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Market Strategists Joshua Tan, Head of Research
Kenneth Koh, Research Assistant
SG & US Equity Analysts – SG Equity Strategy Ken Ang, Financials
Nicholas Ong, O&M & CPO
Lucas Tan, Real Estate
Wong Yong Kai, US Equities
Colin Tan, Telcos
Caroline Tay, Research Assistant
By Phillip Securities Research Mr. Chan Wai Chee, CEO
Peter Lee, Operations Exec
23rd Sep 8.15am/11.15am Morning Call & Webinar
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5
G3 + China growth picking up…
32
34
36
38
40
42
44
46
48
50
52
54
56
58
60
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Source: Bloomberg
EZ Mfg PMI
EZ Svc PMI
30
32
34
36
38
40
42
44
46
48
50
52
54
56
58
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Source: Bloomberg
Japan Mfg PMI
38
40
42
44
46
48
50
52
54
56
58
60
62
64
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
China Purchasing Mgr's Index(Source: CEIC)
Mfg: PMI
Svc PMI: Business Activity
34
36
38
40
42
44
46
48
50
52
54
56
58
60
62
Ja
n-0
0
Ja
n-0
1
Ja
n-0
2
Ja
n-0
3
Ja
n-0
4
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
(Source: CEIC, PSR est)
US Mfg PMI
US Services PMI
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6
Bodes well for SG growth/earnings outlook
-20%
-10%
0%
10%
20%
30%
40%
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
CORPORATE EARNINGS %q-qSource: Bloomberg
SG
5
7
9
11
13
15
17
19
21
23
25
27
29
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
3,400
3,600
3,800
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Source: BloombergSTI
T4Q P/E
F4Q P/E
-30%
-20%
-10%
0%
10%
20%
30%
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
SG Gross ExportsSource: CEIC
%q-q
%y-y 3mma
• As G3 + China economy improves, the outlook for Export heavy nations like SG will improve as well
• SG exports turning positive • SG Corp Earnings rebound
generally suggests STI • STI outlook still positive (short
term notwithstanding)
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7
Earnings rebound in China too… long 83188.HK!
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
China Industrial Profit(Source: CEIC)
%y-y 3mma
%y-y 12mma
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8
US profits – still no trend reversal
400500600700800900
10001100120013001400150016001700180019002000
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
(Source: BEA, CEIC, PSR est)
12mma
US Corp. Profits Aft. Tax (US$b, saar)
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9
Macro conditions still suggest…
1. OW Equities (no change, maintain) 2. OW Commodities (9th Sep 13 OW from NW) 3. UW Gold (maintain UW since 25th Oct 12) 4. UW +10yr US Treasuries (maintain UW since 4th Jan 13)
Short term outlook
• Emerging markets breakout • Gold is in midst of short term consolidation • S&P500 looks to short term correct • GSCI (commodities) needs to reclaim breakout point to stay bullish • STI may have short term pullback
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FTSE ALL-World ex-US
• Breakout on better relative strength
vs. S&P500 leader
• If price can stay above the blue
zone, it implies further upside.
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Gold
11
• Gold is bearish longer term
• Gold is bullish short term
• Major resistance zone between
1500-1600 and is a major selling
opportunity
Weekly MACD cross, short term up cycle
On bear market, RSI resistance is around 70
The recent gold surge is not accompanied by
outperformance of gold miners.
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• Gold is bearish longer term
• Gold is bullish short term
• Recent bullish candle is setting up
a potential ascending triangle.
• A break above 1400 implies further
upside to 1500 – 1550
• A break below 1300 implies further
downside to 1200.
• If there is another leg up, the
1550 zone is a good sell
opportunity,
Daily MACD cross, attempting short
term up cycle
Other indicators are not showing any
unusual strength,
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S&P500 (daily) 9 Sep 2013
13
The “otherwise” is starting to
show some hints.
$RUT:$SPX
$NYMO is encouraging.
But indecision candle at
resistance.
