Month: July 2012
SingPost – OCBC
GOOD 1QFY13 SHOWING
•Good quarterly showing
•Strong financial position
•Seeking acquisition opportunities
1QFY13 results in line with our expectations
Singapore Post (SingPost) reported a 6.5% YoY rise in revenue to S$151.6m but saw a 2.9% fall in net profit to S$38.1m in 1QFY13. Results were in line with our expectations, with net profit accounting for 26.5% of our full year estimates vs 28.1% of the street’s estimate (Bloomberg consensus: S$135.6m). Group operating margin fell from 35.4% in 1QFY12 to 32.2% in 1QFY13 with lower margins in the mail division due to higher business costs and changing product mix.
Higher revenue in most divisions
Mail revenue increased 3.7% to S$100.9m as growth in packages and consolidation of Novation Solutions (acquired in May 2012) offset a slight decline in domestic mail. Logistics revenue rose 11.5% to S$57.1m, driven by higher contributions from e-fulfilment activities in Quantium Solutions and Speedpost. Meanwhile, retail revenue also increased, but rental and property-related income fell by 3.1% due to lower rental income.
Strong financial position
Interest coverage (EBITDA/Interest expense) remained strong at 18.1x in Jun 2012. Operating cash flow was also healthy with a net inflow of S$51.3m in the quarter. SingPost remained in a net cash position of S$161.4m pending the use of funds raised earlier for investment opportunities. According to management, the group continues to explore acquisition opportunities to accelerate its transformation (e.g. new revenue contributors in the digital services and e-commerce businesses, and growth in regional logistics and efulfilment).
Consistent dividends prized in an uncertain environment
Amidst the uncertain environment for investors, we believe that the defensiveness of SingPost’s businesses and its consistently decent dividends translates to a favourable risk-reward ratio for equity investors. In line with its usual practice, SingPost has declared an interim dividend of 1.25 S cents per share, which will be paid on 31 Aug 2012. Maintain BUY with S$1.14 fair value estimate.
July 2012
Results Announcement
- 13 Jul 12 : SPH (Q312) – EPS 6ct (todate 17ct)
- 16 Jul 12 : M1 (Q212) – EPS 3.9ct (todate 8.3ct) ; Div 6.6ct
- 24 Jul 12 : SIAEC (Q113) – EPS 6.38ct
- 25 Jul 12 : SATS (Q113) – EPS 3.7ct
- 27 Jul 12 : SMRT (Q113) – EPS 2.4ct
- 8 Aug 12 (AM) : MIIF
- 8 Aug 12 : StarHub (Q212)
- 10 Aug 12 : SBSTransit (Q212)
- 13 Aug 12 : ComfortDelgro (Q212)
- 14 Aug 12 (AM) : SingTel (Q112)
- 14 Aug 12 : STEng (Q212)
STI = 3036.40 (+3.60)
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
HL Fin |
FY11 (Dec) |
22.65 |
12.00 |
$2.410 |
4.979% |
10.64 |
Interim 4ct ; Final 8ct |
|
SingPost |
FY12 (Mar) |
7.407 |
6.25 |
$1.050 |
5.952% |
14.18 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
|
SPH |
FY11 (Aug) |
24 |
24.0 |
$4.110 |
5.839% |
17.13 |
Interim 7ct ; Final 9ct + Special 8ct |
Aviation Services
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SATS |
FY12 (Mar) |
15.40 |
26.0 |
$2.580 |
10.078% |
16.75 |
Interim 5ct ; Final 6ct + Special 15ct |
|
SIA Engg |
FY12 (Mar) |
24.56 |
21.0 |
$4.080 |
5.147% |
16.61 |
Interim 6ct ; Final 15ct |
|
ST Engg |
FY11 (Dec) |
17.28 |
15.5 |
$3.300 |
4.697% |
19.10 |
Interim 3ct ; Final 4ct + Special 8.5ct |
Note : SATS Special Div is Observed to be Non-Recurring
Transport
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SBSTransit |
FY11 (Dec) |
11.89 |
5.90 |
$1.540 |
3.831% |
12.95 |
Interim 3.1ct ; Final 2.8ct |
|
ComfortDelGro |
FY11 (Dec) |
11.27 |
6.00 |
$1.680 |
3.571% |
14.91 |
Interim 2.7ct ; Final 3.3ct |
|
SMRT |
FY12 (Mar) |
7.9 |
7.45 |
$1.630 |
4.571% |
20.63 |
Interim 1.75ct ; Final 5.7ct |
TELCO
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SingTel |
FY12 (Mar) |
25.04 |
15.8 |
$3.580 |
4.413% |
14.30 |
Interim 6.8ct ; Final 9ct |
|
M1 |
FY11 (Dec) |
18.1 |
14.5 |
$2.530 |
5.731% |
13.98 |
Interim 6.6ct ; Final 7.9ct |
|
StarHub |
FY11 (Dec) |
18.40 |
20 |
$3.840 |
5.208% |
