March 2013
STI = 3308.10 (+38.15 vs end-Feb)
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
HL Fin |
FY12 (Dec) |
17.60 |
12.00 |
$2.780 |
4.317% |
15.80 |
Interim 4ct ; Final 8ct |
|
SingPost |
FY12 (Mar) |
7.407 |
6.25 |
$1.245 |
5.020% |
16.81 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
|
SPH |
FY12 (Aug) |
23 |
24.0 |
$4.480 |
5.357% |
19.48 |
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 |
$3.040 |
8.553% |
19.74 |
Interim 5ct ; Final 6ct + Special 15ct |
|
SIA Engg |
FY12 (Mar) |
24.56 |
21.0 |
$4.740 |
4.430% |
19.30 |
Interim 6ct ; Final 15ct |
|
ST Engg |
FY12 (Dec) |
18.76 |
16.8 |
$4.310 |
3.898% |
22.97 |
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 |
$1.500 |
2.000% |
24.96 |
Interim 1.35ct ; Final 1.65ct |
|
ComfortDelGro |
FY12 (Dec) |
11.89 |
6.40 |
$1.910 |
3.351% |
16.06 |
Interim 2.9ct ; Final 3.5ct |
|
SMRT |
FY12 (Mar) |
7.9 |
7.45 |
$1.580 |
4.715% |
20.00 |
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 |
$3.590 |
4.401% |
14.34 |
Interim 6.8ct ; Final 9ct |
|
M1 |
FY12 (Dec) |
16.1 |
14.6 |
$2.960 |
4.932% |
18.39 |
Interim 6.6ct ; Final 6.3ct + Special 1.7ct |
|
StarHub |
FY12 (Dec) |
20.93 |
20 |
$4.350 |
4.598% |
20.78 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
|
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
|
SPAus |
1H – Sep12 |
A4.1 (Gross) |
$1.540 |
6.898% |
$1.300 |
1H13 A4.1ct ; 2H12 A4.0ct |
|
MIIF |
2H – Dec12 |
5.75 |
$0.575 |
9.565% |
$0.700 |
1H12 2.75ct ; 2H12 2.75ct + 3ct (Special) |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.2955) fm Yahoo
NOTES :
- Mkt Price is as on 28-Mar-13
- 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
- MIIF : 1H12 (Jun) – 2.75ct ; 2H12 (Dec) – 2.75ct (Final) + 3ct (Special) ; Above Yield is Computed without Special Dividend
- SingTel : 1H13 (Sep12) – Interim 6.8ct
- SPAus : 1H13 (Sep12) – A4.1ct = A1.367ct (Franked) + A2.467ct (Interest) + A0.266ct (Capital Returns)
- SATSvcs : Q213 (Sep12) – Interim 5ct
- StarHub : Q312 (sep) – 5ct ; Q212 (Jun) – 5ct ; Q112 (Mar) – 5ct
- SMRT : Q213 (Sep12) – Interim 1.5ct
- SIAEC : Q213 (Sep12) – Interim 7ct
- SingPost : Q213 (Sep12) – 1.25ct ; Q113 (Jun12) – 1.25ct
- SPH : 2H12 (Aug) – Final =9ct + Special = 8ct ; 1H12 (Feb) – Interim = 7ct
- 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)
STEng – MayBank Kim Eng
Defence’s Turn in the Limelight
Defence outlook complementing commercial – reiterate BUY. We reiterate our BUY call on ST Engineering (STE), as a positive defence business outlook lends support to the thesis that it should trade at a premium to its historical average. We maintain our target price at SGD4.40, pegged to 21.6x FY2013 PER, 1 standard deviation above its historical mean. STE’s orderbook, expected to reach record heights again in 1Q13 continues to provide clear earnings visibility, together with a healthy dividend yield of 4.4%.
MINDEF and other defence contracts take centre-stage. Two of STE’s largest contracts announced to-date have been derived from its defence business, and both from its Marine arm. The first, an SGD880m contract for 4 naval vessels from the Royal Navy of Oman, followed by a Jan 2013 contract with MINDEF for 8 patrol vessels, which we estimate to be worth ~SGD1.8b. We continue to see healthy defence expenditure trends both in terms of Singapore (CAGR 4%) as well as from STE’s overseas customers (CAGR 4-5%).
Four business segments a formidable mix. We also maintain that each of ST Engineering’s four business segments of aerospace, marine, electronics and land systems have clear skies ahead in terms of business outlook. Commercial contracts (63% by total FY2012 revenue) such as aerospace MRO, electronics’ rail and road systems, marine shipbuilding continue to complement the defence business and maintain a healthy record of contract wins.
Reiterate BUY, 1Q13 orderbook catalyst on the way. We reiterate our BUY recommendation on STE, with a view towards its 1Q13 orderbook setting yet another record (~SGD13b), providing the earnings visibility that would catalyse its share price appreciation. Our target price of SGD4.40 remains pegged to 21.6x FY2013 PER, 1 SD above its historical average. Investors who own the stock before Ex-Div on 26 Apr will stand to enjoy SG 13.8 cts / share of dividends (translating to ~3.3% yield).
