Compiled by Kenneth Lim
BUMITAMA AGRI | BUY
TARGET PRICE: $0.95 (RAISED FROM $0.85)
NOV 15 CLOSE: $0.82
RHB Research, Nov 15
Bumitama Agri's nine-month FY2017 core net profit came in at 68-70 per cent of ours and consensus FY17 forecasts respectively.
We expect Q4 earnings to come in stronger, on the back of higher fresh fruit bunches (FFB) output and lower unit costs.
Bumitama still targets to achieve 25 per cent year-on-year FFB growth for FY17, which implies a Q4FY17 output growth of 9 per cent quarter-on-quarter (q-o-q).
This, together with lower CPO unit costs due to smaller fertiliser application in the final quarter, should lead to stronger q-o-q earnings growth.
To be conservative, we trim our FFB output forecast for FY17 by 7 per cent, but raise FY18-19 projections by 3-5 per cent respectively.
We maintain our Buy recommendation and bump up the target price to $0.95.
SINGAPORE POST | HOLD
TARGET PRICE: $1.15
NOV 15 CLOSE: $1.28
Deutsche Bank Research, Nov 14
Management announced four key themes from a strategic review, three of which seemed like a rehash of the previous strategy.
We had hoped for a more aggressive focus on growing its top line and possible disposal of loss-making TradeGlobal.
Its differentiating theme on striving to be the leading e-commerce logistics player in Singapore seems too late as large corporations (Keppel Corp's Urban Fox and Amazon) have already set up their fulfilment operations.
Singapore's importance to Alibaba is slipping as Malaysia Airports and Cainiao have recently formed a regional e-commerce & logistics hub joint venture in Malaysia.
Management also appears to lack bench strength as its logistics and e-commerce divisions do not have permanent heads.
A quick turnaround is unlikely and numerous negative risks remain.
But valuations are fair, hence we maintain Hold recommendation.
YANLORD LAND GROUP | BUY
TARGET PRICE: $2.25
NOV 15 CLOSE: $1.67
DBS Group Research, Nov 15
The company's nine-month result for FY2017 was in line with expectations.
Management has guided down 2017 pre-sales target, but has a better sales outlook for 2018 with pre-sales expected to increase to 30 billion yuan (S$6.1 billion).
This will be supported by landbank replenishment at low cost.
Yanlord bought one project in Shanghai, one in Wuhan and projects in Hangzhou in 2017.
Yanlord is trading at 5.4 times FY18 price earnings and 0.6 times price-to-book value (versus historical average of 9.3 times price earnings and 1.1 times P/BV).
On top of the strong 9M17 delivery with decent margin, Yanlord's earnings visibility for FY17 is high with 27 billion yuan unrecognised sales outstanding, of which 45 per cent will be booked in 4Q17.
This matches our full-year revenue estimates. We maintain our target price of $2.25 based on 7.1 times FY18 price earnings and our Buy call.
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