20.87 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
|
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
|
SPAus |
2H – Mar12 |
A4.0 (Gross) |
$1.380 |
7.593% |
A$0.88 |
2H12 A4.0ct ; 1H12 A4.0ct |
|
MIIF |
2H – Dec11 |
2.75 |
$0.545 |
10.092% |
$0.820 |
1H11 2.75ct ; 2H11 2.75ct |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.3098) fm Yahoo
NOTES :
- Mkt Price is as on 31-Jul-12
- SPAus : 2H12 (Mar12) – A4ct = A1.333ct (Franked) + A2.159ct (Interest) + A0.508ct (Capital Returns) ; FY12 Guidance = A8.2ct ; 3-for-20 @ S$1.25 (A$1)
- SATSvcs : Q412 (Mar12) – Final 6ct + Special 15ct ; Q212 (Sep11) – Interim 5ct
- SingTel : 2H12 (Mar12) – Final 9ct ; 1H12 (Sep11) – Interim 6.8ct ; Includes Exceptional Net Tax Credit S$270M
- SIAEC : Q412 (Mar12) – Final 15ct ; Q212 (Sep11) – Interim 6ct
- StarHub : Q112 (Mar) – 5ct
- SMRT : Q412 (Mar12) – Final 5.7ct ; Q212 (Sep11) – Interim 1.75ct
- SingPost : Q412 (Mar12) – 2.5ct ; Q312 (Dec11) – 1.25ct ; Q212 (Sep11) – 1.25ct ; Q112 (Jun11) – 1.25ct
- SPH : 1H12 (Feb) – 7ct
- ST Engg : 1H11 (Jun) – 3ct ; 2H11 (Dec) – 4ct (Final) + 8.5ct (Special)
- MIIF : 1H11 (Jun) – 2.75ct ; 2H11 (Dec) – 2.75ct
- ComfortDelgro : Q411 (Dec) – 3.3ct ; Q211 (Jun) – 2.7ct
- SBSTransit : Q411 (Dec) – 2.8ct ; Q211 (Jun) – 3.1ct
- StarHub : FY12 Div Guidance – 5ct/Q
- M1 : 2H11 (Dec) – Final 7.9ct ; 1H11 (Jun) – Interim 6.6ct
July 2012
Results Announcement
- 13 Jul 12 : SPH (Q312) – EPS 6ct (todate 17ct)
- 16 Jul 12 : M1 (Q212) – EPS 3.9ct (todate 8.3ct) ; Div 6.6ct
- 24 Jul 12 : SIAEC (Q113) – EPS 6.38ct
- 25 Jul 12 : SATS (Q113) – EPS 3.7ct
- 27 Jul 12 : SMRT (Q113) – EPS 2.4ct
- 8 Aug 12 (AM) : MIIF
- 8 Aug 12 : StarHub (Q212)
- 10 Aug 12 : SBSTransit (Q212)
- 13 Aug 12 : ComfortDelgro (Q212)
- 14 Aug 12 (AM) : SingTel (Q112)
- 14 Aug 12 : STEng (Q212)
STI = 3036.40 (+3.60)
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
HL Fin |
FY11 (Dec) |
22.65 |
12.00 |
$2.410 |
4.979% |
10.64 |
Interim 4ct ; Final 8ct |
|
SingPost |
FY12 (Mar) |
7.407 |
6.25 |
$1.050 |
5.952% |
14.18 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
|
SPH |
FY11 (Aug) |
24 |
24.0 |
$4.110 |
5.839% |
17.13 |
Interim 7ct ; Final 9ct + Special 8ct |
Aviation Services
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SATS |
FY12 (Mar) |
15.40 |
26.0 |
$2.580 |
10.078% |
16.75 |
Interim 5ct ; Final 6ct + Special 15ct |
|
SIA Engg |
FY12 (Mar) |
24.56 |
21.0 |
$4.080 |
5.147% |
16.61 |
Interim 6ct ; Final 15ct |
|
ST Engg |
FY11 (Dec) |
17.28 |
15.5 |
$3.300 |
4.697% |
19.10 |
Interim 3ct ; Final 4ct + Special 8.5ct |
Note : SATS Special Div is Observed to be Non-Recurring
Transport
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SBSTransit |
FY11 (Dec) |
11.89 |
5.90 |
$1.540 |
3.831% |
12.95 |
Interim 3.1ct ; Final 2.8ct |
|
ComfortDelGro |
FY11 (Dec) |
11.27 |
6.00 |
$1.680 |
3.571% |
14.91 |
Interim 2.7ct ; Final 3.3ct |
|
SMRT |
FY12 (Mar) |
7.9 |
7.45 |
$1.630 |
4.571% |
20.63 |
Interim 1.75ct ; Final 5.7ct |
TELCO
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SingTel |
FY12 (Mar) |
25.04 |
15.8 |
$3.580 |
4.413% |
14.30 |
Interim 6.8ct ; Final 9ct |
|
M1 |
FY11 (Dec) |
18.1 |
14.5 |
$2.530 |
5.731% |
13.98 |
Interim 6.6ct ; Final 7.9ct |
|
StarHub |
FY11 (Dec) |
18.40 |
20 |
$3.840 |
5.208% |
20.87 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
|
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
|
SPAus |
2H – Mar12 |
A4.0 (Gross) |
$1.380 |
7.593% |
A$0.88 |
2H12 A4.0ct ; 1H12 A4.0ct |
|
MIIF |
2H – Dec11 |
2.75 |
$0.545 |
10.092% |
$0.820 |
1H11 2.75ct ; 2H11 2.75ct |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.3098) fm Yahoo
NOTES :
- Mkt Price is as on 31-Jul-12
- SPAus : 2H12 (Mar12) – A4ct = A1.333ct (Franked) + A2.159ct (Interest) + A0.508ct (Capital Returns) ; FY12 Guidance = A8.2ct ; 3-for-20 @ S$1.25 (A$1)
- SATSvcs : Q412 (Mar12) – Final 6ct + Special 15ct ; Q212 (Sep11) – Interim 5ct
- SingTel : 2H12 (Mar12) – Final 9ct ; 1H12 (Sep11) – Interim 6.8ct ; Includes Exceptional Net Tax Credit S$270M
