Brokers' take

Compiled by Cai Haoxiang

SINGAPORE CONSUMER| OVERWEIGHT

RHB Securities Singapore, Nov 29

We think the GST hike would not happen in the near term but may come after the current government's term of office ends. Names under our coverage that might be affected include the ones listed below.

Consumer staples: Dairy Farm and Sheng Siong should be less affected by a GST hike, given the nature of consumption of staples.

Taxes on e-commerce spending may make shopping at these brick-and-mortar supermarkets even cheaper, compared to the vendors from online market places (such as Qoo10), which may not be GST-registered.

However, we do think that consumers may cut down on festive expenditures, which are considered more discretionary.

Food retailers: BreadTalk, which runs bakeries, restaurants and high-end foodcourts, may see a slight retraction if consumers trade down to small neighbourhood bakeries and coffee shops that are not subjected to GST.

Neo Group's catering arm and food retail business may also be negatively affected.

Still, we believe the overall impact would be mitigated as the group has been trying to move upstream into the food manufacturing and food trading business.

Medical goods and healthcare services: Raffles Medical is a private healthcare provider that offers general practitioner and hospital services.

We think its general practitioner services arm would be rather resilient, as most of the patients are on corporate health insurance.

However, its hospital services segment would be less price-competitive compared to regional players.

GRAND BANKS YACHTS| NON-RATED

LAST TRADED: $ 0.31

CIMB Research, Nov 28

Grand Banks manufactures yachts ranging from 42-65 feet (under the Grand Banks and Palm Beach brands) at its yards in Malaysia and Australia.

Its end-September 2017 order book of $38.6 million was the highest in eight years, lifted by eight new boat orders received in Q1 FY2017.

The company's biggest market is the United States, which contributed 68.7 per cent of FY2017 revenue, followed by Australia (31.3 per cent).

Grand Banks now trades at 1.28 times FY 2017 price to book (with FY 2016-17 return on equity of 1-4 per cent), above its historical five-year average of 0.96 time.

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.