Hong Kong Stock Watchlist - 6/11/2017

Market caps in HKD

1. Tencent Holdings Ltd - 3.495t - gaming
2. Ping An Insurance (Grp) Co of China Ltd. - 1.35t - financial
3. Agricultural Bank of China Ltd - 1.404t - banking
4. Geely Automobile Holdings Ltd - 216.9b - automobile
5. Guangzhou Automobile Group Co Ltd - 180.9b - automobile
6. ANTA Sports Products Ltd - 92.7b - sporting goods manufacturer
7. Dali Foods Group Co Ltd - 82.7b - f&b
8. Haier Electronics Group Co Ltd - 60.4b - home electric appliance
9. Minth Group Ltd - 50.2b - auto parts manufacturer
10. SITC International Holdings Co Ltd - 19.8b - transport and logistics
11. Fu Shou Yuan International Group Ltd - 11.9b - funeral services
12. Texhong Textile Group Ltd - 9.7b - textile manufacturer
13. Yihai International Holding Ltd - 7.7b - f&b compound manufacturer
14. Essex Bio-Technology Ltd - 2.8b - pharma for eye and surface wounds

US Stock Watchlist - 6/11/2017

Market caps in USD

1. Alphabet Inc - 723.4b - tech
2. Alibaba Group Holding Ltd - 469.2b - e-commerce
3. Intel Corp - 216.8b - IT, cloud
4. UnitedHealth Group Inc - 205b - healthcare services
5. U.S. Bancorp - 91.4b - financial, banking
6. Applied Materials Inc - 60.3b - semiconductor equipment manufacturer
7. Micron Technology Inc - 50.4b - semiconductor manufacturer
8. Lam Research Corp - 33.5b - semiconductor services and equipment manufacturer
9. Principal Financial Group Inc - 19.7b - investment management
10. KLA-Tencor Corp - 16.6b - semiconductor services
11. IPG Photonics Corp - 11.5b - laser equipment manufacturer
12. YY Inc - 5.6b - social networking

Japan Stock Watchlist - 6/11/2017

Market caps in JPY

1. SMC Corp - 2.911t - pneumatic product manufacturer
2. Daiwa House Industry Co Ltd - 2.824t - real estate
3. Asahi Group Holdings Ltd - 2.531t - alcohol beverages
4. Kajima Corp - 1.307t - construction
5. Koito Manufacturing Co Ltd - 1.252t - automotive lighting equipment manufacturer
6. Oracle Corp Japan - 1.225t - IT, cloud
7. Disco Corp - 966b - semiconductor equipment manufacturer
8. Fuji Electric Co Ltd - 624b - industrial equipment manufacturer
9. Square Enix Holdings Co Ltd - 600b - gaming
10. Harmonic Drive Systems Inc - 585b - precision speed reducer
11. THK Co Ltd - 581b - industrial equipment manufacturer
12. Mebuki Financial Group Inc - 567b - banking
13. Screen Holdings Co Ltd - 517b - semiconductor equipment manufacturer
14. Ulvac Inc - 419b - vacuum machinery
15. Shima Seiki Mfg. Ltd - 260b - manufacturing

Guangzhou Automobile Group (2238.HK)

3/11/2017

State-owned automobile group engaged in diversified business including R&D and manufacturing for vehicles (automobiles and motorcycles) and parts, automotive trade services, automotive financial services etc. GAC owns or has directly invested in dozens of businesses, including GAC Motor, GAC Honda, GAC Toyota, GAC Mitsubishi, GAC Fiat Chrysler, GAC Engineering etc.

metrics

1. last done 19.36 hkd
2. market cap 180965m hkd, 31.6b sgd
3. pe 12.55, pb 2.15
4. total debt to equity 33.8%, current ratio 1.44
5. dividend yield 1.97%, 5yr cagr 27.7%, consistent
6. 5yr cagr: revenue 30.7%, earnings 40.8%, consistent
7. strong cash flow

operations

1. 5 business segments
1. R&D
2. manufacture of vehicles and motorcycles
1. joint ventures with honda, toyota, Fiat-Chrysler, Mitsubishi and GAMC
2. hybrid and full-electric vehicles
3. joint venture Wuyang-Honda - motorcycles
3. parts and components
4. commercial services
5. financial services

1. growth seems more from SUVs, growing 61% yoy in 1H2017
2. electric vehicle sales and production growth 14.4% and 19.7% in respectively 1H2017

investment thesis

1. established brands
2. value chain in automobile industry
3. cheap relative to peers

risks

1. slow down in China vehicle industry

Sembcorp Marine (S51.SI)

2/11/2017

metrics

• last done $2.00
• market cap sgd 4.2b
• pe 51.12, pb 1.67, nav 1.206
• total debt to equity 162.18%, current ratio 1.34

relative valuation

• keppel corp pb 1.17
• sembcorp ind pb 0.88
• sembcorp marine 1.67

operations

• 2 main segments
• rigs & floaters, repairs & upgrades, offshore platforms and specialised shipbuilding
• ship chartering
• Rigs and floaters remained the largest segment, accounting for 40% of total revenue followed by offshore platforms at 36%, repair and upgrades at 20% and others at 4%

 summary

1. Successfully sold nine Pacific Class 400 jack-up drilling rigs to Borr Drilling, sold for about US$1.3 billion, to improve liquidity position. with current ratio at 1.34, liquidity should not be a problem in the meantime
1. interest expenses to decline as debt is reduced
2. We believe provisions of $329 million made in FY2015 for the Sete Brasil contracts remain adequate under present circumstances
3. With deliveries till 2020, our net order book currently stands at $7.97 billion. Excluding Sete Brasil projects, net order book totals $4.85 billion
4. Good progress has been made in the development and commercialisation of our Gravifloat technology for near-shore gas infrastructure solutions

risks

• execution risks from existing order book and future orders
• unforeseen impairment risks
• oil price decline

Market Outlook 1/11/2017

Wed Nov 1

• US Manufacturing PMI (reported monthly early in the month)
• DBS Group earnings report

Thurs Nov 2

• Best World earnings report
• China Aviation earnings report

Friday Nov 3

• US Nonfarm payroll (reported on first Friday of following month)
• US Non-manufacturing PMI (reported monthly early in the month)
• OCBC earnings report
• Sunningdale Tech earnings report

Summary

Week of small to mid cap earnings reports as well as banks. We see that the banks have already rallied in anticipation of the results this week, so upside risk reward ratio is suppressed. 

Other than the earnings, US monthly figures coming out on Wed might push market higher given that figures have been so good in the recent past. Given HSI decline, could be a good time to enter. 

Brent oil above 60. Positive for Keppel Corp.

US Tech stocks unending rally. Why?

SG Manufacturing stocks recent breakout. Why?

