YOMA STRATEGIC HOLDINGS
TARGET PRICE: $0.75
MARCH 7 CLOSE: $0.425
DBS Group Research, March 7
There is a proposed acquisition of a 34 per cent stake in Digital Money Myanmar (Wave Money) from First Myanmar Investment Company.
Wave Money is in the financial services sector to offer mobile payment solutions and services (remittance and e-wallet) in Myanmar.
The company is the first licensed provider under Myanmar's Mobile Financial Services Regulation and is permitted for foreign investment.
We believe the acquisition allows Yoma to ride on the accelerating growth demonstrated by Wave Money in the past few months as the business is just coming out of the incubation phase.
TARGET PRICE: $1.76
MARCH 7 CLOSE: $1.65
CGS-CIMB, March 6
We took Memtech's management on a non-deal roadshow to Kuala Lumpur where investors were keen to learn about its competitive edge, customer mix and project pipeline.
We remain optimistic on its earnings growth outlook, with both automotive (auto) and consumer electronics (CE) segments as the key drivers, even after the strong set of FY2017 results.
It is well positioned for the electric vehicle (EV) uptrend. We expect these projects to form a growing earnings base as they enter mass production and new orders from EV clients to offer earnings uplift in the medium term.
Order pipeline for Memtech's CE segment remains robust. We estimate CE sales to increase by 10 per cent 18 per cent a year over FY2018-2020 forecast.
FRENCKEN GROUP | BUY
TARGET PRICE: $0.72
MARCH 7 CLOSE: $0.615
KGI Securities, March 7
Following our downgrade of Frencken on Feb 26, its share price has declined 7 per cent to 62 cents.
We believe the weakness in its share price is a good opportunity to accumulate. Frencken is a good proxy for the economic expansion in the euro zone.
Frencken has guided for positive year-on-year growth in Q1 2018 across all its business segments. Interestingly, the underperforming industrial automation segment is expected to pick up due to improvement in demand for production equipment for storage drivers.
On a macro level and medium-term outlook, euro zone business activity remains at a 12-year high according to IHS Markit Purchasing Managers' Index data, providing a basis for sustained growth for the group. As a recap, about 50 per cent of its sales is derived from Europe.
We continue to like Frencken's diversified business model and list of blue-chip customers, which help provide stability in cash flows and dividend pay-outs.
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.
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Compiled by Angela Tan