StarHub is a fully-integrated info-communication company based in Singapore. Co. offers a full range of information, communications and entertainment services for both consumer and corporate markets. Co. operates a two-way 3.5G mobile network that delivers up to 14.4 Mbps for downlink (with HSPA+ coming soon) to complement its nation-wide GSM network, and an island-wide HFC network that delivers multi-channel cable TV services (including High Definition Television and on-demand services) as well as ultra-high speed residential broadband services. Co. also operates an extensive fixed business network that provides a wide range of data, voice and wholesale services.
United Overseas Bank is bank in Asia with a network of offices in 19 countries and territories in Asia Pacific, Western Europe and North America. Co. provides a range of financial services including personal financial services, private banking, business banking, commercial and corporate banking, transaction banking, investment banking, corporate finance, capital market activities, treasury services, brokerage and clearing services, asset management, venture capital management and insurance. Co. operates within three main operating segments: Group Retail, Group Wholesale, and Global Markets and Investment Management. As of Dec 31 2014, Co. had total assets of S$306.74 billion.
Our portfolio rose 2.0% mom in Jun 20, slightly lower than the FSSTI’s gain of 3.2% mom, mainly due to CSE Global’s share price weakness (-9.1% mom). However, the recent emergence of Heliconia as its largest shareholder should put CSE in a stronger position to expand its business. For Jul 20, we stick to our picks as we expect further share price upside to our portfolio.
KEY HIGHLIGHTS Strategy Alpha Picks: Sticking To Our Guns: Our portfolio rose 2.0% mom in Jun 20, slightly lower than the FSSTI’s gain of 3.2%. For Jul 20, we stick to our picks as we expect further share price upside to our portfolio. TRADERS’ CORNER Japfa (JAP SP): Trading BUY SATS (SATS SP): Trading SELL
GREATER CHINA Update Alibaba Group (BABA US/BUY/US$223.60/Target: US$275.00): New initiatives fuelling growth recovery. Changsha Zoomlion Heavy Industry (1157 HK/BUY/HK$7.17/Target: HK$8.50): A-share private placement to support long-term growth. INDONESIA Strategy Alpha Picks: Add BMRI To Portfolio: Add BMRI. Our picks are ROTI, BBNI, BMRI, KLBF, TLKM and UNVR. MALAYSIA Initiate Coverage Supermax (SUCB MK/BUY/RM10.36/Target: RM12.40): Initiate coverage with a BUY. Its OBM model coupled with its aggressive expansion coincide nicely with the anticipated supercycle earnings growth. Results Air...
Over 85% of China's K-12 students have returned to offline schools as of the first week of July, except for all students in Beijing, and students from certain areas in Hubei and Heilongjiang. The pandemic is reshaping the traditional education sector. We are positive on the online education business model as it will be propelled by larger adoption rate during the period, and big players like EDU and TAL should benefit from market consolidation down the road. Maintain OVERWEIGHT on the sector.
GREATER CHINA Economics Money Supply: Supportive of economic recovery, but the aggressive pace could lead to downside pressure on the renminbi. Sector Banking: Recent share price recovery driven by depressed valuations instead of improvement in fundamentals. Maintain MARKET WEIGHT. Education: Online Education: Tailwinds to sail through a rocky path. INDONESIA Update Gudang Garam (GGRM IJ/BUY/Rp46,875/Target: Rp68,500): Unjustifiably punished; still 46% price upside despite valuing at -2SD PE. MALAYSIA Sector Plantation: MPOB Jun 20: Inventory drops to 1.90m tonnes vs market expectations of 1...
Notwithstanding the guidance for lower loss in 1QFY21, we now believe SATS’ earnings would be under pressure for a long while due to heavy exposure to the aviation segment. SATS has shored up its balance sheet with S$500m in new debt in 4QFY20 and 1QFY21, which we believe could be a stop-gap measure to fund working capital. Maintain HOLD. Target price: S$2.93. Suggested entry price: S$2.60.
GREATER CHINA Sector Cement: Prices continue to search for the bottom in the slow season. Coal: Supply tightness continues to drive up domestic coal prices. INDONESIA Update Waskita Karya (WSKT IJ/BUY/Rp710/Target: Rp820): Expect 200% hoh earnings growth in 2H20 on project completions and cost efficiencies. MALAYSIA Sector Building Materials: Cement companies have been able to stabilise their ASPs, paving the way for firmer ASPs by end-20. Maintain BUY on Hume. Gaming: Despite lower NFOs’ ticket sales in the first few draws post lifting of lockdown, expect progressive recovery in 2H20. Main...
We forecast net profit of S$935m for 2Q20, down 23.6% yoy but up 33.9% qoq. The strong sequential rebound was due to: a) MTM gains from GEH, which are reflected in increased contributions from insurance and higher net trading income, and b) moderation in credit costs by 32bp qoq to 67bp (big blow from Hin Leong in 1Q20). Progressive reopening will provide momentum for an economic recovery. We see value in OCBC with 2020F P/B at 0.9x and dividend yield at 5.6%. Maintain BUY. Target price: S$11.58.
KEY HIGHLIGHTS Update Oversea-Chinese Banking Corporation (OCBC SP/BUY/S$9.24/Target: S$11.58): 2Q20 results preview: Sequential bounce from MTM gains and moderation in credit costs. MONTHLY TECHNICAL – INDICES OUTLOOK FTSE Straits Times Index (STI IND): Could be in the process of forming higher highs and higher lows.
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