2H 2020 Outlook - kgieworld.sg · 2H 2020 Outlook July 14, 2020 KGI Securities (Singapore) Pte. Ltd. indicator of hina’s shipments, narrowed its YoY decline to 11% Going into 2H

Strategy ▪ Singapore

2H 2020 Outlook

July 14, 2020 KGI Securities (Singapore) Pte. Ltd.

Going into 2H 2020, our overall view is that we still expect the environment to remain favourable for equities and precious metals such as gold. The upcoming 2Q earnings season will be a reality check for the markets but should provide a good buying opportunity for investors.

•Strong rebound in equity markets in 2Q 2020. Risk-assets such as equities have staged a strong rebound in 2Q 2020, driven mainly by the huge gains among technology stocks. While it is true that the excessive amount of liquidity provided by central banks is partly fuelling the equity rally, and widening the disconnect between the financial markets and the underlying economy, such momentum can continue to push risk assets higher if investors are forced away from safe investments such as government or investment grade bonds.

•Technology: A much bigger disruptor than COVID-19. The pandemic will likely continue to disrupt many sectors such as tourism and commercial property demand over the coming years. However, over the medium to long term, a bigger and deeper-seated challenge for many will be the disruption caused by technological development. Companies are realising they can do more with less people. Therefore, our top picks are concentrated in the technology sector, which includes AEM, Silverlake, ISDN and Frencken.

•Our other 2H 2020 top picks are China-focused stocks, ThaiBev, Singapore Medical Group and precious metals. In addition to the technology sector, we prefer companies with a higher exposure to China (two China pure-play REITs and one developer), consumer discretionary in Thailand, a small-cap Singapore medical service provider, and precious metals. Supportive fiscal and monetary policies. Even with financial conditions having improved since 1Q 2020, we expect global central banks to continue the supply of ample liquidity to support the economy in 2H 2020, possibly extending well into 2021. Furthermore, major economies such as the US have indicated that the government will support another around of stimulus measure to help companies and provide incentives for employees to go back to work. The bottom line is that this will likely support an environment that is favourable for risk assets and precious metals such as gold.

First In First Out: China’s June PMI showing a quick recovery. Business activity for June is showing a recovery from the virus-driven contraction and the global lockdowns from March to May. China is showing the most significant improvement in June 2020, continuing the recovery momentum in May when both manufacturing and services PMI came in positive. South Korea’s exports, a leading indicator of China’s shipments, narrowed its YoY decline to 11% YoY in June from the 24% YoY plunge in May 2020. Other major economies such as the US and eurozone are also reporting a sizable improvement in June’s manufacturing and services PMI, and we expect the global economies to improve off the bottom as businesses reopen.

Figure 1: Global PMI for services and manufacturing have recovered

quickly in June 2020, following the easing of lockdowns.

Source: Bloomberg, KGI Research

Unfortunately, bankruptcies and retrenchments are still unavoidable. Despite all the government support packages and quantitative easing, we still expect bankruptcies and retrenchments to rise over the coming quarters. As Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS) highlighted last month, the debt build up is probably going to be the number one aftermath of the COVID-19 pandemic, especially when banks will eventually have to start calling in the loans. Furthermore, as government job support packages begin to taper off (July/August 2020 in the US, December 2020 in Singapore), we will start to hear many more companies cutting employment and right-sizing their businesses. Company profitability expected to take until end 2022 to fully recover to pre-COVID levels. Based on consensus estimates for the 30 components of Singapore’s main benchmark, earnings for most of them are only expected to recover back to pre-COVID levels by the end of 2022 (see Figure 2). Therefore, while we remain positive on the equity market in general, stock selection will be key to outperformance. It is still important to select companies with strong balance sheets to account for the risk that demand does not recover quickly enough, or if a second wave re-emerges as we approach the winter months in the US, China and Europe.

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51.2 50.7 49.4 50.1 40.3 51.1

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48.0 35.1 23.7 36.8 47.1 52.7

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2H 2020 Outlook: Looking beyond the current pandemic KGI Singapore Research Team / 65 6202 1190 / [email protected]

2H 2020 Outlook Singapore

July 14, 2020 KGI Securities (Singapore) Pte. Ltd. 2

CONTENTS 9M2020 Recommendations Recap ......................................... 3

Technology ............................................................................. 4

Industry review ................................................................... 4

AEM .................................................................................... 5

Silverlake Axis ..................................................................... 6

ISDN .................................................................................... 6

Frencken Group .................................................................. 7

China ....................................................................................... 9

Macro Outlook .................................................................... 9

Yanlord Land ..................................................................... 12

Sasseur REIT ...................................................................... 13

EC-World REIT ................................................................... 14

Healthcare / Consumer ......................................................... 15

Singapore Medical Group ................................................. 15

ThaiBev ............................................................................. 16

Commodities: Crude oil and gold ......................................... 17

2H2020 recommendations Our recommendations for 2H2020 and catalysts for each stock are summarised below.

Company Catalyst

TECHNOLOGY

AEM (AEM SP)

Strong capex spend by Intel

Silverlake Axis (SILV SP)

Expansion of its insurance Software-as-a-Service (SaaS) in Japan, and potential new business areas from digital banking license in Malaysia

ISDN (ISDN SP)

Overdue rebound in Industrial Automation, led by China

Frencken Group (FRKN SP)

Strong order momentum from semiconductor clients, mainly ASML

CHINA

Yanlord Land (YLLG SP)

China’s strong property rebound

Sasseur REIT (SASSR SP)

Upside potential linked to China’s growing outlet retail mall sales, while offering downside protection with a fixed income component that increases 3% per annum until 2028

EC World REIT (ECWREIT SP)

The only specialised and e-commerce logistics S-REIT that provides investment access into China’s booming e-commerce industry

HEALTHCARE / CONSUMER

Singapore Medical Group (SMG SP)

Well-diversified small-cap medical services provider riding on healthy growth in Southeast Asia and Australia

ThaiBev (THBEV SP)

V-Shape in Thailand’s economic growth in 2021

COMMODITIES / PRECIOUS METALS

Shandong Gold (1787 HK)

Proxy to gold prices where we have a target of US$1,900/oz in 2020

CNOOC (883 HK)

Largest upstream oil & gas company in North Asia with the highest beta to oil prices



9M2020 RECOMMENDATIONS RECAP

Recap of our 9M2020 recommendations. Our recommendations in our 9M2020 report, published on 13 April 2020, performed well. From 13 April to 9 July 2020, the portfolio gave a total return of 20%, outperforming the STI’s 5.3% total return (inclusive of dividends).

