October 2014

30 October 2014
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Results Announcement

  • 15 Oct 14 : SPH (FY14) – EPS 25ct vs 2ct (FY13) ; Div 14ct (Final 8ct + Special 6ct) vs 15ct (2H13)
  • 16 Oct 14 : M1 (Q314) – EPS 4.8ct vs 4.3ct (Q313)
  • 21 Oct 14 : SGX (Q115) – EPS 7.3ct v 8.63ct (Q114) ; Div 4ct (No Change)
  • 31 Oct 14 : SMRT
  • 4 Nov 14 : SIAEC
  • 5 Nov 14 : Starhub
  • 7 Nov 14 (AM) : STEng
  • 7 Nov 14 : HLFin
  • 12 Nov 14 : SBSTransit
  • 13 Nov 14 (AM) : Singtel
  • 13 Nov 14 : ComfortDelgro
  • 13 Nov 14 : SATS

 

 

STI = 3234.31 (+10.28)

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

Hong Leong Fin

FY13 (Dec)

15.85

12.00

$2.590

4.633%

16.34

Interim 4ct ; Final 8ct

SGX

FY14 (Jun)

30

28

$6.970

4.017%

23.23

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

SingPost

FY14 (Mar)

6.746

6.25

$1.975

3.165%

29.28

Q1, Q2, Q3 1.25ct ; Q4 2.5ct

SPH

FY14 (Aug)

25

21

$4.250

4.941%

17.00

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

$3.110

4.180%

19.32

Interim 5ct ; Final 8ct

SIA Engineering

FY14 (Mar)

23.88

25.0

$4.720

5.297%

19.77

Interim 7ct ; Final 13ct + Special 5ct

ST Engineering

FY13 (Dec)

18.73

15.0

$3.710

4.043%

19.81

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

FY13 (Dec)

3.62

1.80

$1.640

1.098%

45.30

Interim 0.9ct ; Final 0.9ct

ComfortDelGro

FY13 (Dec)

12.43

7.00

$2.520

2.778%

20.27

Interim 3ct ; Final 4ct

SMRT

FY14 (Mar)

4.10

2.20

$1.465

1.502%

35.73

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

$3.740

4.492%

16.32

Interim 6.8ct ; Final 10ct

M1

FY13 (Dec)

17.4

21

$3.490

6.017%

20.06

Interim 6.8ct ; Final 7.1ct + Special 7.1ct

StarHub

FY13 (Dec)

21.50

20

$4.140

4.831%

19.26

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




Infrastructure

Stock

Period

DPS cts

Mkt

Yield

NAV

Div Breakdown

AusNet Services

2H – Mar14

A4.18 (Gross)

$1.505

6.242%

A$0.90

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

* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.1237) fm Yahoo

NOTES :

  • Mkt Price is as on 30-Oct-14
  • SPH : 2H14 (Aug) – Final 8ct + Special 6ct ; 1H14 (Feb) – Interim 7ct
  • ComfortDelgro : Q214 (Jun) –3.5ct
  • ST Engg : 1H14 (Jun) – 4ct
  • SBSTransit : Q214 (Jun) – 1.25ct
  • HLFin : 1H14 (Jun) – 4ct
  • SGX : Q414 (Jun14) – 4ct+ 12ct ; Q314 (Mar14) – 4ct ; Q214 (Dec13) – 4ct ; Q114 (Sep13) – 4ct
  • M1 : 1H14 (Jun) – Interim 7ct
  • SPAus : FY15 Guidance = A8.36ct Gross
  • SPAus : 2H14 (Mar14) – A4.18ct = A1.393ct (Franked) + A2.379ct (Interest – Subject to 10% Tax) + A0.408ct (Capital Returns) ; 1H14 (Sep13) – A4.18ct = A1.393ct (Franked) + A2.396ct (Interest – Subject to 10% Tax) + A0.391ct (Capital Returns)
  • SingTel : 2H14 (Mar14) – Interim 10ct ; 1H14 (Sep13) – Interim 6.8ct
  • StarHub : Q114 (Mar) – 5ct
  • SIAEC : Q414 (Mar14) – Final 13ct + Special 5ct ; Q214 (Sep13) – Interim 7ct
  • SMRT : Q414 (Mar14) – Interim 1.2ct ; Q214 (Sep13) – Interim 1ct
  • ST Engg : Dividend Payout Reduced from 90% to 80% for FY13 & Will Be Further Reduced to 75% from FY14
  • StarHub : FY14 Div Guidance – 5ct/Q
  • SingPost : Q314 (Dec13) – 1.25ct ; Q214 (Sep13) – 1.25ct ; Q114 (Jun13) – 1.25ct
  • SATSvcs : 1H14 (Sep13) – Interim 5ct
  • SingTel : Div Policy – 60% to 75% of Underlying Net Profit
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SPH – OSK DMG

