June 2012
STI = 2878.45 (+31.63)
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
HL Fin |
FY11 (Dec) |
22.65 |
12.00 |
$2.370 |
5.063% |
10.46 |
Interim 4ct ; Final 8ct |
|
SingPost |
FY12 (Mar) |
7.407 |
6.25 |
$1.055 |
5.924% |
14.24 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
|
SPH |
FY11 (Aug) |
24 |
24.0 |
$3.900 |
6.154% |
16.25 |
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 |
$2.680 |
9.701% |
17.40 |
Interim 5ct ; Final 6ct + Special 15ct |
|
SIA Engg |
FY12 (Mar) |
24.56 |
21.0 |
$3.990 |
5.263% |
16.25 |
Interim 6ct ; Final 15ct |
|
ST Engg |
FY11 (Dec) |
17.28 |
15.5 |
$3.110 |
4.984% |
18.00 |
Interim 3ct ; Final 4ct + Special 8.5ct |
Note : SATS Special Div are 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 |
$1.545 |
3.883% |
13.71 |
Interim 2.7ct ; Final 3.3ct |
|
SMRT |
FY12 (Mar) |
7.9 |
7.45 |
$1.690 |
4.408% |
21.39 |
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 |
$3.300 |
4.788% |
13.18 |
Interim 6.8ct ; Final 9ct |
|
M1 |
FY11 (Dec) |
18.1 |
14.5 |
$2.560 |
5.664% |
14.14 |
Interim 6.6ct ; Final 7.9ct |
|
StarHub |
FY11 (Dec) |
18.40 |
20 |
$3.420 |
5.848% |
18.59 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Note : SingTel Special Div is Observed to be Non-Recurring
Funds / Infrastructure
|
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
|
SPAus |
2H – Mar12 |
A4.0 (Gross) |
$1.315 |
7.858% |
A$0.88 |
2H12 A4.0ct ; 1H12 A4.0ct |
|
MIIF |
2H – Dec11 |
2.75 |
$0.525 |
10.476% |
$0.820 |
1H11 2.75ct ; 2H11 2.75ct |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.2916) fm Yahoo
NOTES :
- Mkt Price is as on 29-Jun-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
StarHub – DMG
Keeping Its Gun Powder Dry
We hosted Starhub at our recent Asean Conference in Singapore where the telco recorded a good number of meeting requests. Discussions were centered on the upcoming bid for the 2013-2016 broadcasting rights to the BPL, capital management and data monetization efforts. There were no major surprises with management reiterating the need to maintain sufficient cash buffer in view of the uncertain industry dynamics. Starhub’s share price has re-rated on yield attraction but we think further upside may be capped by concerns over margin dilution from the BPL and steep device subsidies. We remain NEUTRAL on the stock but up our FV to SGD3.30 from SGD2.80 after lowering our WACC.
Sustainable dividends. Starhub prefers to grow its dividends progressively as to provide sustainable returns over the longer-term. While management acknowledged the potential for capital management due to the under-leveraged balance sheet, it prefers to keep its ‘gunpowder’ dry due to (i) regulatory uncertainties, (ii) the upcoming bid for the BPL and (iii) the intense mobile competition where device subsidies remained high. The telco has reaffirmed its 20cents/share dividend commitment for FY12 which translates into a decent net yield of 6%. Starhub continues to be the only telco that pays out quarterly dividends.
Pricing data the way it should be. We think it is a matter of time before Starhub responds to Singtel’s earlier move to lower its data cap on its 3G plans to better monetize data traffic. The incumbent’s move has raised the ire of some of its high usage data subscribers, benefitting Starhub and M1. We think Starhub will be in a better position to introduce a new set of data plans given that is already capitalizing on the lower data cap on its multi-SIM plans which have been well received. We expect the group to expand its LTE coverage to more areas outside of the CBD in 2013.
BPL- the sky is the limit? Starhub is evaluating all options including submitting a joint bid for 2013-2016 BPL season which starts in September. We expect the group to bid rationally, having learnt from the bitter experience in 2009 where it lost out to Singtel and with the benefit of the cross carriage ruling which requires that all content secured on an exclusive basis be shared. In the worst- case scenario that Starhub is not able to procure the BPL content directly (Singtel maintains exclusivity), it is still able to offer BPL to its pay-tv customers via the cross carriage arrangement with Singtel.
Domestic M&As. Starhub does not rule out domestic M&As if the business proposition makes sense and is synergistic to its existing quad play model. We think some acquisition activities may present itself within the broadband segment and content space, allowing Starhub to enhance its market position and competitive advantage.
