Thursday, December 31, 2015
Jan[2] - Market Update
Macro economic announcement date for coming week (Critical events highlighted in RED)
Jan[1] - Venture (High yield machine)
COUNTER: Venture Corporation Limited
OVERVIEW:
Venture is a global provider of Electronics Manufacturing Services (EMS) for a wide range of high-mix, high-value and complex electronics products, such as photonics system, electron mechanical printing devices, Post of Sales (POS) machines, handheld devices, etc. Headquartered in Singapore, Venture comprises about 40 companies with global clusters in Asia, US and Europe. It is strategic partner of choice over 100 global companies including Fortune 500 corporations, such as HP, Honeywell, etc.
HIGHLIGHTS:
[1] The group saw its 3Q15 revenue up 16% to S$693m year on year. The growth was driven by market share gain among clients as well as favorable exchange rate movement. 9M15 net profit rose 9% year on year to S$109m.
[2] While contribution from segments like computer peripherals, printing & imaging have been shrinking, the group saw higher growth from segments such as life sciences, and networking & communication. Medical & life science is likely the key growth driver in medium term. One US based client, Illumina has been producing strong results in medical segment.
[3] World Semiconductor Trade Statistics suggests that semiconductor market will maintain steady growth of 3.4% in 2016 and 3% in 2017. Positive growth rate is anticipated across Asia-Pacific and Americas regions in 2016.
INVESTMENT THEMES:
[1] About 60% of Venture's shipments are to US. Considering USD being strengthened along with rising interest rate, the currency movement will be benefit to the counter. Less than 15% of shipment is derived from Singapore. Thus, it is less vulnerable the falling export index in domestic context.
[2] Almost 60% of staff cost are incurred in Malaysia. Weakening MYR vs US and SGD translates to heavy reduction in cost for the counter.
[3] Current valuation represents PE about 15 and PB about 1.2 which are in normal range. Dividend yield is about 6.1% which is attractive. The dividend payout has been consistent over past 5 years.
PRICE TREND:
Due to its consistent payout of dividend over years, the counter has been trading in range bound as shown below. Recent falling presents hunting window.
OVERVIEW:
Venture is a global provider of Electronics Manufacturing Services (EMS) for a wide range of high-mix, high-value and complex electronics products, such as photonics system, electron mechanical printing devices, Post of Sales (POS) machines, handheld devices, etc. Headquartered in Singapore, Venture comprises about 40 companies with global clusters in Asia, US and Europe. It is strategic partner of choice over 100 global companies including Fortune 500 corporations, such as HP, Honeywell, etc.
HIGHLIGHTS:
[1] The group saw its 3Q15 revenue up 16% to S$693m year on year. The growth was driven by market share gain among clients as well as favorable exchange rate movement. 9M15 net profit rose 9% year on year to S$109m.
[2] While contribution from segments like computer peripherals, printing & imaging have been shrinking, the group saw higher growth from segments such as life sciences, and networking & communication. Medical & life science is likely the key growth driver in medium term. One US based client, Illumina has been producing strong results in medical segment.
[3] World Semiconductor Trade Statistics suggests that semiconductor market will maintain steady growth of 3.4% in 2016 and 3% in 2017. Positive growth rate is anticipated across Asia-Pacific and Americas regions in 2016.
INVESTMENT THEMES:
[1] About 60% of Venture's shipments are to US. Considering USD being strengthened along with rising interest rate, the currency movement will be benefit to the counter. Less than 15% of shipment is derived from Singapore. Thus, it is less vulnerable the falling export index in domestic context.
[2] Almost 60% of staff cost are incurred in Malaysia. Weakening MYR vs US and SGD translates to heavy reduction in cost for the counter.
[3] Current valuation represents PE about 15 and PB about 1.2 which are in normal range. Dividend yield is about 6.1% which is attractive. The dividend payout has been consistent over past 5 years.
PRICE TREND:
Due to its consistent payout of dividend over years, the counter has been trading in range bound as shown below. Recent falling presents hunting window.