16 October 2014
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Print Business Loses Its Edge

SPH announced full-year revenue of SGD1.22bn (-2.0% YoY) and PATMI of SGD404.3m (-6.2% YoY), broadly in line with our estimates. We see weakness in its core business as companies switch to online advertising from its traditional advertising platform. We keep our SELL call and SOP-based TP remains at SGD3.57 (14.4% downside), premised at 17.0x FY15 P/E and implying 6.2% FY15 dividend yield.

  • Pessimistic outlook for its publishing business. Revenue from SPH’s newspaper and magazine (N&M) segment slid 6.0% YoY to SGD931.7m in FY14 (Aug). This was mainly driven by the decline in its advertising and circulation revenue, which were down 6.8% and 4.9% YoY respectively. We continue to hold a bleak view on its publishing segment as its clients are switching to better and cheaper alternatives to advertise on the internet via social media platforms such as Facebook.
  • SPH REIT (SPHREIT SP, NR) provides a strong and stable income stream. The REIT’s portfolio, consisting of Paragon and Clementi Malls, has proven to be resilient as both assets maintain full occupancy rates. Revenue from SPH’s property segment inched up by 3.5% YoY, underpinned by a positive rental reversion of 8.5% and lower property expenses. Moving forward, we think that the portfolio could continue to provide stable support to its core business.
  • Seletar Mall a near-term catalyst for its property division. In addition to its REIT’s contributions, the new opening of Seletar Mall – which recorded >90% pre-committed leases – in the next quarter could provide an additional income stream for the business. We think that the suburban mall will be able to attract good-quality tenants as residences within the area are underserved by retailers. (Seletar Mall has c.320,000 residences nearby vs Clementi Mall’s c.200,000)
  • Maintain SELL. Despite the expansion in its property division, its core business continues to be a laggard. We maintain our SELL recommendation, while our SOP-based TP remains unchanged at SGD3.57, implying a 17.0x FY15 P/E and a 6.2% FY15 dividend yield.
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SingPost – OCBC

16 October 2014
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CAPITALISING ON REGIONAL E-COMMERCE LOGISTICS

  • E-Commerce growth beyond Alibaba
  • Seeking to be a main stakeholder in value chain
  • Raise growth rate assumptions

Developing a fully integrated eCommerce logistics hub in Singapore

Singapore Post (SingPost) announced last evening that it will be developing a fully integrated regional eCommerce logistics hub to cater to its expanding ecommerce logistics business and the fast-growing ecommerce market. The three storey hub in Tampines LogisPark will be the first of its kind in SE Asia, equipped with state-of-the-art technology. Scheduled to be fully operational in 2H16, the estimated development cost is S$182m, and includes lease of land, construction costs and equipment costs. This will be funded internally from cash.

Capitalising on online retail and logistics solutions

There is room for Singapore’s e-Commerce scene to grow, as the country’s e-commerce sale volume as compared to the total retail market size was remains relatively low. Singapore’s rising importance as a logistics hub is also highlighted by recent investments in warehouse and distribution facilities by DHL and Menlo Logistics. In addition, SingPost, being a postal operator, may be already sitting on a huge amount of data waiting to be monetized. The partnership between postal operators and eretailers may thus extend beyond the posts’ role of enablers of e-Commerce to supporting the e-retailers to expand and grow by analyzing, translating and interpreting data.

Raising growth rate assumptions and fair value estimate

In our 3-stage DCF model, we have forecasted earnings growth of 7-9% for FY15-16, and 16-17% in FY17-18 as SingPost builds up its e-Commerce capabilities and reputation. However, we have also assumed higher working capital requirements and capital expenditure, resulting in a 5-7% growth in free cash flow to equity (FCFE). For FY19-FY23, we increase our FCFE growth rate assumption from 5% to 9%, which is justifiable given 1) the significant growth potential of e-Commerce sales in Singapore and the region, 2) the accompanying rise in logistics services that are required to support this growth 3) the likelihood of SingPost directing its huge cash pile to earnings-accretive investments in the next few years. With this, our fair value estimate rises from S$1.78 to S$2.09. Upgrade to BUY.

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