RafflesMed – DMG
Expect staff cost to inch up YoY
We recently hosted Raffles Medical at the OSK|DMG ASEAN Corporate Day. Key takeaways from the meetings: (1) Staff cost is expected to increase YoY, with increased headcount to prepare for operations at Thong Sia Building. (2) Continues to look out for suitable overseas expansion opportunities. (3) Dividend payout is likely to remain at about 40%. We continue to like Raffles Medical for its resilience and stable growth. Maintain BUY with DCF-based TP of S$2.67.
Increased headcount to prepare for expanded operations. Raffles Medical hired more staff as it prepares for operations at Thong Sia (its Specialist Medical Centre) and its hospital extension. Its plans for Thong Sia are progressing on track, and partial operations are expected in mid-2013, when a significant number of current tenants move out. Its hospital extension project is progressing well and construction is expected to be completed in 2015. Management also recently adjusted the salaries of its doctors, which would also contribute to YoY higher staff costs from 2Q onwards. However, management is optimistic that they would be able to progressively revise its prices upwards and still maintain competitiveness, given that its charges are still much lower than the other private hospitals. It aims to keep staff cost to below 50% of revenue (we are estimating 48%).
Still on the lookout for regional expansion opportunities. Raffles Medical remains interested in expanding its operations regionally. It remains keen in the China, Malaysian and possibly Vietnam markets, although management maintains that it would only proceed with the right partner. While it has a strong balance sheet and stable cash flows, management does not rule out the possibility of carrying out fund raising activities should there be a need.
Expects to maintain dividend payout. While Raffles Medical does not have a fixed dividend policy, management intends to keep the dividend payout ratio at 40%.
SingTel – TODAY
SingTel CEO pay rises 8.7%
SingTel’s chief executive officer Chua Sock Koong received S$4.9 million in total remuneration for the firm’s financial year ended March ths year.
This is 8.7 per cent higher compared to her pay package of S$4.5 million in the previous year.
In its latest annual report, SingTel disclosed that Ms Chua received a fixed component of S$1.6 million. She also received cash bonuses of S$3.2 million.
The other components of her pay include the company’s contribution to the provident fund amounting to S$9,474, and benefits such as car and club memberships totalling S$74,251.
The CEO’s hike in remuneration came as the telco rang in a net profit of S$3.99 billion or a 4.3 per cent on-year increase for the full year.
The group’s operating revenue for the year also increased 4.2 per cent to S$18.8 billion compared to the previous year.
SingTel’s next highest paid senior management staff is Allen Lew, Country Chief Officer (Singapore) and CEO Group (Digital L!fe), who earned S$3.4 million.
In third is CEO Group Consumer and Country Chief Officer Australia, Paul O’Sullivan, who earned S$3.27 million.
In a statement, Ms Chua said despite looking for new growth areas, the “core telco business remains the critical lynchpin to our success”.
She added that the company will continue to review “the core foundations of our carrier business to anticipate industry changes rather than simply react to them”. CHANNEL NEWSASIA
RafflesMed – Kim Eng
Due for a Re-rating
Cheapest hospital stock now, upgrade to BUY. The 11% dip in share price from its February high of SGD2.44 has resulted in Raffles Medical Group (RMG) emerging as the cheapest hospital stock in the region. We believe that the defensive nature of its hospital earnings is a strong attribute in an uncertain market. We upgrade our recommendation from HOLD to BUY, given its widening valuation discount relative to peers. Our DCF-based target price is lowered marginally to SGD2.71 after some minor adjustments.
Premium valuations intact. Despite the recent sell-off in equity markets, hospital stocks have managed to hold on to their premium valuations, trading at above-market average PERs of about 26x. Aside from defensive earnings, anticipation of renewed interest in the healthcare sector could have provided stock support, in the hope of a positive re-rating in valuations for the sector.
No competition from Novena suites. Parkway Pantai’s 333-bed Mount Elizabeth Novena Hospital is expected to open next month with 180 beds operating initially and the rest to come on-stream by the end of the year. Though this marks one of the biggest increases in private hospital beds in more than 10 years, we do not expect any major negative impact on RMG as the new hospital targets the high-end segment of the market.
Cost containment manageable. RMG’s greatest challenge lies in managing staff cost, which is estimated at 48% of its total revenue. The Singapore government intends to increase healthcare professionals’ wages by an average of 20% by 2014. RMG would need to respond correspondingly with a competitive compensation structure to retain and attract staff. Nevertheless, we note that it still has room to raise its charges and intends to do so, given that its average surgical cost is lower than that of Singapore General Hospital, a public hospital.
Strongest balance sheet. RMG has the strongest balance sheet among its peers, being the only one in a net cash position. Even after accounting for capex for its expansion plans, we expect it to remain in a net cash position, helped by its strong operating cash flow generating capability. Upgrade to BUY.