• http://www.businesstimes.com.sg/government-economy/singapore-business-expectations-up-for-next-six-months-services-show-signs-of

Europe Stock Watchlist - 28/10/2017

UK Stocks

1. WORLDPAY GROUP PLC ORD 3P
2. INTERNATIONAL CONSOLIDATED AIRL
3. RPC GROUP PLC ORD 5P
4. METRO BANK PLC ORD 0.0001P
5. PRUDENTIAL PLC ORD 5P
6. ANGLO AMERICAN PLC ORD USD0.549
7. NMC HEALTH PLC ORD 10P
8. BABCOCK INTERNATIONAL GROUP PLC
9. WHITBREAD PLC ORD 76 122/153P
10. WIZZ AIR HOLDINGS PLC ORD GBP0.
11. BARRATT DEVELOPMENTS PLC ORD 10
12. PERSIMMON PLC ORD 10P
13. FEVERTREE DRINKS PLC ORD 0.25P
14. Berkeley Group Holdings PLC

Germany Stocks

1. HELLA KGAA HUECK+CO. O.N.
2. LEG IMMOBILIEN AG NA O.N.
3. KION GROUP AG
4. VONOVIA SE NA O.N.
5. DEUTSCHE WOHNEN AG INH
6. GRAND CITY PROPERT.EO-10
7. ALLIANZ SE NA O.N.
8. BAYER AG NA O.N.
9. WIRECARD AG
10. MTU AERO ENGINES NA O.N.
11. CONTINENTAL AG O.N.
12. INFINEON TECH.AG NA O.N.
13. HENKEL AG+CO.KGAA ST O.N.
14. BECHTLE AG O.N.

Japan Stock Watchlist - 28/10/2017

Market cap based on USD

1. 9022.T Central Japan Railway Co - 35.8b - railway
2. 9202.T ANA Holdings Inc - 13.27b - aviation
3. 7735.T Screen Holdings Co Ltd - 3.54b - semiconductor equipment manufacturing
4. 8053.T Sumitomo Corp - 18.22b - industrial conglomerate
5. 3064.T MonotaRO Co Ltd - 3.52b - manufacturing supplier
6. 6098.T Recruit Holdings Co Ltd - 40.56b - recruitment agency
7. 4768.T Otsuka Corp - 6.33b - IT
8. 9684.T Square Enix Holdings Co Ltd - 4.8b - gaming
9. 4716.T Oracle Corp Japan - 10.59b - IT
10. 8876.T Relo Group Inc - 3.6b - welfare outsourcing
11. 4587.T PeptiDream Inc - 4.02b - pharma
12. 9433.T KDDI Corp - 65.33b - telecommunications
13. 9062.T Nippon Express Co Ltd - 6.45b - transportation
14. 6728.T Ulvac Inc - 3.36b - vacuum machinery
15. 6383.T Daifuku Co Ltd - 5.93b - equipment manufacturing
16. 6324.T Harmonic Drive Systems Inc - 4.65b - precision speed reducer
17. 6503.T Mitsubishi Electric Corp - 36.63b - electrical equipment manufacturing
18. 6268.T Nabtesco Corp - 4.78b - industrial machinery manufacturer
19. 6146.T Disco Corp - 8.11b - semiconductor equipment manufacturing
20. 6273.T SMC Corp - 25.08b - manufacturer
21. 9962.T Misumi Group Inc - 7.31b - manufacturer
22. 1925.T Daiwa House Industry Co Ltd - 24.39b - real estate
23. 7747.T Asahi Intecc Co Ltd - 3.6b - healthcare equipment manufacturer
24. 7532.T Don Quijote Holdings Co Ltd - 6.5b - discount stores
25. 7453.T Ryohin Keikaku Co Ltd - 7.57b - self brand retail goods
26. 2782.T Seria Co Ltd - 4.35b - discount stores
27. 3092.T Start Today Co Ltd - 9.47b - e-commerce
28. 8954.T Orix JREIT Inc - 3.47b - reit
29. 8960.T United Urban Investment Corp - 4.32b - reit
30. 3283.T Nippon Prologis REIT Inc - 3.99b - reit
31. 2229.T Calbee Inc - 4.88b - food
32. 3391.T Tsuruha Holdings Inc - 5.91b - drug stores
33. 2127.T Nihon M&A Center Inc - 3.72b - m&a brokering
34. 6770.T Alps Electric Co Ltd - 5.63b - manufacturing
35. 6504.T Fuji Electric Co Ltd - 4.28b - manufacturing
36. 6594.T Nidec Corp - 38.43b - manufacturing
37. 1812.T Kajima Corp - 10.77b - construction
38. 1808.T Haseko Corp - 4.3b - construction
39. 3401.T Teijin Ltd - 4.16b - chemical products
40. 4042.T Tosoh Corp - 7.35b - chemical products
41. 4021.T Nissan Chemical Industries Ltd - 5.69b - chemical products
42. 7269.T Suzuki Motor Corp - 26.99b - automobile
43. 7988.T Nifco Inc - 3.25b - manufacturing
44. 7276.T Koito Manufacturing Co Ltd - 10.46b - automobile equipment manufacturing
45. 7270.T Subaru Corp - 26.79b - automobile
46. 5975.T Topre Corp - 1.52b - automobile equipment manufacturing

Singapore REIT watchlist

1. Mapletree Commercial Trust - 4.4b
2. Keppel REIT - 3.7b
3. Mapletree Industrial Trust - 3.3b
4. Mapletree GCC Trust - 3b
5. Croesus Retail Trust - 1.5b - japan, low rates, potential takeover
6. Keppel DC REIT - 1.4b
7. CapitaLand Retail China Trust - 1.4b
8. Lippo Malls Trust - 1.2b - indonesia, strong spending growth, acquisitions
9. Frasers Commercial Trust - 1.1b
10. First REIT - 1b
11. Viva Industrial Trust - 800m
12. Ascendas India Trust - 
13. Frasers L&I Trust - 

Hong Kong Stock Watchlist

Hong Kong Stock Watchlist:

1. 0700.HK TENCENT - 331.19b - gaming
2. 2318.HK PING AN - 117.31b - insurance
3. 0175.HK GEELY AUTO - 17.33b - automotive
4. 2018.HK AAC TECH - 15.38b - handset and acoustic manufacturing
5. 2238.HK GAC GROUP - 11.7b - automotive
6. 3606.HK FUYAO GLASS - 9.75b - glass manufacturing for vehicles
7. 1093.HK CSPC PHARMA - 8.86b - pharma
8. 0669.HK TECHTRONIC IND - 8.55b - power tools manufacturer
9. 0696.HK TRAVELSKY TECH - 8.36b - it services
10. 2020.HK ANTA SPORTS - 8.08b - sportwear
11. 3311.HK CHINA STATE CON - 7.14b - construction
12. 3969.HK CHINA CRSC - 6.54b - railway services
13. 0285.HK BYD ELECTRONIC - 5.11b - handset component manufacturer
14. 0425.HK MINTH GROUP - 4.73b - automotive component manufacturer
15. 1316.HK NEXTEER - 4.01b - automotive component manufacturer
16. 0958.HK HN RENEWABLES - 2.98b - renewable electric utility
17. 6198.HK QINGDAO PORT - 2.78b - port services
18. 0345.HK VITASOY INT'L - 2.19b - food and beverage supplier
19. 0698.HK TONGDA GROUP - 1.55b - handset electricals manufacturing
20. 1448.HK FU SHOU YUAN - 1.34b - funeral services
21. 0354.HK CHINASOFT INT'L - 1.34b - it services
22. 1579.HK - Yihai International Holding Ltd - 360m - food manufacturer
23. 2283.HK TK GROUP HLDG - 351.11m - plastics manufacturer
24. 1061.HK ESSEX BIO-TECH - 316.12m - pharma eye

