MM2 ASIA | BUY
TARGET PRICE: $0.70
MAY 24 CLOSE: $0.585
DBS Group Research, May 24
mm2 Asia reported a strong set of FY March 2017 results. Net profit for FY2017 of $18.8 million (+130 per cent) was 13 per cent above our expectations due to better margin.
Revenue came in at $95.4 million (+149 per cent). The increase in revenue was mainly due to additional revenue generated from its new subsidiary, UnUsUal, which recorded revenue of $22.6 million, and additional revenue generated from cinema business of $7.7 million.
We continue to project that mm2 will grow at an earnings per share compounded annual growth rate of 52 per cent from FY16 to FY19, underpinned by growth in productions, expansion into the China market, and contribution from UnUsUal.
SINGAPORE EXCHANGE | BUY
TARGET PRICE: S$9.10
MAY 24 CLOSE: S$7.42
RHB Research, May 24
Singapore Exchange (SGX) is nearing a deal with Singapore's Infocomm Media Development Authority (IMDA) to develop a system designed to encourage local startups to list on the bourse, according to sources.
Under the agreement, the bourse operator would help pair technology companies with investors with the aim of securing their listing in the city-state.
We assume FY18 securities average daily (traded) value of $1.35 billion, and maintain "buy" recommendation on SGX, with a target price of $9.10, pegged to 25 times FY18 earnings per share (1 standard deviation above the 2-year mean of 22.6 times).
WING TAI HOLDINGS | ADD
TARGET PRICE: S$2.05
MAY 24 CLOSE: S$1.92
CIMB Research, May 23
Wing Tai announced that it is making an unconditional voluntary takeover offer for the remaining 33.87 per cent of shares that it does not own in Wing Tai Malaysia (WTM) (excluding treasury shares).
If successful, Wing Tai does not intend to maintain WTM's listing on the main board of Bursa Malaysia.
We see this transaction as positive for Wing Tai, as it is earnings accretive by reducing minority leakage from WTM.
Furthermore, once WTM is fully owned by Wing Tai, the drag from WTM's listing discount on Wing Tai's revalued net asset value (NAV) is likely to be lifted. We estimate our revalued NAV for Wing Tai would be lifted by about 8.5 per cent if WTM's valuation is pegged to book NAV.
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