Month: October 2010
SPAUSNET – SGX
AER rejects significant price rises by Victorian electricity distributors. SPAUSNET is one for the electricity distributors.
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Thomson Medical – BT
Thomson Medical posts 18.5% profit jump for Q4
For the year, net profit rises 24.2% to $15.88m; revenue jumps by 21.2%
THOMSON Medical Centre, which provides health care for women and children, saw net profit rise 18.5 per cent year-on-year to $4.04 million for the fourth quarter ended Aug 31, 2010.
Revenue for the quarter rose by 23.3 per cent to $22.19 million on the back of strong performances by both its hospital operations and ancillary services as well as its specialised and other services division, which grew by 11 per cent and 60.5 per cent respectively. Specialised and other services jumped from $4.51 million to $7.24 million due to increased patient loads in the Thomson Women’s Clinics (TWC) and Thomson Women Cancer Centre (TWCC) as well as the contribution from new business, Thomson Paediatric Centre (TPC).
Earnings per share climbed to 1.51 cents in Q410, versus 1.17 cents in Q409.
For the full year, net profit was 24.2 per cent higher at $15.88 million while revenue increased by 21.2 per cent to $81.67 million.
In FY10, the group handled 9,268 deliveries in its hospital, up 4.1 per cent from FY09, while its operating theatres saw 7,482 cases, which represents a 3.2 per cent increase.
Meanwhile, the group’s consultancy and management project in Binh Duong Province in Vietnam, the Hanh Phuc International Women and Children Hospital, will begin operations next month.
However, Thomson Medical’s hospital operations segment is still likely to remain the largest revenue contributing segment for the next three to five years.
The group is also presently looking at potential sites for a second hospital in Hanoi, Vietnam.
Cheng Shao Shiong @ Bertie Cheng, a non-executive director on Thomson Medical’s board and Allan Yeo, group chief executive, have been appointed directors to Hanh Phuc Hospital’s board.
‘We are always looking for suitable opportunities to expand though our main focus is to build up our presence in Vietnam,’ Mr Yeo said, adding that it is interested in fast developing countries which have high birth rates and which lack the necessary healthcare infrastructure. ‘Our strategy in approaching every new market is to find a business partner who can value-add to the collaboration.’
At home, the group will grow by increasing its distribution channels and widening its network of satellite clinics, as well as sourcing for new technologies to improve its services.
However, it has, for now, put on hold plans to have another two operating theatres, with work expected to commence in 2Q11 instead.
The directors are recommending a final dividend of two cents per share, payable 7 January 2011. They are also recommending a bonus issue on the basis of one bonus share for every 10 existing shares held by the shareholders – subject to the approval of the Singapore Exchange Securities Trading and the approval by shareholders at the upcoming Annual General Meeting.
Shares in Thomson Medical closed at $1.01 in trading yesterday, unchanged.
Thomson Medical – BT
Thomson Medical posts 18.5% profit jump for Q4
For the year, net profit rises 24.2% to $15.88m; revenue jumps by 21.2%
THOMSON Medical Centre, which provides health care for women and children, saw net profit rise 18.5 per cent year-on-year to $4.04 million for the fourth quarter ended Aug 31, 2010.
Revenue for the quarter rose by 23.3 per cent to $22.19 million on the back of strong performances by both its hospital operations and ancillary services as well as its specialised and other services division, which grew by 11 per cent and 60.5 per cent respectively. Specialised and other services jumped from $4.51 million to $7.24 million due to increased patient loads in the Thomson Women’s Clinics (TWC) and Thomson Women Cancer Centre (TWCC) as well as the contribution from new business, Thomson Paediatric Centre (TPC).
Earnings per share climbed to 1.51 cents in Q410, versus 1.17 cents in Q409.
For the full year, net profit was 24.2 per cent higher at $15.88 million while revenue increased by 21.2 per cent to $81.67 million.
In FY10, the group handled 9,268 deliveries in its hospital, up 4.1 per cent from FY09, while its operating theatres saw 7,482 cases, which represents a 3.2 per cent increase.
Meanwhile, the group’s consultancy and management project in Binh Duong Province in Vietnam, the Hanh Phuc International Women and Children Hospital, will begin operations next month.
However, Thomson Medical’s hospital operations segment is still likely to remain the largest revenue contributing segment for the next three to five years.
The group is also presently looking at potential sites for a second hospital in Hanoi, Vietnam.
Cheng Shao Shiong @ Bertie Cheng, a non-executive director on Thomson Medical’s board and Allan Yeo, group chief executive, have been appointed directors to Hanh Phuc Hospital’s board.
‘We are always looking for suitable opportunities to expand though our main focus is to build up our presence in Vietnam,’ Mr Yeo said, adding that it is interested in fast developing countries which have high birth rates and which lack the necessary healthcare infrastructure. ‘Our strategy in approaching every new market is to find a business partner who can value-add to the collaboration.’