Singapore Stocks Watchlist - 14/62017

Singapore Stocks Watchlist - 14/62017

1. D05.SI DBS - 37.98b - bank
2. V03.SI Venture - 2.51b - industrial manufacturing
3. OV8.SI Sheng Siong - 1.07b - grocery
4. CGN.SI Best World - 576m - beauty product sales
5. AP4.SI Riverstone - 555m - rubber glove manufacturer
6. BHQ.SI Sunningdale Tech - 295m - industrial manufacturing
7. CH8.SI China Sunsine - 291m - chemical manufacturer
8. KJ9.SI Cogent - 274m - logistics
9. 1D8.SI Singapore O&G - 241m - healthcare
10. RE4.SI Geo Energy Res - 222m - coal producer
11. 5OT.SI SingMedical - 208m - healthcare
12. 5TG.SI 800 Super - 171m - rubbish
13. AWX.SI AEM - 134m - semiconductor industrial manufacturer
14. 40T.SI ISEC - 125m - healthcare
15. T12.SI Tat Seng Pkg - 68m

US Stock List - 14/6/2017

1. GOOGL - Alphabet Inc - 673.57b - tech, advertising
2. AMZN - Amazon.com, Inc. - 467b - e-commerce
3. FB - Facebook Inc - 443.12b - social media, advertising
4. BABA - Alibaba Group Holding Ltd - 345b - e-commerce
5. TSM - Taiwan Semiconductor Manufacturing Co Ltd - 184.3b - semiconductor manufacturer
6. DIS - Walt Disney Company (The) Commo - 168.90b - entertainment
7. SBUX - Starbucks Corporation - 92.43b - food and beverage
8. NKE - Nike, Inc. Common Stock - 87.10b - sportswear
9. NVDA - NVIDIA Corporation - 86.26b - graphics and artificial intelligence
10. NVO - Novo Nordisk A/S Common Stock - 80.07b - pharma
11. CRM - Salesforce.com Inc - 64.41b - it services
12. GM - General Motors Company Common S - 50.63b - automotive
13. NTES - NetEase Inc - 37.81b - gaming
14. APH - Amphenol Corp - 23.03b - electricals manufacturer
15. TSN - Tyson Foods, Inc. Common Stock - 21.25b - food producer
16. ULTA - Ulta Salon Cosmetics and Fragrance Inc - 19.07b - beauty services
17. WB - Weibo Corp - 16.07b - social media, advertising
18. CNC - Centene Corp - 12.71b - healthcare
19. UHS - Universal Health Services, Inc. - 11.33b - healthcare, hospitals
20. ANET - Arista Networks Inc - 10.54b - it services
21. ZTO - ZTO Express (Cayman) Inc - 10.37b - e-commerce logistics
22. TAL - TAL Education Group American De - 9.23b - education
23. VEEV - Veeva Systems Inc - 9.17b - it services 
24. NVR - NVR, Inc. Common Stock - 8.59b - home construction
25. CGNX - Cognex Corporation - 8.09b - tech manufacturer
26. ATHM - Autohome Inc - 4.86b - online automobile website
27. THO - Thor Industries, Inc. Common St - 4.76b - recreational vehicles
28. PAYC - Paycom Software Inc - 3.93b - it services
29. GRUB - GrubHub Inc - 3.77b - restaurant website
30. ELLI - Ellie Mae Inc - 3.68b - it services
31. LCII - LCI Industries - 2.17b - automotive component manufacturer
32. LOPE - Grand Canyon Education, Inc. - 3.69b - education

Centene (CNC)

9/6/2017
accumulate

metrics

• market cap usd 13.37b
• pe 19.15, pb 2.2
• 5 year: revenue cagr 38.04%, earnings cagr 30%, consistent
• total debt to equity 78.97%
• roe 13.88, roa 4.05, recent fall
• growing cash pile with strong operating cash flow

operations

• multi-national healthcare enterprise that provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals
• Managed Care 92% revenues
• provides health plan coverage to individuals through government subsidized programs, including Medicaid
• and Specialty Services 8%
• We provide or arrange health care benefits for services normally covered by Medicare, plus a broad range of health care benefits for services not covered by traditional Medicare, usually in exchange for a fixed monthly premium per member from CMS
• We offer commercial health care products to individuals and large and small employer groups as well as products to individuals through the Health Insurance Marketplace
• 30 years track record
• the federal government is a significant customer to our Specialty Services segment due to our Federal Services business
• We operate in a highly competitive environment

outlook

• We believe recognition of the value of managed care as a means of delivering improved health outcomes for Medicaid beneficiaries and effectively controlling costs will continue to strengthen. A growing number of states have mandated that their Medicaid recipients enroll in managed care plans. Other states are considering moving to a mandated managed care approach
• revenue guidance for 2017: up 17% yoy 

Alibaba Group Holding (BABA)

9/6/2017
buy
unstoppable e-commerce giant with strong and consistent growth. #1 e-commerce sites and diversified business. pe 50.27 reasonable for strong growth in bullish market.

metrics

• market cap usd 310.8b
• pe 50.27, pb 7.57
• 5 year: revenue cagr 35.62%, earnings cagr 38.68%, consistent
• total debt to equity 32.55%
• roe 17.5%, roa 10.62%, inconsistent
• growing cash pile with strong operating cash flow

operations

• taobao.com - #1 e-commerce app in china
• lazada.com - #1 e-commerce app in 5 SEA countries
• many others #1 everywhere
• segments: core commerce, cloud computing, digital media and entertainment, innovation and initiatives, strategic investments

outlook

• unstoppable
• goal to reach usd 1tn gross merchandise volume by 2020, currently usd 547 bn 

Alphabet (GOOGL)

9/6/2017
buy
monopoly company, owning the #1 search engine in the world and #1 video streaming website in the world. revenues from advertisements expected to grow into the future. ultra large cap stock with strong yoy growth and reasonable pe of 32.37.

