Brokers' take

This article is more than 12 months old

Compiled by Stephanie Luo, The Business Times


OCT 26 CLOSE: $7.61

RHB, Oct 26

Singapore Exchange (SGX) reported Q1 FY18 (June) net profit of $91 million, up 9 per cent year-on-year (y-o-y). This represents 23 per cent of our FY18 net profit forecast of $397m.

Revenue rose 7 per cent and operating expenses increased 5 per cent. Operating profit margin of 52 per cent was one percentage point higher y-o-y.

Q1 FY18 securities average daily value (SADV) of $1.16 billion was a respectable 18 per cent higher y-o-y, although it was flat sequentially.

The average yield of 2.7 bps was lower than Q1 FY17's 2.89 bps, due to increased trades by market makers and liquidity providers and other products (such as structured warrants, exchange traded funds, daily leverage certificates, and others) which command lower yields.

Consequently, securities trading and clearing fees were up by a milder 9 per cent y-o-y.

SGX also offers an attractive FY18F dividend yield of 4.4 per cent (FY17: 3.7 per cent), which is higher than the Singapore sovereign 10-year bond yield of 2.17 per cent. The key risks to our recommendation include global economic and geo-political developments.


OCT 26 CLOSE: $2.19

OCBC Investment Research, Oct 26

Frasers Centrepoint Trust (FCT) reported a decent set of Q4 FY17 results which met our expectations.

Gross revenue rose 8.1 per cent y-o-y to $48.2m due largely to improvement at Northpoint City North Wing as the mall is nearing the completion of its asset enhancement initiative.

Net property income (NPI) and distribution per unit (DPU) grew 10 per cent and 5.5 per cent y-o-y to $34.6m and 2.97 Singapore cents, respectively.

For its full-year performance, FCT saw slightly lower gross revenue of $181.6m (-1.2 per cent) and this formed 100.5 per cent of our forecast.

DPU of 11.90 Singapore cents represented an increase of 1.2 per cent and constituted 100.7 per cent of our full-year projection.

This was another record high for the trust and its eleventh consecutive year of growth since its listing. We factor in FCT's full-year results in our model and make some minor adjustments to our assumptions.

Although we trim our gross revenue forecasts by approximately 1.3 per cent to 1.4 per cent, our NPI projections remain unchanged as we build in slightly higher margin assumptions.

We expect FCT to deliver another record DPU for its unitholders in FY18, with stable growth of 2.3 per cent to 12.2 Singapore cents. This translates into a distribution yield of 5.5 per cent.

Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.