Month: May 2013
ComfortDelgro – MayBank Kim Eng
Growth through acquisition
Focusing on the business units that matter. Despite the diversity of CDG’s businesses, three major business units (Singapore Taxi: 23%, Australia Bus: 22%, UK/Ireland Bus: 12%) would collectively account for more than 56% of the group’s FY15E operating profits. While certain business units will experience near term challenges, these three core profit contributors will sustain the group’s earnings over the next 3 years.
UK & Australia bus to lead profit growth. Driven by a series of acquisitions, we forecast annual EBIT growth of 7% and 4% for CDG’s UK and Australia bus businesses over the next 3 years. Leveraging on their growing scale of operation, successful bids for new routes would provide further upside to our forecasts.
Singapore Taxi remains a key profit contributor. Despite conceding market share over the past 5 years (FY12: 58% vs FY07: 64%), management had demonstrated a strong profit focus at its Taxi operations in Singapore. While its fleet grew by merely 2% p.a. between FY08 to FY12, EBIT increased at a CAGR of 16% from SGD52mn to SGD93mn over the same period of time. We attribute the strong profitability of CDG’s operation to two key factors: 1) prudent fleet expansion at a time of high COE prices and 2) leveraging on its scale to grow an alternative income stream.
Limited exposure to negatives at Singapore’s fare based business. Profitability of Singapore’s rail and bus operators had been under pressure. While we have a negative near term view on Singapore’s fare based businesses, we argue that CDG’s diversification efforts have reduced their dependency on them. With CDG’s exposure to Singapore’s fare based at merely 8% of its market capitalization, we believe that their exposure is limited.
Valuation. CDG offers a unique defensive stock exposure with diversified earnings and geographical exposure. With continued weakness on the economic front, we expect sustained preference for defensive stocks in the year ahead. We value CDG using a FY14E P/E of 18X and derive a TP of SGD2.33. Upgrade to Buy.
May 2013
Results Announcement
- 6 May 13 (AM) : SingPost (Q413) – EPS 1.185ct (todate 6.435ct) ; Div 2.5ct (todate 6.25ct)
- 7 May 13 : STEng (Q113) – EPS 4.34ct
- 9 May 13 : StarHub (Q113) – EPS 5.3ct ; Div 5ct
- 13 May 13 : SBSTransit (Q113) – EPS 0.92ct
- 14 May 13 : SIAEC (Q413) – EPS 5.96ct (todate 24.51ct) ; Div 15ct (todate 22ct)
- 14 May 13 : ComfortDelgro (Q113) – EPS 2.74ct
- 15 May 13 (AM) : SingTel (Q413) – EPS 5.45ct (todate 22.02ct) ; Div 10ct (todate 16.8ct)
- 15 May 13 (AM) : SATS (Q413) – EPS 4.2ct (todate 16.6ct) ; Div 10ct (todate 15ct)
- 15 May 13 (AM) : SPAusNet (2H13) – Gross Div A4.1ct
STI = 3311.37 (-56.81 for May)
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
HL Fin |
FY12 (Dec) |
17.60 |
12.00 |
$2.720 |
4.412% |
15.45 |
Interim 4ct ; Final 8ct |
SingPost |
FY13 (Mar) |
6.435 |
6.25 |
$1.310 |
4.771% |
20.36 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
SPH |
FY12 (Aug) |
23 |
24.0 |
$4.270 |
5.621% |
18.57 |
Interim 7ct ; Final 9ct + Special 8ct |
Aviation Services
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
SATS |
FY13 (Mar) |
16.60 |
15.0 |
$3.260 |
4.601% |
19.64 |
Interim 5ct ; Final 6ct + Special 4ct |
SIA Engg |
FY13 (Mar) |