Sunday, December 27, 2015
Chart[4] - Super Group
This week was a short trading week with relatively light market volume, yet in the case of Super Group, traded volume was fairly elevated compared to previous trading sessions.
The counter has an immediate support in the range of $0.825-0.835. Short term moving averages (MA) are showing initial signs of turning up, suggesting the possibility for further upward movement. Should there be a follow through on the trading interest in the coming week, the counter needs to overcome the current resistance level of around $0.855 (where the weekly chart shows the banding of shorter term MA and the upper end of the Bollinger Band is located on the daily chart), with the immediate price objective of $0.87 (about the 50 day MA). If the counter manages to clear the 50 day MA, the next price objective would be $0.91 and possibly $0.95.
The counter has an immediate support in the range of $0.825-0.835. Short term moving averages (MA) are showing initial signs of turning up, suggesting the possibility for further upward movement. Should there be a follow through on the trading interest in the coming week, the counter needs to overcome the current resistance level of around $0.855 (where the weekly chart shows the banding of shorter term MA and the upper end of the Bollinger Band is located on the daily chart), with the immediate price objective of $0.87 (about the 50 day MA). If the counter manages to clear the 50 day MA, the next price objective would be $0.91 and possibly $0.95.
Chart[4] - Super Group
This week was a short trading week with relatively light market volume, yet in the case of Super Group, traded volume was fairly elevated compared to previous trading sessions.
The counter has an immediate support in the range of $0.825-0.835. Short term moving averages (MA) are showing initial signs of turning up, suggesting the possibility for further upward movement. Should there be a follow through on the trading interest in the coming week, the counter needs to overcome the current resistance level of around $0.855 (where the weekly chart shows the banding of shorter term MA and the upper end of the Bollinger Band is located on the daily chart), with the immediate price objective of $0.87 (about the 50 day MA). If the counter manages to clear the 50 day MA, the next price objective would be $0.91 and possibly $0.95.
The counter has an immediate support in the range of $0.825-0.835. Short term moving averages (MA) are showing initial signs of turning up, suggesting the possibility for further upward movement. Should there be a follow through on the trading interest in the coming week, the counter needs to overcome the current resistance level of around $0.855 (where the weekly chart shows the banding of shorter term MA and the upper end of the Bollinger Band is located on the daily chart), with the immediate price objective of $0.87 (about the 50 day MA). If the counter manages to clear the 50 day MA, the next price objective would be $0.91 and possibly $0.95.
Friday, December 25, 2015
Dec[8] - Market Update
Macro economic announcement date for coming week (Critical events highlighted in RED)
Thursday, December 24, 2015
Dec[7] - M1 (High yield hunting)
COUNTER: M1 Limited
OVERVIEW:
Established in 1997, the counter is 2nd licensed telecommunication service provider in Singapore. Besides mobile and iDD services, it also provides fibre broadband and fixed voice services. Its major shareholders, Axiata Group (from Malaysia), Keppel Co, SPH are holding 28%, 19% and 13% of shares separately.
HIGHLIGHTS:
[1] M1 saw its 3Q2015 revenue climbing 11% year on year. Net profit inched up 0.8% to $44.9m. 9M2015 revenue and net profit rose 16% and 2.8% year on year.
[2] While mobile service revenue was flat, fixed service revenue has been growing steadily with fibre customers up by 5% quarter on quarter. For enterprise customers, it has launched an extensive range of XGPON services (high speed optical network) and also introduced M2M (machine to machine) Connect. M2M also known as Internet of Things, connects million of devices such as vending machines, trucks, appliances and buildings. This allows M1's corporate customers to access, track and manage all their connected devices through M2M Connect.
[3] Amid the concern of rate hike from US (which has been announced) and potential entry of 4th-telco, the counter has been suffering from heavy selling pressure (down > 30%) over past 8 months.
INVESTMENT THEMES:
[1] The management guided at least 80% of payout ratio. Based on estimation, it translates to >7% of dividend yield for current trading price.