metrics

• market cap usd 687.5b
• pe 32.37, pb 4.80
• 5 year: revenue cagr 14.37%, earnings cagr 12.75%, consistent
• total debt to equity 2.83%
• roe 15.02%, roa 12.37%, stable
• growing cash pile and operating cash flow

operations

• We generate revenues primarily by delivering relevant, cost-effective online advertising
• Google.com, the Google app, YouTube, and other Google owned and operated properties like Gmail, Google Maps, and Google Play
• Apps, in-app purchases, and digital content in the Google Play store; • Hardware; • Google Cloud offerings; and • Other miscellaneous products and services.
• 50% revenue in US, 30% EMEA, 15% APAC, 5% rest of world

outlook

• online shift will continue to benefit our business
• Non-advertising revenues have grown over time
• hardware sales, sales of apps, in-app purchases and digital content products, and service and licensing fees

risks

• foreign exchange risk from revenues derived overseas
• competition
• economic conditions

Chinasoft International (0354.HK)

22/5/2017

metrics

• market cap 10,545.98 mil hkd (1.88bn sgd)
• last done 4.38 hkd
• pe 19.60, pb 2.18, ev/ebitda 11.82
• dividend yield 0.28
• 10 year: revenue cagr 23% consistent, 6 year: earnings cagr 25% consistent
• total debt / equity 31.92%
• roe 11.77%, roa 6.04%, both consistently increasing
• strong cash flow and healthy and increasing cash in balance sheet

NS Solutions (2327:JP)

22/5/2017

metrics

• market cap 259,010.80mil jpy  (3.2bn sgd)
• last done 2,603 jpy
• pe 17.42, pb 2.04, ev/ebitda 11.70
• dividend yield 1.73, 7 year: dividend cagr 22%, consistent
• 7 year:  revenue cagr 5.2% consistent, earnings cagr 8% consistent
• total debt / equity 0.71%
• roe 12.59%, roa 7.72%
• positive cash flow and strong cash in balance sheet

Yihai International Holding (1579.hk)

17/5/2017
buy - ld 4.07 hkd, tp 6.90, upside 69%
sole supplier of hot pot soup flavoring products to Haidilao Group, popular steamboat chain.

metrics

• market cap 4229.48 hkd mil (760 sgd mil)
• last done 4.06 hkd
• pe 16.64, pb 2.96
• dividend yield 1%
• 4 year: revenue cagr 36% consistent, earnings cagr 70% consistent
• total debt to equity 0%
• roe 26.52%, roa 18.55%
• strong positive cash flow, spike in cash in balance sheet

operations

• In China, the Group is the exclusive supplier of hot pot soup flavoring products to Haidilao Group, supplying customized hot pot soup flavoring products to Haidilao Group, and supplying retail products and customized condiments to Shuhai Supply Chain and Youdingyou (related parties of the Company). The Group is also a provider of cooking condiment to the family customers in China, suppliers of catering services and food companies
• leading and rapidly growing compound condiment producer in China
• sales of the Group covered 360 cities in China, including all tier-1 cities, 32 tier-2 cities and 324 tier-3, tier-4 and lower-tier cities
• number of distributors of the Group reached 782
• as of 31 December 2016, the Group introduced a total of 41 flavoring products, 9 dipping sauce products and 15 Chinese-style compound condiment products
• expansion of e-commerce channels - Tmall and Suning E-commerce
• As of 31 December 2016, the Group exported products of eight categories to 14 countries and regions, including Hong Kong, Macau, Burma and Malaysia

outlook

• In 2016, the market size of China’s catering industry increased by 10.8% year-on-year to RMB3.6 trillion, while the total retail sales of consumer goods topped RMB33.0 trillion, a year-on-year increase of 10.4%
• The market size of the PRC compound condiment is expected to reach RMB148.8 billion by 2020, representing a CAGR of 14.7% over 2015-2020 and 22.1% of the overall condiment market of China

Forever stock list

Singapore:

1. DBS Group Holdings Ltd
2. Capitaland Ltd
3. Venture Corporation Ltd

Hong Kong:

1. 0700.HK - Tencent Holdings Ltd
2. 2318.HK - Ping An Insurance Group Co of China Ltd
3. 1299.HK - AIA Group Ltd
4. 2018.HK - AAC Technologies Holdings Inc
5. 0696.HK - TravelSky Technology Ltd
6. 0669.HK - Techtronic Industries Co Ltd
7. 2020.HK - ANTA Sports Products Ltd
8. 0285.HK - BYD Electronic International Co Ltd
9. 0698.HK - Tongda Group Holdings Ltd
10. 1448.HK - Fu Shou Yuan International Group Ltd
11. 0354.HK - ChinaSoft International Ltd
12. 1579.HK - Yihai International Holding Ltd

Tat Seng Packaging (T12)

10/5/2017
accumulate - ld 0.575, tp 0.70, upside 21%

1. undervalued pb < 1 and pe 6.2
2. fundamentally sound - china manufacturing figures ok
3. attractive and growing dividends with low payout ratio

metrics

• market cap S$ 90.39 mm, float 16.69%
• last done S$ 0.575
• pe 6.228, pb 0.865, ev/ebitda 3.111
• dividend yield 3.47%, dividend 5yr cagr 24% consistent, payout 33%
• revenue 5yr cagr 4.8%, earnings 5yr cagr 13.4%, uptrend
• total debt / equity 33%, current ratio 1.49
• roe 14.7%, roa 6.3%
• strong positive cash flow, stable and growing cash in balance sheet
• shareholders: Hanwell Holdings Limited 63.95%, See Moon Loh 15%

operations

• manufactures and sells corrugated paper packaging products such as corrugated boards and cartons for the packaging of electronics and electrical, food, pharmaceutical and other products
• 85% of FY16 revenue was from within China, with the rest derived from Singapore
• For FY15, three largest customer sectors were Printing, Publishing & Converters (40%), Medical, Pharmaceutical & Chemical (27%) and Electronics & Electrical (20%)
• five facilities in China – namely, Suzhou, Jiangsu province; Hefei, Anhui province; Nantong Rugao and Natong Tongzhou, both in Jiangsu province and lastly, Tianjin

outlook

• annual report 2016
• We expect the operating environment in China and Singapore to remain challenging
• For our Singapore operations, raw material costs may increase if the exchange rate of US Dollar against Singapore Dollar is strengthened further
• In China, with increased environmental awareness and measures introduced by the Chinese government to deal with pollution, we expect the cost of raw materials and processing costs to increase
• china pmi > 50, china consumer sentiment > 100

Cogent Holdings (KJ9)