24.51 |
22.0 |
$5.070 |
4.339% |
20.69 |
Interim 7ct ; Final 15ct |
ST Engg |
FY12 (Dec) |
18.76 |
16.8 |
$4.090 |
4.108% |
21.80 |
Interim 3ct ; Final 4ct + Special 9.8ct |
Note : SATS Special Div is Observed to be Non-Recurring
Transport
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
SBSTransit |
FY12 (Dec) |
6.01 |
3.00 |
$1.420 |
2.113% |
23.63 |
Interim 1.35ct ; Final 1.65ct |
ComfortDelGro |
FY12 (Dec) |
11.89 |
6.40 |
$1.905 |
3.360% |
16.02 |
Interim 2.9ct ; Final 3.5ct |
SMRT |
FY13 (Mar) |
5.5 |
2.50 |
$1.430 |
1.748% |
26.00 |
Interim 1.5ct ; Final 1.0ct |
TELCO
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
SingTel |
FY13 (Mar) |
22.02 |
16.8 |
$3.750 |
4.480% |
17.03 |
Interim 6.8ct ; Final 10ct |
M1 |
FY12 (Dec) |
16.1 |
14.6 |
$3.140 |
4.650% |
19.50 |
Interim 6.6ct ; Final 6.3ct + Special 1.7ct |
StarHub |
FY12 (Dec) |
20.93 |
20 |
$4.010 |
4.988% |
19.16 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
SPAus |
2H – Mar13 |
A4.1 (Gross) |
$1.460 |
6.796% |
A$0.91 |
1H13 A4.1ct ; 2H13 A4.1ct |
MIIF |
FY13 – Guidance |
1.90 |
$0.180 |
10.556% |
? |
1H12 2.75ct ; 2H12 2.75ct + 3ct (Special) |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.2101) fm Yahoo
NOTES :
- Mkt Price is as on 31-May-13
- MIIF : FY13 Guidance 1H13 (Jun) –0.7ct ; 2H13 (Dec) – 1.2ct (Final) ; APTT IPO Entitlement / 1000 MIIF Shares (Estimate) = 457 APTT Shares or $443.29
- SPAus : 2H13 (Mar13) – A4.1ct = A1.367ct (Franked) + A2.649ct (Interest) + A0.084ct (Capital Returns) ; 1H13 (Sep12) – A4.1ct = A1.367ct (Franked) + A2.467ct (Interest) + A0.266ct (Capital Returns)
- SPAus : FY14 Guidance = A8.36ct
- SATSvcs : 2H13 (Mar13) – Final 6ct + Special 4ct ; 1H13 (Sep12) – Interim 5ct
- SingTel : 2H13 (Mar) – Final 10ct ; 1H13 (Sep12) – Interim 6.8ct ; Div Policy – 60% to 75% of Underlying Net Profit
- SIAEC : Q413 (Mar13) – Final 15ct ; Q213 (Sep12) – Interim 7ct
- StarHub : Q113 (Mar) – 5ct
- SingPost : Q413 (Mar13) – 2.5ct ; Q313 (Dec12) – 1.25ct ; Q213 (Sep12) – 1.25ct ; Q113 (Jun12) – 1.25ct
- SMRT : Q413 (Mar13) – Final 1.0ct ; Q213 (Sep12) – Interim 1.5ct
- SPH : 1H13 (Feb) – Interim = 7ct
- HLFin : 1H12 (Jun) – 4ct ; 2H12 (Dec) – 8ct (Final)
- ST Engg : 1H12 (Jun) – 3ct ; 2H12 (Dec) – 4ct (Final) + 9.8ct (Special)
- ComfortDelgro : Q412 (Dec) – 3.5ct ; Q212 (Jun) – 2.9ct
- StarHub : FY13 Div Guidance – 5ct/Q
- SBSTransit : Q212 (Jun) – 1.35ct ; Q412 (Dec) – 1.65ct
- M1 : 2H12 (Dec) – Final 6.3ct + Special 1.7ct ; 1H12 (Jun) – Interim 6.6ct
May 2013
Results Announcement
- 6 May 13 (AM) : SingPost (Q413) – EPS 1.185ct (todate 6.435ct) ; Div 2.5ct (todate 6.25ct)
- 7 May 13 : STEng (Q113) – EPS 4.34ct
- 9 May 13 : StarHub (Q113) – EPS 5.3ct ; Div 5ct
- 13 May 13 : SBSTransit (Q113) – EPS 0.92ct
- 14 May 13 : SIAEC (Q413) – EPS 5.96ct (todate 24.51ct) ; Div 15ct (todate 22ct)
- 14 May 13 : ComfortDelgro (Q113) – EPS 2.74ct
- 15 May 13 (AM) : SingTel (Q413) – EPS 5.45ct (todate 22.02ct) ; Div 10ct (todate 16.8ct)
- 15 May 13 (AM) : SATS (Q413) – EPS 4.2ct (todate 16.6ct) ; Div 10ct (todate 15ct)
- 15 May 13 (AM) : SPAusNet (2H13) – Gross Div A4.1ct
STI = 3311.37 (-56.81 for May)
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
HL Fin |
FY12 (Dec) |
17.60 |
12.00 |
$2.720 |
4.412% |
15.45 |
Interim 4ct ; Final 8ct |
SingPost |
FY13 (Mar) |
6.435 |