Short term correction until proven otherwise
- US SP 500 Index USD5 CFD
- ETF: SPX.AMEX
To trade:
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S&P500 (daily) (Today)
• $NYMO and RSI are getting
overbought.
• Daily down candle on higher
volume
• Longer term bullish
• Expect short term down side.
• Probable downside target is
in red zone support. (1675 –
1700)
- US SP 500 Index USD5 CFD
- ETF: SPX.AMEX
To trade:
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15
•Short term objective on 46.0 breakout achieved
•With Bearish daily star formation
•RSI is oversold
•A retracement to 45.5 to 46.0 is possible
This corroborates the possible short term
correction in the S&P500
Pullback very probable
Industrials Sector (Update).
However, the good relative strength of all
breadth indicators imply that long term trend
is still up.
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Sector Glances
16
Financials start to turn down.
Cyclicals peaking.
Industrials leading.
Materials and Energy turning
up.
Cyclicals Industrials
Materials Energy
(sequence of turning up)
More evidence of stage 4-5
business cycle (early-mid
expansion)
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17
Sector trends
Tech, Industrials, Materials
and Energy still
outperforming Staples and
Utilities.
Implies between stage 4
and 5 of market cycle.
Good to be in Sectors that
shows improving relative
strength momentum (top
left) leading into good
relative strength (top
right).
Long Oil Service Sector
(OIH). (See later)
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Sector Rotation
18
Phase 4 strategy: Short Bonds Long Stocks Long Commodities
… this also corroborates our assumption of Stage 4 of the economic cycle and materials and energy sector is to be favored.
Short Treasuries: TBT
Long Commodities: S&P GSCI
(ETF GSG.US)
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19
2. Intermarket Relationships
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Intermarket Relationship
20
Short Treasuries:
(ETF TBT)
Long Commodities:
S&P GSCI (ETF
GSG.US)
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GSCI Index Fund
21
Long Commodities:
S&P GSCI (ETF
GSG.US)
Breakout on high volume
Target Price: $37
Cut loss price: $32
Need to see if next week can
reclaim back above the
breakout point, if it cannot, it
implies further downside.
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Oil Service Sector
22
Indecision candle may signal
short term downside
Target Price: $52
Cut loss price: $44
Long Oil Service
Sector: OIH
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23
2. Intermarket and Sector Analysis
Phase 4 strategy: Short Bonds Long Stocks (Materials, Energy) Long Industrial Commodities
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10-Year US Treasury Note Price
• If price breaks out of 125.0, it
implies further short term
upside. Price target is 126.0-
126.5.
• At key technical level: wait
and see
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$TNX
• At key technical level: wait
and see
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TBT
• At key technical level: wait
and see
• A breakage of blue support
implies a move back to 72-
73.
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CSI300 (23 Aug 2013)
27
Potential double bottom base?
Trade: ETF: FTSE ChinaA50 or 83188.HK
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CSI300 Retracement to breakout point is
a good buying point
Breakout from
ascending triangle
Semi-bearish candle:
almost a dark cloud
cover.
Weekly MACD has
crossed – implying an
intermediate cycle
move
Improving macro in
China corroborates a
longer up move after
consolidation.
Trade: FTSE China A50 USD1 CFD
A retracement back to
the breakout point of
2300 is a good buying
opportunity.
Need to see a
confirmation this week
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29
STI (weekly) (5 Aug 2013)
NEXT
Still negotiating the Resistance (R)
at 3260, as expected price stalled
at 3259
Consolidating at resistance
If there is another leg down, the
first objective is the key support
zone between 2930 and 3110. This
is the level of the clusters of
consolidation patterns in Feb and
July 12, a 50% to 61.8%
retracement of the impulse wave
from Dec 11 to Apr 13, as well as
the 0.618 to 1 ratio of the last down
move starting in Apr 13.
A price retracement to the blue
support zone should be seen as a
good buying opportunity.