11/5/2017

buy - ld 0.785, tp 1.08, upside 37%

1. strong growth with reasonable valuation pe 11.9
2. strong business - properties located in good locations, value chain services
3. clear growth strategy

metrics

• market cap S$ 382.8 mm, float 12.93%
• last done S$ 0.8
• pe 11.935, pb 3.03, ev/ebitda 8.812
• dividend yield 2.35, dividend cagr ~70%, consistent
• revenue cagr ~7.3% consistent, earnings cagr 32% consistent
• total debt / equity 94.7%, declining past 3 years
• roe 27.9%, roa 9.07%
• strong positive cash flow, stable cash in balance sheet
• shareholders: Yeow Khoon Tan (chairman) 70.27%, Yeow Lam Tan (managing director) 13.58%

operations

• 4 business segments
• transportation management services (19% of revenue) - over 100 prime movers and 400 trailers, transport containers
• warehouse & property management services (40% of revenue) - inventory management, container stuffing and un-stuffing activities, re-packing and palletisation, forklift handling, chemical sampling and drumming services, the grandstand (largest shopping and lifestyle hub in bukit timah)
• container depot management services (19% of revenue) - container depot and yard operations
• automotive logistics management services (22% of revenue) - 10 storage facilities and capability of storing more than 3,000 cars at various locations, customs processing
• Cogent One-Stop Logistics Hub - 1.6 million square feet Gross Floor Area, warehousing, container depot and transportation services, high volume of deliveries can be made simultaneously within minutes, in Singapore’s prime petrochemical hub will give Cogent a strategic advantage to outperform its competitors

growth strategy

• clear growth strategy
• Expansion of warehouse & container business in Malaysia - Port Klang Project, expanding the warehouse business with an additional 270,000 square feet of build-up area. The warehouse has commenced operations in March 2017
• Jurong Island Chemical Logistics Facility project on Jurong Island - 3.5-hectare plot of land, cater to the strong and growing demand for one-stop logistics services within Jurong Island, took over on 13 October 2016
• recently awarded 5.9-hectare container depot at Tuas South and our patented Sky Depot at the Cogent 1.Logistics Hub, both of which are expected to be fully operational by the 2nd quarter of 2017

risks

• The financial liabilities of the company are interest-free - little interest rate risk
• The group’s transactions are largely denominated in Singapore dollars - little fx risk
• transportation management services revenue declines past 2 years from 30.3mil to 25.9mil - could be due to industry slump or increased competition or increased costs

US Stock Watchlist

US Stock Watchlist:

High returns potential:

1. CVS Health Corporation Common
2. Sanderson Farms Inc.
3. Centene Corporation Common Stoc
4. Phillips 66 Partners LP Common 
5. Amgen Inc.
6. NetEase Inc.
7. Autohome Inc. American Deposita
8. Alphabet Inc.
9. Cirrus Logic Inc.
10. YY Inc.
11. Acacia Communications Inc.
12. AAC TECH HOLDINGS

More stocks:

1. Huntington Ingalls Industries 
2. American Outdoor Brands Corpora
3. Gentex Corporation
4. Dorman Products Inc.
5. Constellation Brands Inc. Comm
6. Boston Beer Company Inc. (The)
7. Patrick Industries Inc.
8. Apogee Enterprises Inc.
9. Watsco Inc. Common Stock
10. American Woodmark Corporation
11. Hollysys Automation Technologie
12. Orbotech Ltd.
13. IPG Photonics Corporation
14. Hormel Foods Corporation Common
15. Foot Locker Inc.
16. Lithia Motors Inc. Common Stoc
17. Stamps.com Inc.
18. Grand Canyon Education Inc.
19. Alibaba Group Holding Limited A
20. Copart Inc.
21. Universal Health Services Inc.
22. Mednax Inc. Common Stock
23. LGI Homes Inc.
24. Century Communities Inc. Commo
25. Wabash National Corporation Com
26. Dynagas LNG Partners LP Common 
27. GasLog Partners LP Common Units
28. ZTO Express (Cayman) Inc. Ameri
29. Air Lease Corporation Class A C
30. LCI Industries
31. Nautilus Inc. Common Stock
32. Spectra Energy Partners LP Com
33. EQT Midstream Partners LP Comm
34. United Therapeutics Corporation
35. Novo Nordisk A/S Common Stock
36. China Biologic Products Inc.
37. Sapiens International Corporati
38. Facebook Inc.
39. NIC Inc.
40. ASHTEAD GROUP PLC
41. Cardtronics plc
42. Stericycle Inc.
43. CBIZ Inc. Common Stock
44. Ubiquiti Networks Inc.
45. Taiwan Semiconductor Manufactur
46. Skyworks Solutions Inc.
47. Silicon Motion Technology Corpo
48. Texas Instruments Incorporated
49. JetBlue Airways Corporation
50. Monarch Casino & Resort Inc.
51. Spirit Airlines Inc.
52. Southwest Airlines Company Comm
53. Ruth's Hospitality Group Inc.

Australia Stock Watchlist

Australian ASX stock watchlist:

Retail food group Mcmillan Shakespeare Ltd Dicker Data Ltd Virtus Health Ltd SG Fleet Group Ltd AP Eagers Ltd Star Entertainment Group Ltd Credit Corp Group Ltd Event Hospitality and Entertainment Ltd Skydive Beach Group Ltd Blackmores Ltd Magellan Financial Group Ltd Hansen Technologies Ltd Smartgroup Corporation Ltd A2 MILK FPO NZ TechnologyOne Ltd Ramsay Health Care Ltd Idp Education Ltd Fisher & Paykel Healthcare Corporation Ltd Rural Funds Group

Ascendas India Trust

18/4/2017
Accumulate

1. Strong fundamentals
2. Favorable conditions in India
3. Clear growth strategy

Metrics

• Last done (as of 18/4/2017) S$1.115
• AUM S$1.484bn, Floor area CAGR 11% since 2008
• Debt: gearing 30%, well spread out debt maturity, 85% fixed, cost of debt 6.1%, INR and SGD
• Occupancy: 97%, WALE 3.5 years, retention rate 78%, 29% leases expiring in 2017, 43% expiring 2020 and beyond
• NAV: S$0.71, adjusted NAV S$0.90, PNAV ~1.24
• Dividend: S$0.0616 TTM 4QFY15/16 to 3QFY16/17, Dividend yield ~5.5%
• Net property income: CAGR 13% since 2013

Operations

• Owns six IT parks in India - Bangalore (42%), Chennai (29%) and Hyderabad (29%)
• Our strategy is simple – to generate attractive portfolio returns for Unitholders by investing in IT parks and office properties in key Indian cities 
• Total number of tenants: 284, largest tenant accounts for 7% of the portfolio base rent, top 10 tenants accounted for 37% of portfolio base rent, ~50% of tenants in IT sector

Investment thesis

• Clear growth strategy: 
• Development pipeline: 2.24m sq ft in Bangalore, 0.37m sq ft in Chennai, 0.41m sq ft in Hyderabad
• Sponsor assets: 3 sponsors - Ascendas Land International Pte Ltd, Ascendas India Development Trust, Ascendas India Growth Programme, all Right Of First Refusal
• 3rd party acquisitions: 2.40m sq ft aVance Business Hub, 1.50m sq ft BlueRidge 2
• Floor area to increase 24% based on committed pipeline
• Favorable conditions in India
• One of the fastest growing major economy in the world with GDP growth estimated at 6.6% in 2016
• India moving up value chain to offer cutting edge product development and R&D hubs for global tech companies
• Highly cost competitive environment - Occupancy costs up to 10 times cheaper than other low-cost sourcing destinations 
• Robust IT-BPM revenue growth - Forecast to achieve 10-12% growth in FY16/17 to US$157-160 billion