- SIAEC : Q412 (Mar12) – Final 15ct ; Q212 (Sep11) – Interim 6ct
- StarHub : Q112 (Mar) – 5ct
- SMRT : Q412 (Mar12) – Final 5.7ct ; Q212 (Sep11) – Interim 1.75ct
- SingPost : Q412 (Mar12) – 2.5ct ; Q312 (Dec11) – 1.25ct ; Q212 (Sep11) – 1.25ct ; Q112 (Jun11) – 1.25ct
- SPH : 1H12 (Feb) – 7ct
- ST Engg : 1H11 (Jun) – 3ct ; 2H11 (Dec) – 4ct (Final) + 8.5ct (Special)
- MIIF : 1H11 (Jun) – 2.75ct ; 2H11 (Dec) – 2.75ct
- ComfortDelgro : Q411 (Dec) – 3.3ct ; Q211 (Jun) – 2.7ct
- SBSTransit : Q411 (Dec) – 2.8ct ; Q211 (Jun) – 3.1ct
- StarHub : FY12 Div Guidance – 5ct/Q
- M1 : 2H11 (Dec) – Final 7.9ct ; 1H11 (Jun) – Interim 6.6ct
SMRT – Phillip
Profits flattered by one-off gains
Company Overview
SMRT is a multi-modal land transport operator with exposures to various modes of operations, including rail, bus & taxi services. A significant part of its profits are generated from its ancillary businesses, such as advertising & rental of commercial spaces.
• Revenue growth in line with expectations
• Profits flattered by net one-off gain of S$4.5mn
• Undeserving of premium valuations with ongoing challenges to the business
• Maintain Sell with target price of S$1.35
What is the news?
Revenue for SMRT continued to trend north, driven mainly by higher ridership on its rail network with the full opening of Circle Line. Despite significantly higher operating expenses, the Group's EBITDA margins improved by 61bp in the quarter. Consequently, profits for SMRT increased by 4.7%y-y. Management highlighted that operational challenges for the Group remain, as profitability is expected to be impacted by higher staff, depreciation and repair & maintenance costs.
How do we view this?
The strong 4.7% increase in net income was flattered by one-off items that were booked in the quarter. After adjusting for the one-off net gains of S$4.5mn booked, we estimate that underlying profits would have declined by 8% in the quarter.
Investment Actions?
With our expectations of higher operating expenses and stagnant average fares for the year, we believe that the difficult financial performance for SMRT would persist. Despite the ongoing challenges to its outlook, the stock continues to trade at an undeserving premium valuation of 18X P/E. We roll forward our valuation basis and maintain our Sell recommendation on SMRT with target price of S$1.35.
SMRT – Phillip
Profits flattered by one-off gains
Company Overview
SMRT is a multi-modal land transport operator with exposures to various modes of operations, including rail, bus & taxi services. A significant part of its profits are generated from its ancillary businesses, such as advertising & rental of commercial spaces.
• Revenue growth in line with expectations
• Profits flattered by net one-off gain of S$4.5mn
• Undeserving of premium valuations with ongoing challenges to the business
• Maintain Sell with target price of S$1.35
What is the news?
Revenue for SMRT continued to trend north, driven mainly by higher ridership on its rail network with the full opening of Circle Line. Despite significantly higher operating expenses, the Group's EBITDA margins improved by 61bp in the quarter. Consequently, profits for SMRT increased by 4.7%y-y. Management highlighted that operational challenges for the Group remain, as profitability is expected to be impacted by higher staff, depreciation and repair & maintenance costs.
How do we view this?
The strong 4.7% increase in net income was flattered by one-off items that were booked in the quarter. After adjusting for the one-off net gains of S$4.5mn booked, we estimate that underlying profits would have declined by 8% in the quarter.
Investment Actions?
With our expectations of higher operating expenses and stagnant average fares for the year, we believe that the difficult financial performance for SMRT would persist. Despite the ongoing challenges to its outlook, the stock continues to trade at an undeserving premium valuation of 18X P/E. We roll forward our valuation basis and maintain our Sell recommendation on SMRT with target price of S$1.35.