February 2015

27 February 2015
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Results Announcement

  • 3 Feb 15 : SIAEC (Q315) – EPS 4.13ct vs 5.43ct (Q314) / 12.67ct (9M15) vs 18.03ct (9M14)
  • 4 Feb 15 : SATS (Q315) – EPS 4.3ct vs 3.8ct (Q314) / 12.9ct (9M15) vs 12.3ct (9M14)
  • 4 Feb 15 : SingPost (Q315) – EPS 1.794ct vs 1.873ct (Q114) / 5.228ct (9M15) vs 5.327ct (9M14) ; Div 1.25ct (no change)
  • 10 Feb 15 : SBSTransit (Q414) – EPS 0.08ct vs 0.53ct (Q413) / 4.62ct (FY14) vs 3.62ct (FY13) ; Div 1.05ct vs 0.9ct (2H13) / 2.3ct (FY14) vs 1.8ct (FY13)
  • 11 Feb 15 : ComfortDelgro (Q414) – EPS 2.98ct vs 2.82ct (Q413) / 13.29ct (FY14) vs 12.43ct (FY13) ; Div 4.5ct vs 4ct (2H13) / 8.25ct (FY14) vs 7ct (FY13)
  • 12 Feb 15 (AM) : Singtel (Q315) – EPS 6.09ct vs 5.47ct (Q314) / 17.84ct (9M15) vs 17.28ct (9M14)
  • 25 Feb 15 : Starhub (Q414) – EPS 5.5ct vs 5ct (Q413 – restated) / 21.5ct (FY14) vs 22.1ct (FY13 – restated) ; Div 5ct (no change) ; 20ct (FY14 – No Change)
  • 26 Feb 15 : HLFin (FY14) – EPS 14.17ct vs 15.85ct (FY13) ; Div 6ct (2H14) vs 8ct (2H13) / 10ct (FY14) vs 12ct (FY13)
  • 27 Feb 15 (AM) : STEng (Q414) – EPS 4.48ct vs 5.37ct (Q413) / 17.06ct (FY14) vs 18.73ct (FY13) ; Div 4ct (Final) + 7ct (Special) vs 4ct+8ct (2H13) / 15ct (FY14) – No Change

 
 

 
 

STI = 3402.86 (-23.32)

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

Hong Leong Fin

FY14 (Dec)

14.17

10.00

$2.620

3.817%

18.49

Interim 4ct ; Final 6ct

SGX

FY14 (Jun)

30

28

$8.180

3.423%

27.27

Q1, Q2, Q3 4ct ; Q4 4ct +12ct

SingPost

FY14 (Mar)

6.746

6.25

$2.000

3.125%

29.65

Q1, Q2, Q3 1.25ct ; Q4 2.5ct

SPH

FY14 (Aug)

25

21

$4.090

5.134%

16.36

Interim 7ct ; Final 8ct + Special 6ct

Note : SGX Added from May-14 ; Q4 Variable Div Depends on FY EPS


Aviation Services

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

SATS

FY14 (Mar)

16.10

13.0

$3.160

4.114%

19.63

Interim 5ct ; Final 8ct

SIA Engineering

FY14 (Mar)

23.88

25.0

$4.250

5.882%

17.80

Interim 7ct ; Final 13ct + Special 5ct

ST Engineering

FY13 (Dec)

18.73

15.0

$3.510

4.274%

20.57

Interim 3ct ; Final 4ct + Special 8ct

Note : SIAEC Special Div is Observed to be Non-Recurring (Depends on Excess Cash)


Transport

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

SBSTransit

FY14 (Dec)

4.62

2.30

$1.830

1.257%

39.61

Interim 1.25ctct ; Final 1.05ct

ComfortDelGro

FY14 (Dec)

13.29

8.25

$2.940

2.806%

22.12

Interim 3.75ct ; Final 4.5ct

SMRT

FY14 (Mar)

4.10

2.20

$1.740

1.264%

42.44

Interim 1.0ct ; Final 1.2ct




TELCO

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

SingTel

FY14 (Mar)

22.92

16.8

$4.220

3.981%

18.41

Interim 6.8ct ; Final 10ct

M1

FY14 (Dec)

18.9

18.9

$3.960

4.773%

20.95

Interim 7ct ; Final 11.9ct

StarHub

FY14 (Dec)

21.50

20

$4.290

4.662%

19.95

Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct




Infrastructure

Stock

Period

DPS cts

Mkt

Yield

NAV

Div Breakdown

AusNet Services

1H – Sep14

A4.18 (Gross)

$1.530

5.802%

A$0.86

1H15 A4.18ct ; 2H14 A4.18ct

* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.0619) fm Yahoo

NOTES :