[2] Domestic market is well saturated. Further rate hike could post higher financial barrier to new player into local telecom sector as well. Shall entry of 4th Telco being ceased, M1 could be back to investor's favor again.
[3] The below table compares financial ratios among domestic telcos. M1 price valuation is not expensive yet with highest dividend yield.
PRICE TREND:
Current price is hitting support at 2.6 which was formed on 2012/13.
*** Note: Same counter has been mentioned in June[4] ***
OVERVIEW:
Established in 1997, the counter is 2nd licensed telecommunication service provider in Singapore. Besides mobile and iDD services, it also provides fibre broadband and fixed voice services. Its major shareholders, Axiata Group (from Malaysia), Keppel Co, SPH are holding 28%, 19% and 13% of shares separately.
HIGHLIGHTS:
[1] M1 saw its 3Q2015 revenue climbing 11% year on year. Net profit inched up 0.8% to $44.9m. 9M2015 revenue and net profit rose 16% and 2.8% year on year.
[2] While mobile service revenue was flat, fixed service revenue has been growing steadily with fibre customers up by 5% quarter on quarter. For enterprise customers, it has launched an extensive range of XGPON services (high speed optical network) and also introduced M2M (machine to machine) Connect. M2M also known as Internet of Things, connects million of devices such as vending machines, trucks, appliances and buildings. This allows M1's corporate customers to access, track and manage all their connected devices through M2M Connect.
[3] Amid the concern of rate hike from US (which has been announced) and potential entry of 4th-telco, the counter has been suffering from heavy selling pressure (down > 30%) over past 8 months.
INVESTMENT THEMES:
[1] The management guided at least 80% of payout ratio. Based on estimation, it translates to >7% of dividend yield for current trading price.
[2] Domestic market is well saturated. Further rate hike could post higher financial barrier to new player into local telecom sector as well. Shall entry of 4th Telco being ceased, M1 could be back to investor's favor again.
[3] The below table compares financial ratios among domestic telcos. M1 price valuation is not expensive yet with highest dividend yield.
PRICE TREND:
Current price is hitting support at 2.6 which was formed on 2012/13.
*** Note: Same counter has been mentioned in June[4] ***
Friday, December 18, 2015
Chart[3] - City Development
Earlier this week, the company announced that it would monetize some office assets to unlock value. The news saw a spike in the share price of the counter with volume, and though the new is positive, it has not exactly "broken free"of the downtrend as yet.
For the week ahead, short term moving average (MA) are about to attempt a crossover from below suggesting that there is support in the range of $7.3 to $7.38 should it experience a correction. Immediate resistance to overcome is the upper limit of the Bollinger Band at $7.66 and the 50 day MA at about $7.72. Clearing those resistance levels, in what would be a short and light trading week, would suggest that it could attempt a movement to about $7.93, with $8.06 the next significant price objective though it is unlikely to happen in the week ahead.
Dec[6] - Market Update
Macro economic announcement date for coming week (Critical events highlighted in RED)
Dec[5] - Talkmed (Seek shelter in rain)
COUNTER: Talkmed Group Ltd
OVERVIEW:
The company provides tertiary healthcare services in the fields of medical oncology and palliative care to oncology patients under the Parkway Cancer Centre (PCC) brand name. Its clinical functions include attending to patients, examination and administering medical treatment to patients, prescribing medicines and investigations such as laboratory tests. The medical oncology practice has an established track record of more than 15 years. Currently, there are 7 clinics in Singapore.
HIGHLIGHTS:
[1] 3Q2015 saw its revenue up 4% year on year. Due to higher employee benefit and operating expenses, net profit drop 2% year on year.
[2] In June 2015, it acquired 30% in Hong Kong Integrated Oncology Centre Holdings Limited which is also its first overseas venture. CIMB analyst projected $1m of share of loss will be incurred annually before breaking even in 2017.
INVESTMENT THEMES:
[1] According to the National Registry of Diseases Office in Singapore, 13,416 people were diagnosed with cancer in 2014, vs 12651 in 2013. The company is positioning in an environment where the incidence of cancer is on any upward trend.