6.25 |
$1.310 |
4.771% |
20.36 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
SPH |
FY12 (Aug) |
23 |
24.0 |
$4.270 |
5.621% |
18.57 |
Interim 7ct ; Final 9ct + Special 8ct |
Aviation Services
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
SATS |
FY13 (Mar) |
16.60 |
15.0 |
$3.260 |
4.601% |
19.64 |
Interim 5ct ; Final 6ct + Special 4ct |
SIA Engg |
FY13 (Mar) |
24.51 |
22.0 |
$5.070 |
4.339% |
20.69 |
Interim 7ct ; Final 15ct |
ST Engg |
FY12 (Dec) |
18.76 |
16.8 |
$4.090 |
4.108% |
21.80 |
Interim 3ct ; Final 4ct + Special 9.8ct |
Note : SATS Special Div is Observed to be Non-Recurring
Transport
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
SBSTransit |
FY12 (Dec) |
6.01 |
3.00 |
$1.420 |
2.113% |
23.63 |
Interim 1.35ct ; Final 1.65ct |
ComfortDelGro |
FY12 (Dec) |
11.89 |
6.40 |
$1.905 |
3.360% |
16.02 |
Interim 2.9ct ; Final 3.5ct |
SMRT |
FY13 (Mar) |
5.5 |
2.50 |
$1.430 |
1.748% |
26.00 |
Interim 1.5ct ; Final 1.0ct |
TELCO
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
SingTel |
FY13 (Mar) |
22.02 |
16.8 |
$3.750 |
4.480% |
17.03 |
Interim 6.8ct ; Final 10ct |
M1 |
FY12 (Dec) |
16.1 |
14.6 |
$3.140 |
4.650% |
19.50 |
Interim 6.6ct ; Final 6.3ct + Special 1.7ct |
StarHub |
FY12 (Dec) |
20.93 |
20 |
$4.010 |
4.988% |
19.16 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
SPAus |
2H – Mar13 |
A4.1 (Gross) |
$1.460 |
6.796% |
A$0.91 |
1H13 A4.1ct ; 2H13 A4.1ct |
MIIF |
FY13 – Guidance |
1.90 |
$0.180 |
10.556% |
? |
1H12 2.75ct ; 2H12 2.75ct + 3ct (Special) |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.2101) fm Yahoo
NOTES :
- Mkt Price is as on 31-May-13
- MIIF : FY13 Guidance 1H13 (Jun) –0.7ct ; 2H13 (Dec) – 1.2ct (Final) ; APTT IPO Entitlement / 1000 MIIF Shares (Estimate) = 457 APTT Shares or $443.29
- SPAus : 2H13 (Mar13) – A4.1ct = A1.367ct (Franked) + A2.649ct (Interest) + A0.084ct (Capital Returns) ; 1H13 (Sep12) – A4.1ct = A1.367ct (Franked) + A2.467ct (Interest) + A0.266ct (Capital Returns)
- SPAus : FY14 Guidance = A8.36ct
- SATSvcs : 2H13 (Mar13) – Final 6ct + Special 4ct ; 1H13 (Sep12) – Interim 5ct
- SingTel : 2H13 (Mar) – Final 10ct ; 1H13 (Sep12) – Interim 6.8ct ; Div Policy – 60% to 75% of Underlying Net Profit
- SIAEC : Q413 (Mar13) – Final 15ct ; Q213 (Sep12) – Interim 7ct
- StarHub : Q113 (Mar) – 5ct
- SingPost : Q413 (Mar13) – 2.5ct ; Q313 (Dec12) – 1.25ct ; Q213 (Sep12) – 1.25ct ; Q113 (Jun12) – 1.25ct
- SMRT : Q413 (Mar13) – Final 1.0ct ; Q213 (Sep12) – Interim 1.5ct
- SPH : 1H13 (Feb) – Interim = 7ct
- HLFin : 1H12 (Jun) – 4ct ; 2H12 (Dec) – 8ct (Final)
- ST Engg : 1H12 (Jun) – 3ct ; 2H12 (Dec) – 4ct (Final) + 9.8ct (Special)
- ComfortDelgro : Q412 (Dec) – 3.5ct ; Q212 (Jun) – 2.9ct
- StarHub : FY13 Div Guidance – 5ct/Q
- SBSTransit : Q212 (Jun) – 1.35ct ; Q412 (Dec) – 1.65ct
- M1 : 2H12 (Dec) – Final 6.3ct + Special 1.7ct ; 1H12 (Jun) – Interim 6.6ct
ComfortDelgro – OSK DMG
SLF Sell-Down Presents Opportunity
Singapore Labour Foundation (SLF), ComfortDelGro’s (CD) biggest shareholder is paring down its stake via a block trade of 170m shares worth c.SGD330m. SLF’s stake will fall c.8ppt to c.3.9%. CD’s share price fell 12% on Thursday, which we believe presents a good buying opportunity. We are not concerned by the sell-down as fundamentals remain strong. Maintain BUY and TP of SGD2.25.