Risks

• Investment risks - failure in developing new assets
• Currency risk - INR to SGD
• Interest rate risk
• Refinancing risk - however debt is well spread and debt levels not too high

Sheng Siong

12/4/2017
Accumulate

1. Attractive dividend yield 3.83% and growing consistently
2. Decent valuation PE 23.5 with strong fundamentals - no debt, consistent profitability, stable industry
3. Growth story - expansion into China

Metrics

• Market Cap S$1.47bn, Float 34.41%
• Last done (as of 12/4/2017) S$0.995
• PE 23.5, PB 5.8, EV/EBITDA 15.7
• Dividend yield 3.83%, Dividend CAGR 5.7%, very consistent
• Revenue CAGR 4.5%, Earnings CAGR 8.4%, very consistent
• Total Debt to Equity 0%
• ROE 25.1%, ROA 12.4%

Operations

• Supermarkets - 43 locations all across Singapore as at October 2016
• As of April 2015, the company offers over 400 products under their 10 house-brands
• Extensive distribution network, food-processing facilities, and warehousing facilities
• Currently revenue only from Singapore, but soon to include China

Investment thesis

• Expansion into China - "The Group envisaged that the supermarket in Kunming, China may be operational from 3Q2017" - 4Q2016 report
• The group will continue to expand its store count and improve its current stores through renovation or refitting

Risks

• Increased competition
• Failure to bid for new stores
• Delays in expansion into China
• Increased food prices and the company is unable to pass on higher costs to consumers

Sinostar PEC

12/4/2017
Accumulate - tp 0.36

1. Attractive valuation - PE 7.2, EV/EBITDA 1.161
2. Decent Dividend yield 2.44% and consistent
3. Favorable petrochemical outlook in PRC - shown in Revenues and Earnings
4. Strong fundamentals - low debt, positive cash flow, high cash holdings

Metrics

• Market Cap S$131.2m, Float 45.91%
• Last done (as of 12/4/2017) S$0.205
• PE 7.2, PB 1.023, EV/EBITDA 1.161
• Total Debt to Equity 0.05%
• Dividend yield 2.44%, just started paying, consistent
• ROE 15.5%, ROA 8.8%

Operations

• Downstream petrochemical products - Propylene, LPG, Polypropylene
• Situated within the Zhongyuan Oilfield—one of PRC’s largest oilfields
• Near populous and industrialised provinces such as Shandong, Henan, Anhui, Jiangsu, Shaanxi, Hebei and Zhejiang
• Transportation and Logistics - Subsidiary Dongming Changshun Transport Company Ltd
• Recent acquisition in 2015 - positive contribution that year
• Annual capacity to process 550,000 tonnes of raw LPG and is able to further process part of generated propylene into 50,000 tonnes of polypropylene annually
• Strategic affiliate - Shandong Dongming Petrochem Group, China’s largest independent oil refiner with primary processing capacity of 15 million tons per year

Investment thesis

• "We believe that the demand for LPG is set to rise, buoyed by robust demand from the residential sector" - annual report 2015
• "The Chinese government is looking to ease policies further in light of the slowdown in the market of which likewise extend to invest and further the growth of the petrochemical industry of the state" - annual report 2015
• Turnaround play - Divested from previous operations to specialize in Petrochemical segment. Was loss making but recently turned profitable

Singtel

11/4/2017
Accumulate:

1. Attractive dividend yield 4.5% and stable
2. Singapore defensive stock - Telco sector with strong fundamentals
3. Growth story - developing countries, Cloud and Cyber Security

Metrics

• Market Cap S$63.4bn, Float 50.05%
• Last done (as of 11/4/2017): S$3.88
• PE 16.2, PB 2.33, EV/EBITDA 10.5
• 10 year: Revenue CAGR ~2.4%, Earnings CAGR ~2.4%
• Total Debt to Equity 41.8%
• Dividend yield 4.5%, Dividend CAGR 3.4% and stable
• ROE 14.8%, ROA 3.8%

Operations

• Business segments:
• Group Consumer - Mobile, Broadband, Fibre, Data, Pay-TV
• Group Enterprise - Networks, Smart Cities, Cloud Computing, Cyber Security, Business Mobility, IT Services, Data Centres, Satellite Communications
• 13 Data Centres in Asia Pacific
• 2015 acquisition of Trustwave, the largest independent managed security services provider in North America
• Group Digital Life - Digital Marketing (Amobee), Geoanalytics (Dataspark), Accessing Innovation (Innov8), Mobile Video Streaming (HOOQ)
• Ownership companies: 
• 33% Airtel - #1 in India, 24% market share, has business in Africa
• 100% Singtel - #1 in Singapore, 50% mobile market share, 76% broadband market share
• 47% Globe - #2 in Philippines, 46% market share
• 23% AIS - #1 in Thailand, 47% market share
• 35% Telkomsel - #1 in Indonesia, 48% market share
• 100% Optus - #2 in Australia, 30% market share
• Net profit: Australia 24%, Singapore 29%, 47% Rest of world

Growth story

• Growth in developing countries mobile usage - India, Thailand, Philippines, Indonesia. Singtel investing heavily to meet rising demand, S$8bn capital expenditure in FY2016
• Cloud computing demand growing - US$175bn in 2015 to US$204bn in 2016
• Cyber security demand growing - US$15bn in 2015 to US$27bn in 2019

Risks

• Highly competitive mobile and broadband market
• Economic, Regulatory, Political risks
• Failure to expand/acquire new businesses

Thaibev

8/4/2017
Accumulate:

• Attractive valuation - PE 21.7 for stable and growing consumer staple business
• Established brands and market share 
• Attractive dividend yield 3.44% and growing consistently
• Clear vision growth strategy - growing and ample cash for acquisitions

Metrics

• Market cap S$23.6bil, Float 28.8%
• Last done (as of 8/4/2017): S$0.94
• PE 21.7, PB 4.7, EV/EBITDA 16.6
• Revenue CAGR ~5%, Earnings CAGR ~10%
• Total Debt to Equity ~31%
• Dividend yield 3.44%, Dividend CAGR ~17%
• ROE 16%, ROA 10%

Operations

• Business segments: Spirits (55%), beer (32%), non-alcoholic beverage (9%), and food (4%)
• Core products: “Ruangkhao”, “Hongthong”, “Blend 285”, “Chang” beer, “est” soft drinks, “Oishi” green tea, and “100PLUS”
• Oishi food: Japanese restaurant and ready-to-cook and ready-to-eat food
• Revenue: 96% Thailand, Rest international
• Thailand market share: Beer >40%, Spirits >90%

Investment thesis

• Established and strong market share in Thailand - Spirits and beer
• Vision: The company's target is to have more than 50% revenue contribution from non-alcohol beverages by 2020 and more than 50% of sales from overseas. Therefore we could see many more M&A deals
• Resilient demand for Spirits, even in poor economic conditions
• Chang beer re-branding might gain more market share
• Bottle change from brown to green - more premium look
• Keep only Chang Classic
• Alcohol level drop from 6 to 5.5% - easier to drink
• "Brew the friendship" slogan
• Selling price increased to same level as competitor

