavillon Holdings is getting units in a business complex and land in JB for RM52 million ($16.7 million). Offers in Pavillon shut 0.1 penny higher at 4.9 pennies.

BlackGold Natural Resources on Friday went into a Heads of Agreement (HOA) with different gatherings to shape another consortium for the improvement, development, operation, and upkeep of a 2 x 300MW coal-terminated power plant in Riau, Indonesia. Offers in BlackGold last exchanged at 11 pennies on Friday.

Singapore Airlines Group’s traveler stack factor (PLF) enhanced by 1.2 rate focuses to 80.9% in August. Offers in SIA shut 5 pennies bring down at $10.13 on Friday, up 4.8% year to date.

Lian Beng Construction (1988), a completely possessed auxiliary of Lian Beng Group, has been granted an agreement worth around $162 million to build an apartment suite lodging improvement at Martin Place. Offers in Lian Beng shut 1 penny higher at 62 pennies on Friday.

ICP is obtaining the land, building, and friends of Geo Hotel in Kuala Lumpur for a sum of $27.5 million to rebrand it into a Travelodge Inn. Offers in ICP shut down at 0.8 penny on Friday.

Low Keng Huat, the development organization, and engineer, detailed 2Q17 profit fell 99% to $474,000 from $43.1 million a year back because of an exceptional pickup of $53.8 million from the offer of Duxton Hotel Saigon in 2Q16. Income rose 59% to $13.6 million. Offers in Low Keng Huat shut down at 66 pennies on Friday.

Heatec Jietong, the warmth exchanger, and channeling authority, secured three contracts under its warmth exchanger business fragment with a joined worth of $4 million. Offers in Heatec Jietong shut down at 6.5 pennies on Friday.

Global Stocks Markets

Markets in US shut at record levels on Friday.The & Dow rose 64.86 focuses to close at 22,2686.34, a record. The&; S&P 500 also indented record highs, progressing 0.2% to complete at 2,500.23. The& ;Nasdaq composite shut 0.3% higher at 6,448.47.

Singapore Stocks Market

The offering of the three banks brought about the Straits Times Index completing 11.39 focuses bring down at 3,209.56 on Friday. Two billion units of exchanges esteemed at $1.7 billion were finished. Barring warrants, there were 174 ascents versus 212 falls.

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• Blumont
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STOCK INVESTMENT : KGI downgrades Ezion to 'sell' on weak fundamentals .

KGI Securities has downsized Ezion Holdings to an offer from a hold because of the organization's feeble essentials and high valuation contrasted with worldwide companions.

"Since our last redesign, Ezion's share cost has ascended by around 50 for each penny and presents impressive drawback hazard. Along these lines, we downsize Ezion to offer,'' KGI expert Joel Ng composed.

He has an objective cost of 20 Singapore pennies for Ezion, which gives benefit rigs and seaward coordinations bolster administrations to the oil and gas industry.

At 10.24am, Ezion was exchanging at S$0.315 a share, down 1.5 Singapore pennies, or 4.545 for each penny. More than five million shares changed hands.

A key sympathy toward the stock is the organization's powerless income position and arranged capital use of US$160 million to US$180 million for financial year 2017. This, Mr Ng said, may put advance weight on its accounting report if working money streams were to debilitate one year from now. He likewise noticed that Ezion's net outfitting after its rights issue is still raised.

Tormenting the stock is likewise the overarching supply overhang in the seaward bolster part. "We can expect facilitate decrease in usage and day rates, putting Ezion's now low profit for value under further weight,'' Mr Ng said.

The stock could be hosed if there are further compose downs or disabilities, higher than anticipated capital consumption because of upkeep and redesign works, and deferrals in receivables accumulation that may put weight on its accounting report.

Notwithstanding, a supported rally in raw petroleum costs above US$60 a barrel driven unsuspecting and geopolitical issues could give an upward impetus.

Ezion investigated Thursday that its second from last quarter net benefit fell 69 for every penny to US$9.4 million from US$30.3 million a year prior.

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• FIRST  RESOURCES
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Our Stock Recommendation-

• SGX INTRADAY SIGNAL:BUY IFAST  AT 0.87 TARGET 0.91, 0.95  SL 0.82 … 

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4 SGX Stock Market Strategies To Pick Good Penny Stocks

When it comes to trade with penny stocks, you need to think on impact full strategies to execute as penny stocks are usually speculative & involve high risk factors due to liquidity & small capitalization. Therefore, investments in penny stocks need capital investment strategy. As investment is risky in penny stocks, here are some investment strategies shared for how to pick good stock while trading in Singapore stock market.

Analyze the Stocks?

 

Being investors in penny stocks, you shouldn’t consider the source of internet forums. Instead of this, to analyze whether there is sufficient amount of stock in the investing community, it’s recommended for investors to analyze the demand of stocks. And, this can be regulated by average daily volume of the stock which will function as good Stock trading picks for you. Preferably, the least volume of stocks should be more than 100,000 units each day.

Fundamental of Penny Stock:

 

Fundamentals research is one of the important things to follow. The fundamental criteria which must e followed includes EPS (Earnings per share) or Discount to Net asset value (NAV) which means that stock is at lower price than its total accounting value.

EPS is a profitable & one of the easiest ways to measure stocks, if company is profitable. But, if the company is trading at the same time at a discount to NAV then it may happen that market hasn’t valued properly.

Also, when investing in penny stocks; avoid all dividends as these are not reliable & have worst selling point.

Pricing Trends:

 

If stock pricing getting lower down then it’s better to quit the trading. Also, it’s recommended to go for the stocks which are trading in an increasing manner but also not remains all time high. Getting Stock Picks will be a profitable option to get some idea about pricing trends.

Check out the News:

 

Checking out the news is one of the best factors to provide Stock signals. Knowing the sectors offering growth potential or to know where the country’s economical stands are the beneficial factors to look for. The articles from these kinds of sources highlighting the penny stocks will help you to be confident for investing in stocks.

Investment in penny stocks will be profitable if invested by understanding the financial knowledge. However, following the above mentions strategies will be beneficial to invest in penny stocks.

Source: {http://www.mmfsolutions.sg/blog/4-strategies-to-pick-good-penny-stocks-in-sgx-stock-market/}