Compiled by Wong Kai Yi
Y VENTURES | BUY
TARGET PRICE: $0.77
AUG 2 CLOSE: $0.50
DBS Group Research, Aug 2
Proprietary data analytics capabilities cement its position as a value-adding partner to traditional businesses.
Y Ventures Group distributes products from third-party brands over some of the largest e-commerce platforms across 10 countries.
Unlike traditional distributors and e-commerce platforms, it stands out for its provision of value-added data analytics service to brand partners, allowing it to adapt its products to the market's needs. In return, the brands offer significant price discounts to Y Ventures.
Its cryptocurrency and Aora coin plans are a wildcard but hold potential.
Through its proposed initial coin offering and launch of its cross-border purchase platform Aora, Y Ventures could be the first e-commerce platform to service the cryptocurrency community, which offers significant long-term potential (if successful).
Due to limited visibility for now, we have yet to factor this into our projections.
It is also on the lookout for strategic acquisitions or joint ventures with synergistic parties, particularly distributors with strategic alignments and investment in consumer product brands, existing channel stores and overseas joint ventures.
CHINA AVIATION OIL | BUY
TARGET PRICE: $1.80
AUG 2 CLOSE: $1.53
RHB Research, Aug 2
We assess that China Aviation Oil's (CAO's) core business of jet fuel supply to the Chinese aviation industry on a cost-plus basis registered around 13 per cent year-on-year volume growth in Q2 2018.
CAO's Q2 2018 profit was around 20 per cent above our estimate. This outperformance was largely the result of strong growth in profit from its jet fuel and gasoil trading businesses.
Profit contribution from associates registered 19 per cent year-on-year growth to US$39.6 million (S$54 million) in H1 2018.
But their contribution for Q2 came in below our expectation. Profit contributions from associates grew by a mere 2 per cent year-on-year to US$18.6 million. All associates - except Shanghai Pudong International Airport Aviation Fuel Supply Company, which offers aircraft refuelling services at Shanghai Airport - registered positive earnings growth in Q2.
We remain bullish on CAO's share price outlook, as it is on track to deliver steady earnings growth this year after a weak 2017. While we maintain our "buy" rating, we have placed our earnings estimates and target price under review pending a meeting with CAO's management on Aug 3.
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