12% sell-down presents a good opportunity to accumulate. CD’s share price fell 12% last Thursday following the paring down of SLF’s stake. We think this sell-down is unwarranted given that company fundamentals remain intact, and this presents a good entry point for investors looking to accumulate.
This could simply be a timely exit for SLF. SLF is a statutory board of the Ministry of Manpower (MOM) that aims to develop Labour Movement that support Singapore’s growth as well as the well-being of working people in Singapore. As CD’s overseas businesses grew and now accounting for 46% of group operating profit, coupled with CD’s aim to hit 50% profit contribution from overseas, we think that SLF’s involvement with CD could be less relevant now. Moreover, with the recent 32% six month run up in share price (22 May 13 close), we think SLF simply sees this period as an opportunistic time to exit.
No change to business fundamentals, no reason for sell-down. We understand that SLF had been a passive shareholder holding one nonexecutive board seat. We believe the fundamentals of CD remain unchanged and still remain positive on its overseas growth potential to drive earnings.
CD remains our preferred pick. At a FY13 P/E of 15.5x, CD is still more attractive than SMRT’s 24.5x FY14 P/E (FYE Mar). We like CD’s strong overseas network, which enhances overseas growth prospects versus SMRT which still faces cost related challenges.
ComfortDelgro – OSK DMG
SLF Sell-Down Presents Opportunity
Singapore Labour Foundation (SLF), ComfortDelGro’s (CD) biggest shareholder is paring down its stake via a block trade of 170m shares worth c.SGD330m. SLF’s stake will fall c.8ppt to c.3.9%. CD’s share price fell 12% on Thursday, which we believe presents a good buying opportunity. We are not concerned by the sell-down as fundamentals remain strong. Maintain BUY and TP of SGD2.25.
12% sell-down presents a good opportunity to accumulate. CD’s share price fell 12% last Thursday following the paring down of SLF’s stake. We think this sell-down is unwarranted given that company fundamentals remain intact, and this presents a good entry point for investors looking to accumulate.
This could simply be a timely exit for SLF. SLF is a statutory board of the Ministry of Manpower (MOM) that aims to develop Labour Movement that support Singapore’s growth as well as the well-being of working people in Singapore. As CD’s overseas businesses grew and now accounting for 46% of group operating profit, coupled with CD’s aim to hit 50% profit contribution from overseas, we think that SLF’s involvement with CD could be less relevant now. Moreover, with the recent 32% six month run up in share price (22 May 13 close), we think SLF simply sees this period as an opportunistic time to exit.
No change to business fundamentals, no reason for sell-down. We understand that SLF had been a passive shareholder holding one nonexecutive board seat. We believe the fundamentals of CD remain unchanged and still remain positive on its overseas growth potential to drive earnings.
CD remains our preferred pick. At a FY13 P/E of 15.5x, CD is still more attractive than SMRT’s 24.5x FY14 P/E (FYE Mar). We like CD’s strong overseas network, which enhances overseas growth prospects versus SMRT which still faces cost related challenges.