Figure 3: 9M2020 recommendation performance


The winner goes to the technology sector. Technology stocks were the clear outperformer, with most of the gains led by AEM Holdings (our semiconductor top pick in Singapore) and Microsoft (cloud-based solutions). Strong rebound in REITS. Our four REITS picks in the retail and hospitality sectors recovered after the sell-off in March 2020. The four REITS gave a total return of 19%, inclusive of dividends, only slightly outperforming the FTSE Straits Times REIT Index by 1% points. Gold finally pays off. HK-listed stock, Shandong Gold Mining, which was our proxy for gold prices, gained 44% from 13 April – 9 July. Gold prices last week passed US$1,800 per ounce, a level not seen since 2011.

Figure 4: Shandong Gold (1787 HK) share price


CompanyTotal Return (%)

13 April-9 July

REITS

MAPLETREE COMMERCIAL TRUST 18.64

CAPITALAND MALL TRUST 19.37

ASCOTT RESIDENCE TRUST 22.62

FAR EAST HOSPITALITY TRUST 15.38

Technology

AEM HOLDINGS LTD 68.68

MICROSOFT CORP 27.78

WESTERN DIGITAL CORP -4.83

Aviation

SIA ENGINEERING CO LTD 14.86

SATS LTD -7.69

Commodities

SHANDONG GOLD MINING CO LT-H 43.92

CNOOC LTD 1.89

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Figure 2: STI components and consensus earnings consensus estimates (Bloomberg)


BBG TICKER COMPANY NAME PRICE MKT CAP

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EPS

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MLT SP Equity Mapletree Logistics Trust 2.02 7,685 0.076 0.080 0.079 5.3% 41.0

AREIT SP Equity Ascendas Real Estate Investment Trust 3.26 11,802 0.160 0.152 0.160 0.165 -5.2% 5.3% 33.4

VMS SP Equity Venture Corporation Ltd 16.76 4,848 1.260 1.078 1.215 1.271 -14.5% 12.7% 25.7

WIL SP Equity Wilmar International Ltd 4.26 27,076 0.204 0.191 0.211 0.232 -6.4% 10.5% 25.6

SGX SP Equity Singapore Exchange Ltd 8.35 8,926 0.365 0.424 0.397 0.389 16.2% -6.4% 14.5

KEP SP Equity Keppel Corp Ltd 6.06 11,032 0.389 0.385 0.448 0.508 -1.0% 16.4% 8.8

CCT SP Equity CapitaLand Commercial Trust 1.76 6,797 0.077 0.083 0.093 7.8% 7.5

STE SP Equity Singapore Technologies Engineering Ltd 3.35 10,447 0.185 0.158 0.174 0.194 -14.7% 10.1% 3.3

DFI SP Equity Dairy Farm International Holdings 4.85 6,561 0.256 0.221 0.276 0.322 -13.8% 24.9% 3.2

YZJSGD SP EquityYangzijiang Shipbuilding Holdings Ltd 0.95 3,703 0.789 0.677 0.700 0.684 -14.2% 3.4% 2.5

OCBC SP Equity Oversea-Chinese Banking Corp Ltd 9.25 40,748 1.097 0.824 0.880 1.083 -24.9% 6.8% 2.4

GENS SP Equity Genting Singapore PLC 0.77 9,290 0.057 0.005 0.044 0.051 -91.2% 780.0% 1.7

DBS SP Equity DBS Group Holdings Ltd 21.65 54,971 2.468 1.915 2.030 2.402 -22.4% 6.0% 1.6

UOL SP Equity UOL Group Ltd 6.89 5,813 0.568 0.364 0.475 0.472 -35.9% 30.5% 0.6

CT SP Equity CapitaLand Mall Trust 2.02 7,454 0.120 0.085 0.114 0.114 -29.0% 34.1% (0.2)

MCT SP Equity Mapletree Commercial Trust 1.96 6,493 0.078 0.096 0.090 23.1% (0.4)

UOB SP Equity United Overseas Bank Ltd 21.00 35,058 2.452 1.811 1.937 2.406 -26.1% 7.0% (2.5)

CIT SP Equity City Developments 8.71 7,899 0.608 0.481 0.635 0.704 -20.9% 32.0% (2.7)

SCI SP Equity Sembcorp Industries Ltd 1.82 3,251 0.109 0.166 0.219 0.258 51.6% 31.9% (3.4)

THBEV SP Equity Thai Beverage PCL 0.71 17,707 0.938 0.893 1.003 1.102 -4.8% 12.3% (3.8)

CAPL SP Equity CapitaLand Ltd 2.91 14,702 0.229 0.199 0.232 0.277 -13.3% 16.6% (5.7)

JM SP Equity Jardine Matheson Holdings Ltd 41.70 30,633 4.230 3.803 4.293 4.660 -10.1% 12.9% (8.9)

ST SP Equity Singapore Telecommunications Ltd 2.51 40,986 0.150 0.162 0.173 0.202 7.7% 6.8% (9.5)

HKL SP Equity Hongkong Land Holdings Ltd 4.04 9,429 0.461 0.436 0.441 0.452 -5.5% 1.1% (14.6)

JCNC SP Equity Jardine Cycle & Carriage Ltd 20.48 8,094 2.230 1.160 1.883 2.313 -48.0% 62.3% (17.3)

JS SP Equity Jardine Strategic Holdings Ltd 20.76 23,008 2.980 2.995 3.135 3.313 0.5% 4.7% (17.7)

CD SP Equity ComfortDelGro Corp Ltd 1.47 3,185 0.068 0.108 0.120 58.8% (25.0)

SIA SP Equity Singapore Airlines Ltd 3.81 11,288 -0.126 -0.552 0.059 0.195 337.7% -110.7% (27.3)

SATS SP Equity SATS Ltd 2.88 3,219 0.217 -0.024 0.092 0.150 -111.1% -483.3% (30.8)



TECHNOLOGY

Industry review Kenny Tan / 6202 1196 / [email protected]

We have briefly covered the industry rally across the semiconductor back-end test segment in our last AEM report, but updates across the sector have affirmed that the semiconductor industry has held up well against COVID-19. Semiconductor billings are slightly higher YoY with 4M20 billings being 6% above 4M19, while semiconductor capital equipment has also seen strong pick-up in order momentum, where 4M20 billings is 17% higher YoY. The increase in inventory days, while attributable to supply chain delays from COVID-19, is also part of a natural lull with seasonal trends, where the first half of the year tends to be higher than the second half.