  • Mkt Price is as on 27-Feb-15
  • ST Engg : 2H14 (Dec) – 4ct (Final) + 7ct (Special) ; 1H14 (Jun) – 4ct / Payout = 88% (Not Reduced to 75% altho’ guided in Annc During FY13 Results)
  • HLFin : 2H14 (Dec) – 6ct ; 1H14 (Jun) – 4ct
  • StarHub : Q414 (Dec) – 5ct ; Q314 (Sep) – 5ct ; Q214 (Jun) – 5ct ; Q114 (Mar) – 5ct
  • StarHub : FY15 Div Guidance – 5ct/Q
  • M1 : 2H14 (Dec) – Final 11.9ct ; 1H14 (Jun) – Interim 7ct
  • SATSvcs : 1H15 (Sep14) – Interim 5ct
  • SingTel : 1H15 (Sep14) – Interim 6.8ct
  • AusNet : 1H15 (Sep14) – A4.18ct = A2.2ct (Franked) + A1.98ct (Interest – Subject to 10% Tax) ; 2H14 (Mar14) – A4.18ct = A1.393ct (Franked) + A2.379ct (Interest – Subject to 10% Tax) + A0.408ct (Capital Returns)
  • SingPost : Q215 (Sep14) – 1.25ct ; Q115 (Jun14) – 1.25ct
  • SIAEC : 1H15 (Sep14) – Interim 6ct
  • SMRT : 1H15 (Sep14) – Interim 1.5ct
  • SGX : Q115 (Sep14) – 4ct
  • SPH : 2H14 (Aug) – Final 8ct + Special 6ct ; 1H14 (Feb) – Interim 7ct
  • ComfortDelgro : 1H14 (Jun) –3.5ct
  • SBSTransit : 1H14 (Jun) – 1.25ct
  • SPAus : FY15 Guidance = A8.36ct Gross
  • ST Engg : Dividend Payout Reduced from 90% to 80% for FY13 & Will Be Further Reduced to 75% from FY14
  • SingTel : Div Policy – 60% to 75% of Underlying Net Profit
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SATS – OCBC

5 February 2015
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Cost management start to yield results

  • Results above expectations
  • Cost management still a key focus\
  • Increase FV; maintain HOLD

3QFY15 PATMI jumped 25.2% YoY to S$53.7m

SATS reported a good set of 3QFY15 results on the back of disciplined cost management and favourable business mix which pushed up overall operating margins. While revenue declined 3.2% YoY to S$450.7m, PATMI saw a 25.2% jump to S$53.7m. The lower revenue is largely attributable to the weaker result from its Japan subsidiary, TFK, resulting in a 7.2% YoY drop in its 3QFY15 Food Solutions (FS) segment revenue. Gateway Services (GS) 3QFY15 revenue, however, saw a 3.5% increase as SATS continue to gain market share in cargo handling business in Singapore. The shift in business mix away from FS segment resulted in a 13.1% drop in 3QFY15 raw materials expenses. Lower staff costs also helped improve profitability. SATS 9MFY15 PATMI came in above expectations with a 4.6% YoY increase, as it formed 79.6% and 78.4% of the street and our FY15 forecasts.

Cost management a key focus amid challenging outlook

Management reiterated strategy is still to focus on managing costs and improving productivity, which include a dynamic roster system, and investing in technology to increase operating leverage through automation, which requires fewer employees and hence lower staff expenses. Also, with the FS segment revenue declining on higher LCCs’ flight cancellations, the expected shift in business mix towards more cargo handling of higher margins (which makes up ~33% of GS segment revenue) is likely to continue, especially for pharmaceutical cargos. In addition, while share of profits from overseas GS associated/JV companies is likely to continue to face volume and price pressures, we expect lower energy costs and FS segment account rationalisation to improve profitability. We also expect TFK’s revenue to still be muted due to overcapacity of caterers in Narita Airport.

Decent dividend expected; maintain HOLD

We continue to think SATS will maintain a decent level of dividend pay-out (~90%). Incorporating 3QFY15 results and the above factors, our FY15/16F forecasts increase by 5.1% and 5.7%, respectively. Based on 16.5x FY16F PER (5-year mean), our FV increases to S$2.98 (previous: S$2.92). Maintain HOLD.

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Singpost – OCBC

5 February 2015
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Still on the lookout for growth

  • No surprises in results
  • Still exploring investment opportunities
  • To redevelop retail space in SPC

Results in line

Singapore Post (SingPost) reported a 7.6% YoY rise in revenue to S$239.6m and a 7.3% increase in net profit to S$42.2m in 3QFY15, such that 9MFY15 revenue and net profit accounted for 75% and 77% of our full year estimates, respectively. Mail revenue fell 2.3% YoY to S$130.1m in 3QFY15, due to lower contributions from domestic and international mail; this despite a postage rate hike from Oct last year. Logistics revenue increased 20.7% YoY to S$122.1m, aided by positive contributions from new acquisitions. We understand that if the impact of the acquisitions were excluded, segment revenue would have been relatively flat. Retail & eCommerce saw a 1.3% rise in revenue in the quarter to S$22.9m.

Mail remains challenging

In the quarter, domestic mail revenue fell 1.7% YoY while international mail revenue declined 2.7% as the transshipment business becomes increasingly competitive with more commercial operators in the region. In the face of such competition, the group decided not to sacrifice margins for the sake of revenue. Meanwhile, Singapore, which is classified as an industrialized country by the Universal Postal Union, pays higher Terminal Dues (TDs) or settlement rates for delivery of outbound mail at country of destination. TDs have increased by up to 42.6% over the past years, and have been weighing on the international mail business.

To continue exploring opportunities

Looking ahead, the group plans to continue exploring investment opportunities in Asia Pacific as part of its growth strategy. It has been expanding its end-to-end eCommerce logistics solutions network in the region and investing in eCommerce logistics infrastructure, technology and capabilities. Meanwhile, SingPost also announced that it intends to redevelop the retail space in Singapore Post Centre. However details are scarce for now as the group has so far only appointed consultants to advise on such redevelopment. Rolling forward our valuations, our fair value estimate rises slightly from S$2.17 to S$2.19. Maintain BUY.

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