Compiled by Cai Haoxiang
ISDN HOLDINGS | BUY
JUNE 15 CLOSE: $0.235
TARGET PRICE: $0.35
UOB Kay Hian Research, June 15
ISDN boasts close to 30 years of experience as an integrated engineering solutions provider.
Frost & Sullivan puts the company as the No. 1 and No. 4 players in motion control (which involves high entry barriers such as technical knowledge, industry partners and human capital required) in Singapore and China respectively.
With the World Semiconductor Trade Statistics forecasting an 11.5 per cent year-on-year market growth in 2017, ISDN should benefit, thanks to its downstream semiconductor customers.
In particular, China's version of Industry 4.0 - "Made in China 2025" - will be the wave to carry ISDN forward, given its exposure to the world's factory.
With state-owned CRRC Corp critical in supplying railroad vehicles in the vast railway networks under China's Belt and Road vision, ISDN looks set to benefit with its long standing relationship supplying customised locks and hinges looks to the manufacturing giant.
At 6.8 times 2018 forecast earnings and 0.5 time 2018 forecast price to book, ISDN trades at a significant discount to its manufacturing peers.
Even conservatively forecasting its hydropower business to contribute zero profits, we can still expect adjusted attributable profits to grow at a 2016-19 compound annual growth rate of 21 per cent.
Key share price catalysts include more rewards to shareholders and more orders arising from China's Belt and Road drive.
SINGAPORE POST | HOLD (UPGRADE)
JUNE 15 CLOSE: $1.28
TARGET PRICE: $1.20
OCBC Investment Research, June 15
Given the share price correction, we upgrade our rating to "hold", keeping our fair value estimate unchanged at $1.20.
Looking ahead, there are several things to look out for:
1) level of improvement in volumes from the collaboration with Alibaba,
2) results from the review of the TradeGlobal acquisition,
3) utilisation levels at the new e-commerce logistics hub, and
4) any escalation of losses from the e-commerce division.
Credit Suisse, June 14
Compared with our early March survey, Chinese smartphones and tablets have missed expectations, whereas the iPhone has beaten them, and Samsung smartphones and personal computers have been in line.
Despite another cut in production plans by Chinese smartphone makers, we continue to expect a rebound.
iPhone production plans have also exceeded expectations since the start of June.
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