Figure 5: 2020’s semiconductor billings exceed 2019’s despite COVID-19

Source: WSTS, KGI Research

Figure 6: Inventory days climb in COVID-19. Top = IDM+Fabless+Foundry.

Middle = Front End SemiCap. Bottom = Back End + APC SemiCap


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Figure 7: Semiconductor equipment billings trend indicates trough in 2019 as 2020 data shows YoY improvement

Source: SEMI, KGI Research

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https://www.kgieworld.sg/securities/resources/ck/files/sg-report/AEM%20Holdings%20(AEM%20SP)_1Q20_Maintain%20OUTPERFORM_KGI%20Singapore%2020200514.pdf



AEM Kenny Tan / 6202 1196 / [email protected]

We continue to observe strong tailwinds for AEM, despite rising competition from Advantest in 2020. Advantest has stepped up efforts in gaining System Level Test (SLT) capabilities, with the acquisition of Essai in January 2020. We expect the development to have little to no impact with AEM’s main customer, as Intel does not reappear as a key customer on Advantest’s FY19 statements. However, given Advantest’s branding, this is likely to have medium to long term impact on AEM’s overall market share of the SLT business. We also note that Intel has reappeared on Cohu’s financial statements as a key customer in FY19, with close to USD 65 mn of sales. Key upside: Further order book wins, onboarding of major customers. We see China’s semiconductor master plan take place in the form of SMIC’s US 6.6bn share sale, which was priced at a premium but highly subscribed by institutional investors. While China’s overall goal is to seek self-sufficiency in the semiconductor industry, we think AEM remains a potential beneficiary, given the company and country’s relatively neutral geopolitical standing between China and US. Key downside: Competitors’ R&D, Huawei sanctions – the uncertainty behind it will not only delays base station and AEM’s tester kit rollouts, but also lead to the loss of potential customers, whom may look towards other 5G equipment makers like Ericsson. However, impact is minimal on our target price, which remains at S$3.61.

Figure 8: Wafer fab utilization rates have picked up again in May and June

Source: VLSI Research

Figure 9: Advantest dedicates more resources into SLT

Source: Company data

Figure 10: VLSI’s latest forecasts as of June 2020

Source: VLSI Research



Silverlake Axis Kenny Tan / 6202 1196 / [email protected]

We initiated on Silverlake last week with an OUTPERFORM recommendation and a target price of S$0.30. Silverlake’s share price has fallen substantially over the past year, even pre COVID-19. A combination of weaker business conditions, as well as reduced tax subsidies, has resulted in a tougher operating environment for Silverlake. Current trading bands hover between 8 – 10x historic P/E, which is fairly pessimistic for a stable business. Even with an impending estimated 32% cut to earnings, we see upside from Silverlake’s Software-as-a-Service pivot, as well as potential contract wins from taking on projects related to digital banking and services, all which continue to build on Silverlake’s recurring revenue stream. You can read more from our initiation here.

Figure 11: Silverlake currently trades at -1 S.D. of 5-year average P/E,


ISDN Kenny Tan / 6202 1196 / [email protected]

Formed in 1986, ISDN is an engineering solutions company specialising in industrial automation (IA), working through the entire engineering stage from conceptualisation to production and after-sales engineering support. ISDN has their bulk of sales from China, supporting over 10,000 clients with both hardware and software solutions. IA has had a substantial downcycle, which was further dragged down by COVID-19 and US-China trade tensions. Orders from Japan Machine Tool Builders’ Association (JMTBA) illustrate the prolonged downcycle, where the latest released May data is likely to be the bottom, with a sharp QoQ % rebound. While global demand for IA is likely to remain sluggish, we think China will be the first to revive the industry, in alignment with its focus on digitalization and transformation away from labour and into tech. We expect upgrades to traditional industrial factories to become smarter, equipped with higher levels of automation and enabled by 5G, AI and IoT. These plans, while an ongoing process, are now further catalysed by the increased safety measures placed on human labour, such as the need for social distancing.

Based on latest results, a Chinese rebound may have occurred as IA peers have reported strong orders or sales from China. Yaskawa’s latest financial statements were released on 10 July, stating sales improvement from China in the Motion Control and Robotics segment. The rebound may have occurred as early as late March, as Schneider Electric and a few other major IA players report improving sales from China towards the end of 1Q20, with a positive China outlook.

Figure 12: Some major IA players saw light business recovery in China in

1Q20

Source: Company data, KGI Research

Figure 13: Schneider Electric saw China’s sales pick up towards end of 1Q20


As such, we think ISDN, whose share price has rebounded from the March sell-down, is poised for a substantial pick up in order book and sales. ISDN trades at undemanding valuations of 8x PE and 4-5x EV/EBITDA, substantially below global peers, and stands to gain from both China’s transformation plan and from the strength of the semiconductor industry.

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https://www.kgieworld.sg/securities/resources/ck/files/sg-report/Silverlake%20Axis%20(SILV%20SP)_Initiation%20OUTPERFORM_KGI%20Singapore%2020200709.pdf



Figure 14: Prolonged downcycle in Japanese machine tool orders; trend reversal seen in May; likely bottomed out

Source: JMTBA, KGI Research

Frencken Group Joel Ng / 6202 1192 / [email protected]

Leveraged to the right sector. We have an OUTPERFORM recommendation on Frencken Group (FRKN SP), and a fair value of S$1.01 based on a conservative 10x FY20F earnings. This is a 20% discount to peers’ P/E. At only 4.0x EV/EBITDA, Frencken is an attractive takeover target for Asian-based companies looking to diversify to Europe and the US. Key customer is flying high. Frencken’s key client is Dutch-based ASML, the dominant player for Lithography systems used by companies in the semiconductor industry. ASML’s CEO guided that its 2Q20 sales would be 50% higher QoQ if not for the disruption caused by COVID-19. While ASML said demand for its products remained strong, the company stopped short of giving a 2Q20 and full-year guidance due to the uncertainties in the market. We think the near-term weakness due to supply-chain disruptions are already priced in by the markets as ASML’s share price made new highs this month.

