Compiled byCai Haoxiang
MM2 ASIA | BUY
FEB 8 CLOSE: $0.495
TARGET PRICE: $0.75
DBS Group Research, Feb 8
We continue to expect strong earnings compound annual growth rates of 28 per cent for 2017-20, underpinned by growth in productions, expansion into the China market and contribution from UnUsUaL.
The cinema arm, on the other hand, helps the group build a recurring income base. Having a strong presence in the entire value chain of content creation and distribution further cements mm2's status as the leader in the media and entertainment industry.
With a much larger and stronger scale, especially with the completion of the Cathay cinema acquisition, mm2 can now enjoy the synergistic benefits from the entire value chain.
We value the production business at 25 times earnings, in line with peers listed in Asia, versus consensus' valuation of about 22 times. For UnUsUaL, we value it at current valuation. For the cinema segment, we use 21 times price-to-earnings valuation peg.
NETLINK NBN TRUST | BUY
FEB 8 CLOSE: $0.83
TARGET PRICE: $0.93
UOB Kay Hian Research, Feb 7
Residential connections tracked expectations but non-residential connections beat expectations.
Ebitda (earnings before interest, taxes, depreciation and amortisation) margin at 75.7 per cent was 6.9 percentage points above the company's forecast due to lower maintenance and staff costs.
Some of the costs were deferred and could be incurred in Q4 FY18. Maintain "buy" due to NetLink's dominance in residential connections and its defensive qualities, which provide a defensive shelter against market volatilities.
OCBC Investment Research, Feb 7
With the heightened volatility, risk aversion is likely to prevail. We expect this to favour the defensive stocks and sectors such as the telecommunications and defence industries.
We see the current correction as a good opportunity to re-enter the market. While risks of further weakness remain for the near term, there are still positive drivers for equities, and supported by broad-based economic growth and healthy corporate earnings. In addition, markets have been on a strong uptrend since late last year.
We like defensive stocks such as Singtel and ST Engineering. In the property space, our picks are UOL and City Developments. In banking, DBS Bank is our pick, and we recommend accumulation on price weakness. At current price, United Overseas Bank is also a "buy".
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