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STI
• Longer term bullish
• Short term may have
pullback
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STI
• Most likely scenario: pull
back till 3200
• Further upside is implied if
price can clear the resistance
at 3277
• We are biased to the upside
due to improving macro
economics
• A break up of 3277 implies a
target back to 3450
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32
Macro conditions still suggest (longer term)
1. OW Equities (no change, maintain) Technicals: short pullback possible • Long China – ETF 83188.HK (maintain OW since 9th
Sep 13 ) Technicals: short pullback possible 2. OW Commodities (9th Sep 13 OW from NW):
Technicals: wait and see • Long Oil Service Sector – ETF OIH.US
3. UW Gold (maintain UW since 25th Oct 12) Technicals: wait and see (short term)
4. UW +10yr US Treasuries (maintain UW since 4th Jan 13) Technicals: wait and see (short term)
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Singapore Strategy &
Stock Picks
Ken Ang
Investment Analyst
Phillip Securities Research Pte Ltd
23 Sept 2013
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Contents
Singapore Sector Strategy
Top Picks & Deep Value Plays
3 Top Picks
3 Deep Value Plays
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SINGAPORE STRATEGY
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Sector Strategy – Singapore
Overweight
Industrials (Capital Goods)
O&M outlook robust Crude Oil
Niche areas Market leaders
Banking Sector
Strong 1H13 – NIMs Stable, Fees and
Comm strong WM, Trade
2H13 may be weaker but still +ve
Strong traction, Rising Int rates
Fig. SG Equity Strategy dd 20 Sept 13
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Sector Strategy – Singapore
Overweight
Telecom Sector
Attractive Dividends >4%
Positive on Data Monetizing Excess
data charges, Population growth
Overweight - Industrials
- Banking
- Telecoms
Neutral - Commodities
- Property
Underweight - REITs
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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Sector Strategy – Singapore
Neutral
Commodities
Share price has declined
CPO prices Muted Upstream -ve
Property
Residential High Supply (2H13:
c100k units), Low Demand (TDSR)
Retail/Hospitality exposure preferred
Overweight - Industrials
- Banking
- Telecoms
Neutral - Commodities
- Property
Underweight - REITs
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Sector Strategy – Singapore
Underweight
REITs
Downside risk from QE assessment
Yields remain unattractive
Preferred REITs with Strong rental
growth, Stable margins
Overweight - Industrials
- Banking
- Telecoms
Neutral - Commodities
- Property
Underweight - REITs
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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SINGAPORE TOP PICKS
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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Singapore Stock Picks
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Singapore Stock Picks – Top Picks
DBS
Benefit from rising int rates
Especially from Short-term
rates. DBS can leverage off its
high % of cheap CASA deposits
Higher exposure to Greater
China Benefit from improving
economic environment in China
P/B of 1.2X trading at a
discount to peers (~1.4X)
Re-rating potential through
continued strong growth traction
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Singapore Stock Picks – Top Picks
SingTel
Attractive dividends >4%
Potential for growth from payout
range of 60%-75% NPAT
Healthy EBITDA growth in SG
& AU SG data monetizing,
AU focused on maximizing profit
Strong Growth Potential
Overseas associate (AIS,
Telkomsel), Digital Life
initiatives when crystallize.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Singapore Stock Picks – Top Picks
Keppel Corp
Strong Order Book wins
S$4.4bn vs FY13F S$5.9bn
Y-Y Higher O&M margins
>14% for FY13E-15E vs 13.5%
for FY12 from repeat orders for
KFELS B Class jack-up rigs
Strong track record vs
Chinese Peers Deliver timely
Attractive dividends >4%
Strong order book provides
visibility till 2019
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Singapore Stock Picks – Deep value plays
Amara Holdings
Deep discount to valuation
FV of S$0.74 @ 40% to RNAV
of S$1.23.
Normalization of recurring
earnings completion of
Amara Sg refurbishment,
100AM retail mall, Amara
Sanctuary higher occupancy
Overseas expansion
Bangkok (By 1Q14), Shanghai
(2015 Mix devt) and potentially
Myanmar
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Singapore Stock Picks – Deep value plays
Boustead Singapore
Growth of recurring income
Exclusive distribution for
Geospatial Tech (28% of PBT).