Well-diversified to other technology and healthcare companies. In addition to ASML, Frencken counts many market-leading companies including Philips, Siemens, Seagate and ThermoFisher as its customers. The group has continued to gain market share with its customers over the years, riding on long-term trends such as the next generation 5G broadband network, and the move to cloud services, now accelerated by the COVID-19 disruptions.

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Figure 15: Frencken is among the cheapest technology-manufacturers in Singapore


BBG Ticker CompanyLast price

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FRKN SP Frencken 0.94 399.8 1.4 15.1 4.8 8.1 8.8 (53.6)

VMS SP Venture 16.64 4,813.4 1.8 13.1 10.7 12.9 15.5 (685.5)

AEM SP AEM 3.21 880.5 5.0 61.2 7.1 10.4 10.3 (105.5)

HIP SP HI-P 1.29 1,041.0 1.7 13.9 5.8 15.3 17.7 (181.3)

UMSH SP UMS 0.94 498.8 2.0 15.3 9.4 16.5 12.8 (21.1)

VALUE SP Valuetronics 0.58 250.1 1.2 18.6 1.8 6.7 10.5 (193.0)

FUYU SP Fu Yu 0.24 177.0 1.1 7.7 3.5 15.1 13.1 (79.1)

SUNN SP Sunningdale 1.03 197.7 0.5 2.1 7.3 31.7 – 23.8

Average 1.9 18.9 6.5 15.5 13.3



Figure 16: Frencken’s business is driven by the strong recovery in semiconductor equipment


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R E V E N U E S ( S $ ' 0 0 0 )

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CHINA We recommend to OVERWEIGHT China and Hong Kong and underweight US in 2H 2020.

Macro Outlook Chen Guangzhi, CFA / 6202 1191 / [email protected]

Flash recession. It has been five months since the outbreak of the COVID-19 pandemic; by the end of June 2020, global infections has surpassed 10mn, and the death toll more than 500k. In retrospect, we summarise three transformations in terms of the global development against the backdrop of an unprecedented public health crisis worldwide in 1H20. 1. Social distancing. Throughout history, there have been a

number of pandemics, but there has never been one like COVID-19. While COVID-19 is neither the deadliest virus nor the most contagious disease, the greatest difference is that this time the pandemic broke out globally, when population density is unprecedentedly high; traffic is extremely heavy, and human activity is collectively intensive. In order to reduce and prevent contagion, countries introduced draconian quarantine and lockdown measures of various extents which resulted in the shutdown of economic activities for a quarter of a year. Even though economies gradually reopened amid rising infection cases, social distancing remains and could become a social norm. Before a total containment of COVID-19, the possibility of which epidemiologists have cast doubt on, restrictions on physical contact will not be lifted. In other words, work and life will not resume to what they were before COVID-19, at least not in the near term. What matters is once the social orders adapt to social distancing, there is little willingness and a great cost to restore. The implication is that businesses that rely on customer flows have to either increase the revenue per customer or optimise the operating costs to maintain its performance, given that the turnover rate of customers will substantially fall.

2. Deglobalisation. There is no clear watershed that marks

the beginning of the deglobalisation trend. But the acceleration of which started in late 2018 when US-China trade tensions surfaced. Deglobalisation is reflected in every aspect including economy, politics, culture, and military and so forth. Here we mainly refer to the economic impact. COVID-19 is an evident catalyst that further boost the trend of deglobalisation. The initial outbreak in China resulted in the supply chain disruption during February and March sent the world a wake-up call that the lack of regionally diversified suppliers is a huge operational risk. Moving forward, multinational companies will accelerate the establishment of extra production lines outside China which has been the world’s factory for decades. Meanwhile, protectionism continues to be strengthened, propelled by the geopolitical tensions. To battle with the COVID-19 pandemic, each country’s government prioritises lives over its economy. However, livelihoods are the base stone of sovereignty. Therefore,

developing and enhancing a self-sustained and self-reliant economy to favour the domestic job market is an effective way to regain trust for the authority who has been blamed for mishandling the prevention of the virus. The ensuing domino effects are rising trade tensions and sanctions. The implication is that multinational companies with large exposures in the countries subject to geopolitical tensions have higher operational risks that could negatively impact the performance. Meanwhile, companies that mainly target the domestic market and have their supply chains domestically located too, enjoy several tailwinds such as policy support, increasing domestic demand driven by national sentiment, and production flexibility that is less impacted by the disruptions.

3. New economy gains more dominant positions,

opportunities burgeon in the crisis. Recall the E-commerce industry boom post-SARS back in 2003 – Taobao, the biggest online shopping platform was founded in May 2003. Tencent, one of the largest Internet companies in China, was listed in June 2004. The golden era of the technology industry took off from then on. This time, the COVID-19 crisis is more than ten times worse than SARS in 2003 in terms of the infection scale. Again, we see the technology sector rising and taking advantage of the public health crisis. Prevention and detection of COVID-19 is yet another perfectly applicable prospect for big data and artificial intelligence. The shutdown of malls accelerates online shopping, overtaking brick-and-mortar shops. Moreover, influencer marketing, which is declared a novel career by China’s authority has benefited phenomenally from the lockdown of cities. Needless to say, logistics services start to evolve with the need for unmanned delivery via robots. Working from home further boosts the demand for cloud services and video conferencing. In a nutshell, technology plays a pivotal role in providing options to adapt to a disrupted lifestyle during this period, and subsequently helps to maintain social order in a subtle way. The implication is that new economies will continue to be the driver that attracts talent, capital, and government support.

China markets are more attractive than US ones. In June, the World Bank updated the 2020 global GDP forecast which indicates a 5.2% contraction this year. Advanced economies are expected to suffer from a 7% decline in output while emerging market will moderately shrink by 2.5%. Here we only focus on the US and China as they represent the largest developed and developing economy respectively. China, the earliest epicentre of the outbreak, has managed to contain the coronavirus within two months and resumed on its path of economic growth in April. Although there were some scattered cluster infections in several cities after the number of new cases dropped below 100 per day in mid-April, production and operating activities were barely affected and have been on track of catching up.



Figure 17: Accumulated and daily increment of COVID-19 infection in

China

Source: CEIC, KGI Research

The outbreak began in the US in late February. Although following similar lockdown measures, they failed to contain the pandemic effectively and efficiently. The daily positive infection cases jumped after mid-June, seemingly forming a second wave of contagion domestically. Though the US has gradually re-opened its economy, the recovery seems to be bumpy as some states and cities recommended further lockdown in June/July.