SingTel – RHB
Highlights From Investor Day
At the recent Investor Day (SID), SingTel reaffirmed its focus on investing for the future and transforming into a service-centric organisation. These initiatives should continue to weigh on earnings in the medium term. There is easing competition in a few markets but we believe it is not broad-based. The overall takeaways from the event do not alter our view on the stock, which lacks meaningful re-rating catalysts. Maintain our forecasts and SOP FV of SGD3.15. NEUTRAL.
Becoming more “engaged”. The CEOs of SingTel’s new functional business pillars made presentations at its annual SID. The key themes were: (i) the value propositions within the digital space, (ii) customer centricity, and (iii) data bundling/monetisation opportunities. SingTel is creating an engagement layer that sits on top of its current relationship with subscribers to improve loyalty and drive future profits. It has grand plans to maximise monetisation of data across multiple platforms, although these may hurt group earnings in the medium term.
A sprinkling of positives. Competitive pressure appears to be easing in India as some telcos resorted to raising tariffs recently, but we suspect the price repair is not broad-based. Meanwhile, Optus believes it is in enviable position to compete with Telstra given the narrowing coverage gap and a visibly strong network. We expect competition to intensify in Thailand as AIS ramps up acquisition activities to migrate as many 2G subscribers as possible. In Indonesia, Telkomsel is keeping to its aggressive 3G site deployment while competition in the Philippines looks set to persist for a while, while putting pressure on Globe.
Maintain NEUTRAL. We make no changes to our forecast. The takeaways from the event do not change our view on the group, which continue to face medium-term pressure on profitability and decelerating revenue growth due to competitive headwinds in Singapore and Australia.
SPH – Kim Eng
Opening Up More Possibilities
Just the first step into property. We raise our target price to SGD4.95 after factoring in REIT benefits. BUY SPH. This is just the first step of what is likely to turn out to be a multi-year value unlocking process. SPH’s confirmation of a retail REIT spin-off in the future adds another, more exciting dimension to the stock. We have long speculated that it could become more aggressive on the property front, and this has materialised. The greatest concern right now is its limited supply of sponsor assets, which can be overcome by introducing new partners, more acquisitions or expanding overseas.
Immediate benefits from spinoff. We believe the proposed REIT can fetch a potential distribution yield of 5.6%, relatively attractive when compared to the average S-REIT yield of 5.3% at this end of the yield compression cycle and even lower returns from fixed income. The market now expects a special dividend from the spinoff, which we have estimated at SGD1b (SGD0.63 a share) assuming tax savings from a REIT structure and debt repayment.
Looking beyond. However, we believe that the market has not yet fully factored the upside from property in the long term. Options include (1) roping in asset owner partners to expand the asset pipeline, (2) directly acquiring suitable assets in Singapore, and/or (3) expanding outside Singapore to other countries. Partners are likely to be smaller asset owners that cannot form their own REIT and that may find it more convenient to work with a big player who can provide the financial heft and management muscle.
Thinking outside the box. BUY. We maintain BUY on SPH, with a raised target price of SGD4.95 based on SOTP. Dividend yield still looks attractive at 5.7% even after recent share price surge. We believe we are the first broker to highlight the possibility of potential partners that would address concerns that, as sponsor, it does not have a long enough tail of injectable assets, and extend SPH’s attraction as a property play to augment its waning media business.
SingPost – OCBC
AWAITING NEWS OF LARGER ACQUISITIONS
- Self-storage company for S$37m
- Also acquires freight forwarding firm
- Enhances logistics & e-commerce capabilities
Building its non-mail businesses
In recent months, Singapore Post (SingPost) has been acquiring stakes in companies to build its non-mail businesses – it completed the 100% acquisition of General Storage Company Pte Ltd (GSC) in end Jan for S$37m and the 62.5% acquisition of Famous Holdings Pte Ltd (FH) in end Feb this year for S$60m.
Acquired self-storage company and freight-forwarding firm
GSC operates a self-storage business in Singapore, under the Lock+Store brand. This is not a new business area for SingPost, which has been offering self-storage solutions through S3 (Self Storage Solutions) since 2009. The acquisition will add storage facilities in Tanjong Pagar and Chai Chee for SingPost. Meanwhile, FH is a Singapore-based sea freight consolidator and freight-forwarder. SingPost acquired a 62.5% stake, and there is also an option to transact the remaining 37.5% stake at the end of 2015. Founded in 1988, FH has a regional network with offices in six countries.
Synergies with logistics and e-commerce
Self-storage solutions offer synergies with SingPost’s existing businesses in logistics and e-commerce – delivery and other value-added services can be added to storage solutions. With its network of properties including post offices and delivery bases, SingPost is able to provide integrated services spanning warehousing, fulfillment, delivery and distribution. The selfstorage business is also a good usage option for SingPost’s properties that are industrial-zoned. Meanwhile, FH’s freight-forwarding capabilities complement SingPost’s e-commerce logistics capabilities in regional fulfillment and warehousing, as well as its postal & parcel delivery networks.
Maintain HOLD
SingPost had S$661.5m in cash and cash equivalents, along with financial assets worth S$36.5m, as at Dec 2012. In comparison, these acquisitions remain on a relatively small scale and we are awaiting news of larger acquisitions. Meanwhile, the stock has been trading in a range of S$1.18-S$1.23 since we downgraded it to HOLD on 28 Jan. We like SingPost’s stable operating cash flows and consistent dividends, but see few re-rating catalysts for now. Maintain HOLD with S$1.23 fair value.