Risks

• Hikes in excise tax and production costs
• Competition
• Beers main competitor - Boonrawd: Leo Brand
• Strong competition in non-alcoholic beverage segment

First REIT

31/3/2017
Accumulate:

• Strong DPU growth - CAGR 14.5%
• Attractive dividend yield 6.6%
• Strong fundamentals - 100% occupancy, WALE 10-15 years, healthcare assets
• Strong growth story - pipeline, future aims, and AEIs

Metrics

• Last done (as of 31/3/2017): S$1.31
• AUM: S$1.273bil, CAGR 16.4%
• Debt: Gearing 31.1%, 70% debt maturing by 2018, 92.3% fixed, Cost of debt 3.67%-4.23%, SGD
• Occupancy: 100%, WALE 10-15 years, earliest rental renewal in 2021
• NAV: S$1.01, PNAV 1.267
• Dividend: 2016 DPU S$0.0847, Dividend yield ~6.6%, CAGR 14.5%
• NPI CAGR 16%

Operations

• Healthcare REIT
• 18 assets - Indonesia: 11 hospitals, 1 integrated hospital & mall, 1 integrated hotel & hospital and 1 hotel & country club • Singapore: 3 nursing homes • South Korea: 1 hospital
• Indonesia property rental forex volatility mitigated by pegging base rent to SGD
• South Korea property rental: USD
• Sponsor Lippo Karawaci - Right of First Refusal (have choice to accept or refuse before 3rd party candidates)

Investment thesis

• 43 hospitals in the pipeline
• Aim to scale-up to US$3.5 billion in 5 years
• 2 potential Asset Enhancement Initiatives (AEIs)
• Healthy gearing to make acquisitions

Risks

• Changes in interest rate environment affecting cost of debt
• Delay in pipeline
• Sponsor - uncertain plans to “shift their 2 REIT listings in Singapore to Indonesia”. The rationale for the move is to benefit from tax breaks offered by Jakarta. However analyst view it as unlikely

Tianjin Zhongxin Pharmaceutical Group

31/3/2017
Accumulate:

1. Attractive valuation PE ~12 for level of growth
2. Decent dividend yield ~3.5%
3. Established TCM business in China with strong products, coupled with Western Pharma exposure

Metrics

• Last done (as of 31/3/2017): S$0.99
• PE ~12, PB ~1.33
• Revenue CAGR ~10%, Earnings CAGR ~12%
• Total Debt to Equity 13.66%
• Dividend yield 3.5%, Dividend CAGR ~8%
• ROE 13.4%, ROA 7.9%

Operations

• Traditional China medicine focused manufacturer and developer - 60% TCM and 30% western pharmaceutical products through cooperation with foreign companies
• Owns 560 varieties of preparations in 17 types, 587 certificates of approval for preparations, and 9 certificates of approval for crude drugs. Among them, 4 Chinese medicines have been honored as National Treasure-like creations
• Products have also been exported to more than 30 countries
• R&D focused - The Company completed application of 38 invention patents, 9 utility model patents and 9 exterior design patents during the year and 11 invention patents were approved in the year 2015

Growth story

• No concrete growth strategy stated other than more medicinal innovation

Risks

• RMB depreciation - profits in RMB
• Products lose demand, competition etc.
• Western pharmaceutical segment affected by geopolitical factors 

800 Super

31/3/2017
Accumulate:

1. Attractive valuation PE 10.72 for level of growth and stable industry
2. Decent dividend yield ~2.9%
3. Some levels of regional expansion
4. New waste to energy plan to generate more revenue streams

Metrics

• Last done (as of 31/3/2017): S$1.205
• PE 10.72 (low for growth), PB 2.9
• Revenue CAGR ~12%, Earnings CAGR ~23%
• Total Debt to Equity 65%
• Dividend yield ~2.9% (decent), Dividend CAGR ~35%
• ROE 26.2%, ROA 12.7%

Operations

• Waste management (waste collection and recycling services), cleaning and conservancy and horticultural services
• Re-awarded a public waste collection contract for a period of 7 years and 9 months commencing from 1 January 2014 to provide waste collection services for the residential and trade premises in the Ang Mo Kio – Toa Payoh sector

Investment thesis

• Upon its targeted completion in 2017, the Waste to energy plant at the Tuas South leasehold land is expected to generate new revenue streams and cost savings for the Group
• Successfully expanded our business footprint regionally with the establishment of a plastic recycling subsidiary in Batam, Indonesia
• "Strategic direction towards downstream waste treatment will create growth opportunities for 800 Super in the long haul" - value chain processing of waste into final product

Risks

• Competition stealing business
• Failure to execute expansion plans, or lack of further expansion plans

Isoteam

29/3/2017
Accumulate:

• Attractive valuation PE 12.47 for high growth
• Favorable macro factors - Singapore government infrastructure initiatives
• Potential growth - expansion into Myanmar, Malaysia and other countries

Metrics

• Last done (as of 29/3/2017): S$0.40
• PE 12.47 (cheap for growth), PB 2.06
• Revenue CAGR ~21%, Earnings CAGR ~25%
• Total Debt to Equity 16.49%
• Dividend yield 1.9%, Dividend CAGR ~10%
• ROE 18.49%, 11.27%

Operations

• Building maintenance and estate upgrading - Repairs & Redecoration, Addition & Alteration, complementary niche specialist services, Eco-conscious solutions
• Industry leader with 19- year track record
• Growing order book

Growth story

• Singapore government initiatives - Ongoing rejuvenation of mature and middle aged estates
• 80% of buildings to be Green Marked by 2030
• Expanding into Myanmar (won 4 contracts in 2016) and Malaysia
• Expand R&R and A&A services into untapped sectors in Singapore - educational institutions, army camps, industrial
• Renewable energy - Grow renewable energy installation business in Singapore (Solar panels and hydrogen fuel cells)

Risks

• Projects lost, competition, failure to execute growth plans

Singapore Large Cap Stocks

Market cap > S$5 bil

1. Hong Kong Land USD
2. ComfortDelgro
3. CapitaLand
4. ThaiBev
5. ST Engineering
6. DBS
7. Keppel Corp

ISEC Healthcare

28/3/2017
Accumulate:

1. Relatively attractive valuation PE 22.5 with high growth
2. Growth story - acquisitions and sector growth
3. Attractive dividend yield 3.36% and growing

Metrics

• Last done (as of 28/3/2017): S$0.295
• PE 22.5, PB 2.51
• Revenue CAGR ~15%, Earnings CAGR ~28%
• Debt to Equity 0%
• Dividend yield 3.36%, Dividend CAGR ~110%
• ROE 11.42%, ROA 10.47%