Figure 18: Accumulated and daily increment of COVID-19 infection in US

Source: CEIC, KGI Research

Containment of COVID-19 is the prerequisite of the complete resumption of production and business. China suffered from the short-term pain that the economy was almost halted for two months but benefited from a brisk restoration of normalcy. However, the lockdown and social distancing measure in US are relatively compromising since administrative regulations have weak restrictions on an individual’s travel habits. US is still facing the dilemma between full re-opening and rising infections. In a nutshell, China’s economic recovery is moving ahead of US whose outlook uncertainty remains.

Figure 19: CEIC leading indicator for China and US

*Components in each leading indicator

China US

Components Weight Components Weight Purchasing Managers Index 15% Housing Market Index 11%

Floor Space Sold: Commodity Buildings 16% Consumer Confidence

Index 9%

Industrial Production: Automobiles 15% S&P 500 9%

Short Term Interest Rate 11% PMI 7%

Deposits 11% Federal Funds Rate 3% Money Supply: M2 12% Motor Vehicle Sales 9% FDI: No of Contracts 12% Initial Jobless Claims 11% Real Effective Exchange Rate 14% Average Hours Worked 10%

Capacity Utilization 6%

Building Permits 11%

Inventories to Shipments Ratio 11%

New Orders 5%

Source: CEIC, KGI Research CEIC, KGI Research

The International Monetary Fund revised the global and regional GDP growth forecast in June, and of which China will be the only major economy that retains a positive growth of 1% YoY while the US economy is expected to contract 8% YoY in 2020. Therefore, China will further narrow the gap of the economic scale between the US and itself. Fundamentally, China only had a flash recession in 1H20 and showed the strong resiliency afterwards. US is expected to fully recover in 2H21 or even later. Hence, China provides a more convincing and solid economic foundation for its market performance. Economic stimulus to combat COVID-19. In retrospect, both developing and emerging markets have adopted loosening monetary policies immediately to support the economies. China is more cautious of large-scale stimulus, and it only moderately injected RMB1.7tn (1.7% of 2019 GDP) and provided extra RMB800bn credit support for SMEs. US is more generous that it injected more than USD6tn (27% of 2019 GDP). To complement the expansionary monetary policies, both countries also launched fiscal stimulus plans to boost demand. China mainly focussed on new infrastructure expansion, especially the seven sectors (5G networks, industrial internet, inter-city transportation and inner-city rail systems, data centres, artificial intelligence, ultra-high voltage, and new



energy vehicle charging stations). To put it simply, the revitalisation of the economy is directed by government spending which is similar to what the authorities did during the GFC. But the difference is that future demands for the new capacity in these areas are much greater than the traditional infrastructure like real estate and high-speed rail back in 2008. China’s RMB1trn budget for the new infrastructure spending is just the start of the reform and upgrade of its economic structure in the post-COVID era. US, on the other hand, differs from China. It will also budget about USD1tn for infrastructure spending, but most of which is expected to be reserved for traditional projects. Besides, the authorities have been directly and indirectly subsidizing individuals and SMEs over the past three months. US is prone to boosting consumption which is not as effective as movement spending at the moment since high unemployment and weak consumer sentiment will deter large amounts of spending. Only when the infrastructure program pans out, which enables an improvement in the job market in the near term, will the ensuing significant increase in consumption will be realized. We think China will be more buoyant in 2H20. China has envisioned the new strategic growth in the post-COVID period to ride on the transformation of the world we discussed above. The bullish equity market has a strong foundation and reasonable expectation support. US as the leading power in technology, shares the same catalyst, but the overall economy is more reliant on consumption whose recovery lags behind manufacturing. Therefore, we could only see the US economy to reach pre-COVID levels not earlier than 2H21.

Figure 20: China credit impulse grows again


Figure 21: Feb total asset reaches an all-time high


Valuation comparison Based on PER, we find that China and Hong Kong markets are more attractive in terms of valuation. The P/E of Shanghai Composite Index almost reached 25x right before the bubble burst in 2015, and that was the lowest high compared to the previous cycles. As of 10th July, the P/E was trading at slightly above 17x. Likewise, Shenzhen Component Index PER is currently trading at 33x compared to the 2015 high of 56x. Hong Kong market, subject to political issues, is 20% from the last highs in 2017 and 2018.

Figure 22: Shanghai Composite Index trailing PER


Figure 23: Shenzhen Component index trailing PER


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Figure 24: Hang Seng Index trailing PER


However, US markets are relatively expensive. The three major indices are approaching the highs in 2017 and 2018. Specifically, Nasdaq has overshot the upper bound of one standard deviation. This is the most evident disconnect between the economy and the market. S&P 500’s PER is less than 10% from the high before GFC. Dow is 5% away from the high before GFC. Nasdaq is 4% away from the previous high in 2018. Given the gloomy economic outlook, US markets are likely to have a correction in the near term.

Figure 25: S&P 500 Index trailing PER


Figure 26: Dow Jones Industrial Average Index trailing PER


Figure 27: NASDAQ Composite Index trailing PER

*The average and standard deviation gauge since Jan-03 Source: Bloomberg, KGI Research We recommend to overweight China and Hong Kong and underweight US in 2H 2020. China and Hong Kong have more visibility of reviving the economy as the pandemic is almost contained while US is still facing the dilemma of rising infection cases and reopening of the economy. The current movement of the equity market has just started to factor in the positive outlook in China and Hong Kong. But the US markets have priced in the best-case scenario that the V-shape rebound will continue unabated.

Yanlord Land Kenny Tan / 6202 1196 / [email protected]

We initiated on Yanlord two weeks ago with an OUTPERFORM recommendation and a target price range of S$1.50 – S$1.70, citing strong May 2020 pre-sales figures and a steadfast Chinese property market. June 2020 pre-sales data has recently been released, and Yanlord’s 6M20 pre-sales data is +65% YoY, compounding upon the outperformance of the residential property sector alongside fellow Chinese property developers despite the troubling economic situation. We think Yanlord is likely able to exceed their RMB 70 bn pre-sales target set for this year. After a ~14% price gain in the past 2 weeks, Yanlord still trades at < 0.5x P/B, and remains at steep discount versus Chinese and locally listed property developers. Read our initiation here.