MY, Indo and AU growth areas
Strong pipeline of work
Record high order books of
S$491m mostly from niche
Industrial Ppty Design & Build
and Energy related engineering
Attractive Dividends 5.1% -
5.3% for FY14E-15E. Minimal
Capex, ~52% payout ratio
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Top Picks in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
DBS Group Accumulate 16.74 17.50 4.5% 32,758
Valuations 12 13E 14E
P/E (X) 12.2 11.7 11.1
P/B (X) 1.3 1.2 1.1
Dividend yield (%) 3.3% 3.3% 3.3%
SingTel Accumulate 3.80 3.99 5.0% 48,532
Valuations 12 13 14E
P/E (X) 16.8 15.8 15.6
P/B (X) 2.5 2.4 2.3
Dividend yield (%) 4.4% 4.4% 4.4%
Keppel Corp Accumulate 10.84 12.25 13.0% 15,695
Valuations 12 13E 14E
P/E (X) 10.2 12.7 11.1
P/B (X) 2.1 2.0 1.9
Dividend yield (%) 6.6% 4.3% 4.5%
Source: Bloomberg, PSR
Deep value plays in the Singapore Market
Company Rating Price TP Upside M.Cap.
(S$) (S$) (%) (US$'mn)
Amara Holdings Buy 0.560 0.74 32.1% 259
Valuations 12 13E 14E
P/E (X) 16.2 15.4 8.3
P/B (X) 1.2 1.0 0.9
Dividend yield (%) 1.1% 1.1% 1.1%
Boustead Singapore Buy 1.365 1.94 41.8% 560
Valuations 12 13 14E
P/E (X) 8.6 10.1 9.6
P/B (X) 2.3 2.1 1.9
Dividend yield (%) 5.1% 5.1% 5.4%
Courts Asia Buy 0.785 1.03 31.2% 352
Valuations 12 13 14E
P/E (X) 10.6 10.8 8.8
P/B (X) 1.5 1.4 1.2
Dividend yield (%) 4.1% 2.8% 3.4%
Source: Bloomberg, PSR
Analyst
Ken Ang
Kenangw [email protected]
+65 6531 1793
Phillip Research Team
Singapore Stock Picks – Deep value plays
Courts Asia
Current share price low
Remain positive, expect sales
growth in mid term despite
recent slowdown (new products)
Unique in-house credit
facilities Benefit from credit
tightening in SG and MY.
Source of recurring revenue.
Cust data reduce bad debts.
Expansion to Indonesia
Providing new growth potential.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
What you might be interest in too
Pan United (TP: $1.27, Closing: $0.905)
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Ho Bee (TP: $2.45, Closing: $2.13)
Potentially strong reval gains from completion of Metropolis
M1 (TP: $3.55, Closing: $3.35)
Attractive dividends >4%, Positive on data monetizing, Mobile, Fibre play with no PayTV drag
UOB (TP: $21.80, Closing: $21.55)
Benefit from rising int rates, Strong Fees and Comm (WM, Trade), Strong ASEAN growth
Singapore Exchange Limited (TP: $8.30, Closing: $7.63)
Higher Securities revenue, Strong derivatives, Dividend yield (>3.5%)
Ezion (TP: $2.71, Closing: $2.38)
Strong SEU fleet expansion, Strong US$2.5bn order wins, High ROEs (>30%)
Sin Heng (TP: $0.27, Closing: $0.22)
Synergistic Trading and Rental business model, Regional growth prospects, Strong execution
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
Market Strategists Joshua Tan, Head of Research
Kenneth Koh, Research Assistant
SG & US Equity Analysts Ken Ang, Financials
Nicholas Ong, O&M & CPO
Lucas Tan, Real Estate
Wong Yong Kai, US Equities
Colin Tan, Telcos
Caroline Tay, Research Assistant
By Phillip Securities Research Mr. Chan Wai Chee, CEO
Peter Lee, Operations Exec
Ask Questions!
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197201035Z © PhillipCapital 2013. All Rights Reserved. For internal circulation only.
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