Compiled by Stephanie Luo
COMFORTDELGRO | BUY
TARGET PRICE: $2.86
AUG 14 CLOSE: $2.30
Citi Research, Aug 14
Q2 17 Patmi (profit after tax and minority interests) of $79 million (-7 per cent year-on-year, -4 per cent quarter-on-quarter). 'H1 17 at 48 per cent/51 per cent of Citi/consensus FY17E estimates (2016: 45 per cent, 2015: 48 per cent), in-line with recently lowered estimates.
Lower profits on poorer taxi Ebit (earnings before interest and taxes) of $39 million (-17 per cent y-o-y, +14 per cent q-o-q), lower automotive engineering Ebit of $11 million (-16 per cent y-o-y, +14 per cent q-o-q), and unfavourable net FX movements of -$1 million (Q2 16: -$2 million, Q1 17: -$2 million), mitigated by profit contribution after full acquisition of ComfortDelgro Cabcharge Australia (completed Feb 15). Taxi challenges aside, it is well positioned to benefit from Singapore's transport modal shift from cars/taxis to trains/buses.
JADASON ENTERPRISES LIMITED | ADD
TARGET PRICE: $0.17
AUG 14 CLOSE: $0.109
CIMB, Aug 14
Although Q2 17/H1 17 net profit was only 11.2/15.4 per cent of our full-year forecast, we deem broadly in line as we expect a significant ramp-up in H2 17 earnings from its new business with a key customer gaining momentum.
Q2 17 revenue rose 42 per cent y-o-y driven by revenue growth in the printed circuit board (PCB) drilling and equipment distribution businesses. Management shared that it commenced new PCB drilling work for a key customer (Customer A) in July.
We expect this to lead to continued revenue growth and higher gross margin, as Customer A's PCBs have a 60,000-hole count (Jadason drilling charges are on per hole basis).
SINGAPORE TELECOM | OUTPERFORM
TARGET PRICE: $4.60
AUG 14 CLOSE: $3.77
Credit Suisse, Aug 14
Singapore Telecom had a soft quarter with Ebitda at -1 per cent y-o-y due to higher operating cost. Service revenue growth was strong at +8.4 per cent y-o-y largely due to consolidation of Turn while enterprise business growth was stable at ~1 per cent yoy. Cellular continues to be weak with service revenue declining by 3.9 per cent y-o-y.
Optus continued to make progress in terms of growing its subs base in both mobile and fixed. SingTel highlighted it is evaluating various options for utilising the proceeds from the NetLink Trust divestment and would provide more clarity in Q2 FY18 earnings.
We largely maintain our earnings estimates. SingTel is our preferred pick in the sector.
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