Figure 28: Global X MSCI China Real Estate ETF (CHIR) gains 13% from June

30 lows

Source: Tradingview, KGI Research

https://www.kgieworld.sg/securities/resources/ck/files/sg-report/Yanlord%20Land%20Group%20(YLLG%20SP)_Initiation%20OUTPERFORM_KGI%20Singapore%2020200629.pdf



Sasseur REIT Joel Ng / 6202 1192 / [email protected]

We have an OUTPERFORM on Sasseur REIT (Sasseur) with a TP of S$0.89. Although structured liked a REIT, Sasseur generates rents mainly through a sales-based system whereby tenants pay an agreed percentage of their sales revenue to the sponsor. Sasseur, therefore, allows investors to invest into a proxy of China's outlet retail spending, the country's fastest growing retail segment. Furthermore, its four outlet malls are located in fast growing Tier-2 cities of Chongqing, Hefei and Kunming. Demand is primarily driven by China's growing disposable income per capita. E-commerce? No sweat. Even with the growing e-commerce trend and the decade-long disruption to traditional retail malls, many shoppers are still reluctant to buy big ticket items (defined as above RMB 1,000 per item) online. As such, Sasseur has managed to thrive despite the disruption to the retail industry, as it ensures that all the products at its outlet malls are genuine, with harsh penalties imposed on merchants found selling counterfeit goods. DPU downside protection; upside potential. Sasseur's income is generated through its fixed income component and a variable income component. The fixed income component grows at 3% per annum until 2018, while 4.0-5.5% of the total sales of its four outlets contributes to the variable income component. The ratio in the first year following its IPO was 70% fixed and 30% variable. Overseas ban a boon. As COVID-19 cuts into overseas trips spending, domestic shopping by residents may potentially get a lift, helped by supportive government policies. China's Labour Day holidays in May 2020 showed the government's willingness to boost local consumption. Examples included authorities in Shanghai collaborating with internet companies and retailers to promote Double Five Shopping Festival from 30 April onwards. In Beijing, shoppers can use e-coupons offered by the local government and retailers to enjoy discounts over the following two months. Furthermore, the yuan's decline against the USD and Yen may incentivise shoppers to spend on domestic activities. Holidaying at the malls. Sasseur outlet malls are designed to pull in shoppers by offering a holistic experience, with activities such as an indoor zoo, children's playgrounds, and sports concepts. As such, we believe that Sasseur's malls stand to recover quickly post the 44-49 days lockdowns of its malls in 1Q20. While 1Q20 sales declined 56% YoY to RMB 535mn and resulted in a 19% YoY drop in DPU, it has opted to pay 100% of distributable income and has not retained any cash. We think this is only possible as the REIT's occupancy was stable at 95% (a slight decline of 1.2% pts), and shows the positive momentum that management sees going into 2Q20. Since March, China has resumed most economic activities following the lockdown in January and March. The country is showing signs of a V-shaped recovery, only tapered by slowing demand in its key overseas export markets in 2Q20.

We expect Sasseur’s performance to be less impacted by external events, and more likely to benefit from supportive government measures to boost domestic consumption. All Sasseur's four malls were gradually opened after 11 March 2020. While taking all precautionary measures to ensure safety after the temporary closures, pent up demand was evident as first day sales for its four malls were 129% YoY higher.

Figure 29: All outlets were temporary closed for 44-49 days but recorded

significant first day sales upon opening

Outlet Mall Reopening Date

Temporary Closure Period

First Day Reopening Sales (RMB'

million)

Compared to Corresponding Date in 2019

Kunming 11 March 2020

44 days 1.90 +171%

Hefei 13 March 2020

46 days 2.00 +57%

Chongqing 15 March 2020

49 days 5.64 +132%

Bishan 15 March 2020

49 days 1.92 +228%

Total 11.46 +129%


Positive momentum going into the second half. The pace of China's retail sales decline improved in April. China reported a 7.5% YoY decline in overall retail sales in April, an improvement from the 16% YoY and 21% YoY plunge in March and February, respectively. We expect the momentum to pick up going into 2H2020 as local governments launch stimulus packages to spur consumption, and as spending is diverted from the restrictions on overseas travel, which is likely to last until the end of the year. Overall, there seems to be better demand visibility in China's post-COVID recovery compared to other countries, given its large domestic market.

Figure 30: China's discretionary spending continued to decline in April,

but at a slower pace vs March. Data includes both offline and online

physical goods revenue.

Key discretionary sales

April YoY (%) March YoY (%) Jan-Feb YoY (%)

Home Appliances -9 -30 -30

Home Furnishings -5 -23 -34

Gold & Jewelry -12 -30 -41

Apparel & Footwear -19 -35 -31

Cosmetics +4 -12 -14

Source: Bloomberg, KGI Research Sequential improvement in sales



EC-World REIT Amirah Yusoff / 6202 1195 / [email protected]

Reiterate OUTPERFORM with 12M TP of S$0.73. EC World REIT is the only specialized and e-commerce logistics S-REIT that provides investment access into China’s booming e-commerce industry. c.40% of its investment assets (by AUM valuation) are also quality port logistics assets with prime and coveted access to the Beijing-Hangzhou Grand Canal due to recent UNESCO Heritage Site zonings.

EC World REIT also has the established and capable Forchn Holdings Group co as its sponsor, who was also one of the founding members of Cainiao Network Tech Co Ltd., along with partners Alibaba Group and Fosun Group. We believe that with the support and guidance of its sponsor, there is still a long runway for future growth and expansion. All tenants are back to pre-COVID operation levels as of June 2020. The second wave of outbreak in Beijing has not affected any of the assets or tenants, and there has been no cases reported in Hangzhou. The lease renewal for Hengde Logistics, expiring in October 2020, is also on track and in progress, although rental reversions are likely to be flat. Our valuations have factored in a slower reversion rate and a slightly higher cost of capital due to the uncertainties relating to China’s economy especially relating to the US-China trade war. Our current TP of S$0.73 represents an upside of 22.5% (incl. FY20F div yield of 8.4%).