At home, the group will grow by increasing its distribution channels and widening its network of satellite clinics, as well as sourcing for new technologies to improve its services.
However, it has, for now, put on hold plans to have another two operating theatres, with work expected to commence in 2Q11 instead.
The directors are recommending a final dividend of two cents per share, payable 7 January 2011. They are also recommending a bonus issue on the basis of one bonus share for every 10 existing shares held by the shareholders – subject to the approval of the Singapore Exchange Securities Trading and the approval by shareholders at the upcoming Annual General Meeting.
Shares in Thomson Medical closed at $1.01 in trading yesterday, unchanged.
SMRT – Phillip
Rideship update
•Rail ridership grew 13.4% y-y in August (YTD: 11.8%)
•Bus ridership grew 6.8% y-y in August (YTD: 5.8%)
•Operating costs likely to be a drag on 2Q11 results
•Forecasting revenue to come in at S$247m and net profit of S$43.7m
•Maintain Hold recommendation with a fair value of S$2.18 (unchanged)
Rail ridership grew 13.4% y-y while bus ridership grew 6.8% in August
Rail ridership for Aug’10 grew 13.4% y-y with full contribution from the circle line, while rail ridership for the first 8 months grew 11.8% y-y (forecast: 10% growth). Bus ridership for August grew 6.8% y-y (YTD: 5.8%). We are seeing double-digit growth rate in the rail sector for 5 consecutive months as COEs prices remained high and a low unemployment rate likely contributed to the strong growth. Average fares are likely to trend higher after the implementation of distance based fares.
Results preview for 2Q11
We are expecting revenue for 2Q11 to come in at S$247.3m with net profit of S$43.7m on the back of higher riderships and mega events during the quarter which is likely to contribute strongly to the advertising revenue. Operating costs continue to be a drag on earnings due to higher maintenance costs while electricity cost is likely to fall slightly as average prices for the Jul-Sept’10 fell to US$78/ barrel from US$83/ barrel a quarter ago. SMRT will be releasing their 2Q11 results next Friday (29th October 2010) after the market closes.
Maintain Hold with a fair value of S$2.18 ( unchanged)
We are maintaining our Hold recommendation on SMRT as the current price of S$2.05 represent little upside to our fair value of S$2.18. Transport operators like SMRT are unlikely to do well during inflationary times as they unable to increase prices of fare to match the increase in costs due to regulatory requirements. SMRT is currently trading at about 18.5XFY11E while our target price of S$2.18 represents a forward P/E of 19.6X (FY11 estimated earnings). We are advising investors to switch to Comfort Delgro 14.7X FY10 estimated earnings) for exposure to land transport sector.
SATS – OCBC
Robust operating data reaffirms 2Q performance
Robust aviation operating data. SATS Ltd’s recent 2QFY11 aviation operating data had lent support to our view that the group is poised to deliver another positive set of quarterly results on 2 Nov. As a note, the group registered improvement across all operating indices in the quarter (both YoY and QoQ), thanks to the recovery in the aviation industry. In particular, unit services grew 5.9% YoY as a result of increased flights from full-service and low-cost carriers. Unit meals also increased by 7.8% YoY on the back of a 10.8% YoY growth in passenger traffic, while cargo throughput rose 7.9% YoY. This is largely consistent with our Sep 17 report that SATS may potentially gain from the continued expansion in industry demand, hence turning in better financial performance for 2QFY11.
Improvements expected to continue, albeit at slower pace. According to the International Air Transport Association (IATA)’s October survey, aviation business conditions had continued to show improvements. While some airlines are starting to turn cautious in view of a modest economic growth in 2011, we note that a still-high 60% of the airlines being surveyed expect further improvement in profitability over the next 12 months (vs. 69.2% in July survey). On the passenger and cargo business front, expectations for further improvements in demand similarly appear to be moderating in light of the economic outlook and the end of restocking activity, but are
still high at 62.5-68.4% (down from 73.9-80.0% in the July survey). As such, we still expect to see further improvements in SATS’ operating performance going forward, albeit at a slower pace (in line with our FY11-12F forecasts).
Maintain BUY with S$3.30 fair value. We continue to like SATS for its growth opportunities, consistently strong operating cashflows and excellent management. The recent launch of the first-ever city check-in and baggage acceptance service with Marina Bay Sands and contract win to provide ground handling services for SIA in Hong Kong are testaments to the group’s ability to innovate quality services and expand its market presence, in our view. We are keeping our DCF-based fair value of S$3.30 pending the release of its 2QFY11 results (cost of equity: 8.5%, terminal growth rate: 1%). At current level, we see an attractive 17.0% upside potential in the stock. As such, our BUY rating on SATS remains.