Operations

• Specialist medical eye care services with 19 specialist doctors at 4 locations in Malaysia and Singapore
• In 2013 ISEC KL performed over 5,000 major surgeries and served more than 70,000 patients

Growth story

• ISEC has proposed the acquisition of JL Medical, a group of four GP and aesthetic clinics in Singapore. ISEC is expanding into complementary specialties. Valued at SGD13.9m or just 12x P/E, this will be an EPS-accretive deal
• ISEC has a global M&A pipeline, Indonesia, Taiwan, Vietnam, Cambodia and China
• Key sector drivers: ageing population, increasing awareness, rising income level, increase in private insurance coverage

Risks

• Acquisitions delay or do not materialize
• Further MYR depreciation against SGD

China Aviation Oil

28/3/2017
Buy - tp 2.00

1. Attractive valuation: PE 10.31
2. Strong growth story - aviation industry, China, potential acquisitions with cash
3. Competitive advantage - sole supplier in China and growing global presence

Metrics

• Last Done (as of 28/3/2017): S$1.50
• PE 10.31, PB 1.41
• Total Debt to Equity 15.39%
• Dividend yield ~2%, consistent through tough times and growing
• ROE 14.31%, ROA 8.12%

Operations

• Jet fuel supply and trading
• Largest physical jet fuel trader in the Asia Pacific region
• Sole supplier of imported jet fuel to the civil aviation industry of the People’s Republic of China (17 airports)
• Supply jet fuel to airline companies in Asia Pacific, North America, Europe and the Middle East (38 airports)

• International trading of jet fuel and other oil products
• Fuel oil, gas oil and aviation gas
• Acquisitions of oil related assets

Revenue: 51% China, Rest 49%

Growth story

• Competitive advantage in the Chinese civil aviation market
• China is set to be the world’s largest civil aviation market by the 2030s - CAAC
• China’s “One Belt, One Road” initiative
• Under China’s 13th Five-Year Plan, CAAC targets to have 260 airports in China
• Associate companies catering to other countries - leading global presence
• Growing cash hoard - ripe for acquisitions

Risks

• Macroeconomic uncertainties - Oversupply of oil, depressed oil prices, volatilities in financial markets and geopolitical uncertainties

Singapore Mid Cap Stocks

From 500mil to 5bil market cap:

1. Venture Corp
2. China Aviation
3. Sheng Siong
4. Haw Par
5. SATS
6. Singapore Post
7. YZJ Shipbuilding SGD

Viva Industrial Trust

27/3/2017
Accumulate:

1. Strong fundamentals - NPI CAGR, Steady dividend growth, strong occupancy
2. Attractive dividend yield 8.9%
3. Limited supply of new business parks - Positive rental reversions expectations
4. Strong diversified tenants

Metrics

Last Done (as of 27/3/2017): S$0.785

AUM: S$1.25 billion - smaller so cost of debt higher

Debt: Gearing 39.4% (a bit high), WADM 3.2 years (ok), 89.9% fixed, Cost of debt 4% (high), SGD

Occupancy: 89.8% (not bad), WALE 3.1 years (average)

NAV: S$0.791, PNAV 0.99 (a bit high)

Dividend: 2016 DPU S$0.07002, Dividend yield 8.9% (high), CAGR ~1.7%

NPI: CAGR ~44%

Operations

Industrial REIT - 9 properties in Singapore

2 Integrated Business Parks, 3 Warehouses and 4 Light Industrial Factories

Diversified trade sectors

Total of 143 tenants, of which 42.5% of tenants are in information technology, e-business
or data centre operations
65.9% of tenants are multinational corporations or government-linked corporations

Growth story

Limited Supply of New Business Parks
Completion of yield accretive acquisition of 6 Chin Bee Avenue taps on the strong potential of Singapore’s growing and recession-resilient food services sector
Build pipeline of yield accretive acquisitions in Singapore and overseas
Asset enhancements

Risks

Limited debt headroom - Gearing 39.4%

Expiry of rental support at UE Bizhub East - Dividend yield may only be 8.4%

Non-renewal of tenants

CapitaLand Retail China Trust

27/3/2017
Accumulate:

1. Cheap valuation - PNAV 0.87, Dividend yield 7%
2. Strong fundamentals - Occupancy, Gearing, NPI
3. China economic growth

Metrics

Last Done (as of 27/3/2017): S$1.435
AUM: S$2.54 billion
Debt: Gearing 35.3%, WADM 1.84 years, 87.5% fixed, Cost of debt 2.81%, 93.9% SGD
Occupancy: 95.9%, WALE 5 years
NAV: S$1.65, PNAV 0.87
Dividend: 2016 DPU S$0.1005, Dividend yield 7%, CAGR ~1%
NPI: CAGR ~7%
DRP offered

Operations

Retail REIT: 11 Shopping malls
China, Hong Kong and Macau

Growth story

FY 2016 China GDP grew 6.7%* y-o-y
Chinese Academy of Social Sciences expected FY 2017 GDP at 6.5%
FY 2016 urban disposable income and expenditure increased 5.6%* and 5.7%* y-o-y respectively
Continue to seek acquisition opportunities to strengthen CRCT’s portfolio

Risks

SGDRMB - Strengthening of SGD will affect DPU received in RMB
Change in property tax basis for Beijing malls increased tax expenses

Lippo Malls Indonesia Retail Trust

26/3/2017
Accumulate:

1. Strong fundamentals - price a bit high but justified by DPU CAGR 2% qoq
2. Favorable Indonesian economy
3. Attractive dividend yield - 8.6%
4. Potential future acquisitions - low debt

Metrics

Last Done (as of 26/3/2017): S$0.395
AUM: S$1,949.4 million
Debt: Gearing 31.5%, WADM 2.59 years, 19.2% expiring in 2017, 70% fixed, Cost of debt 4-7%, SGD
Occupancy: 94.3%, WALE 4.51 years, 23% of leases expiring in 2017
NAV: S$0.39, PNAV 1.01
Dividend: 2016 DPU: S$0.0341, Dividend yield: 8.6%, CAGR 2% qoq
NPI: CAGR 7.68%

Operations

20 retail malls and 7 retail spaces across Indonesia
Diversified trade mix
Top 10 tenants contribute approximately 22% of Portfolio’s Gross Rental Income
Top tenant 9.5% of gross rental income

Growth story

Favorable Indonesian economy, tax amnesty could increase money flow into economy
Low debt allows for acquisitions
IDR/SGD might have bottomed

Risks

IDR/SGD could decline more
Income support from acquisition of Kemang Mall. Yield would only be 7% without income support
Short land leases - land leases that average 17 years

Singapore Small Cap Stocks

Up to 500mil market cap

1. Colex
2. CEI
3. CNMC Goldmine
4. Amara
5. ISEC Healthcare
6. Fischer Tech
7. China Sunsine
8. Micro-Mechanics
9. Nordic 
10. Duty Free International
11. Cogent
12. 800 Super
13. Isoteam
14. Dutech
15. Sinostar PEC