Figure 31: ECW financials & key operating statistics

Source: ECW, KGI Research

Joint investigation by CAD and MAS into Chief Investment Officer (CIO) Mr Li Jinbo. As per the recent announcement published on SGX on 2 July 2020, ECW has been required to provide certain information, documents and electronic devices (presumably items such as laptops) in relation to an investigation into Mr Li Jinbo. The investigation relates to an alleged offence under the Securities and Futures Act, Chapter 289, which refers to “the regulation of activities and institutions in the securities and derivatives industry, including leveraged foreign exchange trading, of financial benchmarks and of clearing facilities, and for matters connected therewith.” We highlight that the CAD has indicated that ECW and its Manager are not under investigation, and have also received no further information or details regarding the investigation into Mr Li Jinbo. We further note that should Mr Li have been involved in any unauthorised or illegal transactions in relation to any of the

REIT’s properties, the REIT and its Manager would have likely been included in the investigations by CAD. CAD’s request for the provision of company documents and items relating to Mr Li’s work is a common part of any investigation procedure relating to an individual. As a result, unless implicated by Mr Li, and pending further information by CAD, MAS or ECW, we remain doubtful that the investigation has any relation to the REIT or any of its properties. Management has also been forthcoming and proactive in communicating that they do not believe that the investigation is related to the REIT’s activities and assets. We understand that Mr Li’s absence at this time will have no effect on the REIT’s operations, nor negotiations for renewal of Hengde Logistics’ lease with state-owned enterprise (SOE) China Tobacco Zhejiang Industrial Co., Ltd, as Mr Goh Toh Sim, CEO, as well as Mr Teo Kah Ming, VP for Investment and Asset Management, are more than able to take on Mr Li’s responsibilities. High income visibility. Nonetheless, ECW’s portfolio is well-diversified into the three main logistics segments: Port, Specialised, and E-Commerce logistics, lending stability to its income. Most notably, we see the e-commerce space to be a key driver for ECW, particularly since China has quickly emerged as a global leader in e-commerce with the rise of technology (which has been further catalyzed in recent months with the outbreak of the global pandemic). This inevitably translates into demand for e-commerce logistics assets, which represent 40% of ECW’s portfolio. Demand is further amplified with insufficient supply, especially in Hangzhou, one of the largest e-commerce hubs in China, where some of the largest online retail platforms, including the Alibaba Group, are headquartered. With support, too, from the Chinese government to propel the e-commerce and technology space in the coming years, we believe that ECW’s assets are well-positioned to capture the vast growth opportunities.

Figure 32: ECW AUM valuation breakdown by asset and logistic segment

Source: ECW, KGI Research

Financials & Key Operating Statistics

YE Dec SGD mn 2018 2019 2020F 2021F 2022F

Gross revenue 96.2 99.1 102.6 104.9 106.7 Net property income 87.3 89.7 94.0 96.0 97.7 Distributable income 49.0 48.9 45.0 46.6 47.2 DPU (SGD cents) 6.2 6.0 5.4 5.7 5.8 DPU growth (%) 2.2 -1.8 -10.9 5.4 1.3Div Yield (%) 9.9 9.8 8.7 9.2 9.3 NAV (S$) 0.9 0.9 0.8 0.8 0.8 Price / Book (x) 0.7 0.7 0.7 0.8 0.8 NPI Margin (%) 90.8 90.5 91.6 91.5 91.5 Net Margin (%) 48.8 65.8 33.1 33.1 33.3 Gearing (%) - 37.4 37.3 37.3 37.3 ROE (%) 6.6 6.8 9.5 5.0 5.1 Source: ECW, KGI Research



HEALTHCARE / CONSUMER

Singapore Medical Group Amirah Yusoff / 6202 1195 / [email protected]

Attractive value. We initiated on Singapore Medical Group (SMG) on July 8th 2020 with an OUTPERFORM rating, and a target price (TP) of S$0.34. Our TP represents a total upside of 39.0%, inclusive of FY21F dividend yield of 1.4%. We assigned a fair, given the limited downside risks, but conservative 11x FY21F P/E based on its 1-year historical average and more than 30% discount to its peer averages.

Figure 33: SMG financials & key operating statistics

Source: SMG, KGI Research

In Singapore, SMG has solidified its presence as a leading healthcare provider, with four main pillars, namely Aesthetics, Diagnostic Imaging & Screening, Oncology and Women’s and Children’s Health. With a diverse network of specialist healthcare services spread across more than 30 clinics in key locations such as Paragon, Punggol and Bishan, we think that the Group’s ability to promote cross-selling opportunities among its segments are enhanced and will be a catalyst for organic growth locally. A key risk however, is that 20% of SMG’s revenues are dependent on medical tourism which may return later rather than sooner given the current situation not only in Singapore but also in our neighbouring countries. However, it seems that the Group’s clinics in Singapore have been recovering well since the easing of circuit breaker restrictions, and management has indicated that it is unlikely to register a loss in 2Q20, given the ample government aids and subsidies in recent months.

Figure 34: SMG’s brands and clinics

Source: SMG Annual Report 2019

Aggressive overseas expansion is a promising catalyst. SMG embarked on a rapid expansion drive since 2013 and has continued since to expand beyond Singapore and establish its presence in Indonesia, Vietnam and Australia. Its Ciputra SMG Eye Clinic is one of the largest LASIK centres in Jakarta and continues to be highly profitable, while its CarePlus Vietnam clinics in the heart of Ho Chi Minh city have been steadily gaining traction, with revenues growing 100% YoY. While the Group’s stake remains relatively muted at 40% and 25.7% in the respective joint ventures, we see incredible positive tailwinds in Indonesia and Vietnam: a booming middle class, a relatively young population, and strong economic growth (the IMF has projected some 8.2% and 7.0% growth for Indonesia and Vietnam in 2021) that will continue to boost demand for private healthcare and services beyond the essential. In Australia, the CHA-SMG partnership continues to grow its fertility and women’s health platform through its majority stake in City Fertility Australia. With disposable income at an all-time high and supportive government policies, fertility treatment is not only accessible, but sought after. Infertility is said to affect about 1 in every 6 Australian couples of reproductive age according to Health Direct Australia, but with IVF success rates climbing, the University of New South Wales (USNW) reports that one in 25 Australian babies are now born via IVF. We also recognize that current investor preferences lie in the medical supplies and consumables sector as compared to hospital and healthcare services, but we believe that this should rotate back once the COVID-19 situation normalises in the short to medium term. With Asia-Pacific’s developing healthcare landscape expanding at a rate almost double that of the rest of the world over the next decade, we believe that SMG is primed and positioned for success. Also in partnership with its largest shareholder and partner CHA Healthcare Singapore Pte Ltd (an international subsidiary of leading Korean healthcare group CHA Health Systems), we believe that the duo will catalyse SMG’s growth to become a part of the largest fertility and women’s health platform in the Asia Pacific region.

Figure 35: SMG 1-year P/E ratio


Financials & Key Operating Statistics

YE Dec (S$ m) 2018 2019 2020F 2021F 2022F

Revenue 85 95 77 98 118

PATMI 13 14 11 15 19

EPS (cents) 2.74 2.83 2.33 3.06 3.90

EPS growth (%) 35.9 3.3 (17.9) 31.8 27.2

DPS (Sing cents) – 0.4 0.3 0.6 0.8

Div Yield (Y%) 0.0 1.6 1.4 2.5 3.2

Net Profit Margin (%) 15.2 14.4 14.6 15.1 15.9

Net Gearing (%) NC NC NC NC NC

Price/Book (x) 0.9 0.8 0.7 0.7 0.6

ROE (%) 9.9 9.4 7.0 8.7 10.3


5

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1 YR P/E RATIO AVERAGE SD -1 SD + 1

https://www.kgieworld.sg/securities/resources/ck/files/sg-report/Singapore%20Medical%20Group%20(SMG%20SP)_Initiation%20OUTPERFORM_KGI%20Singapore%2020200708(1).pdf



ThaiBev Joel Ng / 6202 1192 / [email protected]

ThaiBev (Outperform TP S$0.96): Cheers to a better 2021. We re-iterate our ThaiBev OUTPERFORM recommendation as we remain positive on its long-term fundamentals and dominant market share in Thailand and Vietnam. ThaiBev is well-positioned given that its key markets are ranked among the top alcohol consuming countries in Asia. The listing of its beer business remains a possibility and a key re-rating catalyst. Beer volumes in Thailand are showing signs of recovery. Thailand May 2020 beer volumes declined 24% YoY, an improvement from -78% YoY in April 2020. YTD beer volume is now -21% YoY, and ThaiBev’s management has guided for better improvement driven by ongoing easing of lockdowns. Vietnam is performing better as the country moved to reopen earlier than others in Southeast Asia. Vietnam beer production was -6% YoY in June 2020, a slight improvement from -7% YoY in May. Thailand: V-shape recovery in 2021. Our Thailand economist expects a strong rebound in Thailand’s economy in 2021, swinging back to a +6.8% growth following a contraction of 8.4% YoY this year. Thailand’s economy is heavily reliant on tourism and has a large exposure to exports, both of which are expected to gradually improve going into 2H 2020 as lockdown restrictions are lifted and as government stimulus measures filter through.

Figure 36: Thai real GDP Growth (% pa)

Source: The NESDC, KGI Securities (Thailand)

Figure 37: Thailand earnings forecast by sector

Source: KGI Securities (Thailand)



COMMODITIES: CRUDE OIL AND GOLD Chen Guangzhi, CFA / 6202 1191 / [email protected]

Compared to equities and bonds, gold and crude oil represent the best and worst performing assets YTD. These two assets perfectly reflect how the economy fares currently and in the near-term future.

Figure 38: Returns of different asset classes


The global production and businesses have yet to recover to pre-COVID levels, hence, the demand for energy especially oil is lower than usual. Meanwhile, due to the price war initiated in March, the extra output will take time to be consumed. Oil prices were hammered badly in March and April, but with the new round of output cut agreement reached by OPEC+ in May, oil prices have gradually recovered to the pre-price war level. Since we will have updates on oil on a weekly or monthly basis, we briefly reiterate the pros and cons of the crude market here: Positives:

1. EIA projected the global oil supply and demand to balance in 3Q20.

2. Upstream producers have been suffering, and the survivors will take more market share.

3. Oil majors with relatively a strong balance will sustain longer.

Negatives:

1. Second wave of COVID-19 strikes the world in 2H20, and re-lockdown will taper the recovering oil demand.

2. If oil prices are back to US$50/bbl ~ US$60/bbl, shale oil producers could ramp up the production which will result in glut again.

3. With poor profitability this year, dividend could be minimal or none.

Figure 39: World total liquids net withdrawal


Figure 40: Global total oil rig count


We reiterate our recommendation of CNOOC (883 HK) since 9M20 outlook with a target price: HK$10.04, last closing price: HK$8.88. Investment merits:

1. Highest oil beta compared to other oil majors 2. The only oil major with a net cash position 3. PBR at 0.8x, a historical low level

For more details, please refer to our Market Strategy Report published on 8 May 2020. To combat the current recession, central banks have adopted new rounds of QE. The currency debasement is inevitable compared to gold which is deemed safe-haven assets and an inflation hedge. We also closely monitor the two precious metals (gold and silver) on a weekly or monthly basis. Here is the summary of why we are keeping to our bullish view on gold:

1. Zero or negative interest rate environment makes gold, which does not generate yield, more attractive.

2. Flooded fiat money disrupts the confidence in the financial system.

3. Trade and other geopolitical tensions escalation encourage investors to allocate positions in gold.

https://www.kgieworld.sg/securities/resources/ck/files/industry-report/KGI%20Market%20Strategy_Oil%20%26%20Gas%20Sector_CNOOC%20(883%20HK)_KGI%20Securities%2020200508.pdf



Figure 41: Central banks asset, negative yield debt and gold movement

*Total assets of central banks include Fed, ECB, PBOC, BOJ, and SNB


Figure 42: Fed fund rate and gold price


Figure 43: Known ETF holdings of gold worldwide reach new highs


We maintain our US$1,900/oz TP for gold in 2020. Meanwhile, we reiterate our recommendation of Shandong Gold (1787 HK) for equity exposure. The company reached a new high of HKD22 on 9th July. However, its A-share price high was RMB48.86 in November 2011. Given the A-share’s closing was RMB39.85, we expect it to climb back to the 2011 high, riding on the uptrend of gold price to an all-time high. Therefore, the implied upside potential is 17.6%. We recommend a trading TP for the H-share of HKD23.9.



KGI’s Ratings Rating Definition

Outperform (OP) We take a positive view on the stock. The stock is expected to outperform the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon.

Neutral (N) We take a neutral view on the stock. The stock is expected to perform in line with the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon.

Underperform (U) We take a negative view on the stock. The stock is expected to underperform the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon

Not Rated (NR) The stock is not rated by KGI Securities.

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