[2] It is in net cash position (0 gearing ratio) with insignificant short term liability. Cash and cash equivalent stood at $39.5m. Current trading price represents ~4.7% of dividend yield. PE ~17 which is pretty attractive among its peers.
[3] Based on discount cash flow model (DCF), CIMB derived $1.27 as target price for the counter.
[4] While market is facing headwind over weakening regional economic, healthcare and medical sector could be one defensive counter in one's portfolio.
PRICE TREND:
The counter usually trades in insignificant volume so price could fluctuate in wide range. It would be a boring counter for traders. Long term investor could take dividend yield as a gauge for entry.
OVERVIEW:
The company provides tertiary healthcare services in the fields of medical oncology and palliative care to oncology patients under the Parkway Cancer Centre (PCC) brand name. Its clinical functions include attending to patients, examination and administering medical treatment to patients, prescribing medicines and investigations such as laboratory tests. The medical oncology practice has an established track record of more than 15 years. Currently, there are 7 clinics in Singapore.
HIGHLIGHTS:
[1] 3Q2015 saw its revenue up 4% year on year. Due to higher employee benefit and operating expenses, net profit drop 2% year on year.
[2] In June 2015, it acquired 30% in Hong Kong Integrated Oncology Centre Holdings Limited which is also its first overseas venture. CIMB analyst projected $1m of share of loss will be incurred annually before breaking even in 2017.
INVESTMENT THEMES:
[1] According to the National Registry of Diseases Office in Singapore, 13,416 people were diagnosed with cancer in 2014, vs 12651 in 2013. The company is positioning in an environment where the incidence of cancer is on any upward trend.
[2] It is in net cash position (0 gearing ratio) with insignificant short term liability. Cash and cash equivalent stood at $39.5m. Current trading price represents ~4.7% of dividend yield. PE ~17 which is pretty attractive among its peers.
[3] Based on discount cash flow model (DCF), CIMB derived $1.27 as target price for the counter.
[4] While market is facing headwind over weakening regional economic, healthcare and medical sector could be one defensive counter in one's portfolio.
PRICE TREND:
The counter usually trades in insignificant volume so price could fluctuate in wide range. It would be a boring counter for traders. Long term investor could take dividend yield as a gauge for entry.
Saturday, December 12, 2015
Chart[2] - Genting Singapore
Since the time Chinese President Xi commenced his anti corruption campaign in China, Genting Singapore along with Hong Kong listed casinos operating in Macau have been fairly poor.
As can be seen from the daily and weekly charts, the overall trend has been to the downside, though there are some tentative signs that it might be attempting to turn around.
Genting Singapore closed the week the week at $0.765, which is both the 20 day MA and middle of the Bollinger Band. The easing this week has been on declining volumes, however it is difficult to determine if it could also be due to the overall quietness in the market, where participation is light due to it being the end of the year. Should the next support level of $0.755 be breached, the counter could drift to the lower limit of the Bollinger Band which currently resides around the $0.735 level, followed by the previous low of $0.695.
The immediate resistance range for the counter to overcome is $0.77 to $0.785, preferably with large volume supporting, this would suggest $0.83 as being the next price objective.
As can be seen from the daily and weekly charts, the overall trend has been to the downside, though there are some tentative signs that it might be attempting to turn around.
Genting Singapore closed the week the week at $0.765, which is both the 20 day MA and middle of the Bollinger Band. The easing this week has been on declining volumes, however it is difficult to determine if it could also be due to the overall quietness in the market, where participation is light due to it being the end of the year. Should the next support level of $0.755 be breached, the counter could drift to the lower limit of the Bollinger Band which currently resides around the $0.735 level, followed by the previous low of $0.695.
The immediate resistance range for the counter to overcome is $0.77 to $0.785, preferably with large volume supporting, this would suggest $0.83 as being the next price objective.
Dec[4] - Market Update
Macro economic announcement date for coming week (Critical events highlighted in RED)
Dec[3] - REITs Hunting
Heading into the FOMC meeting next week, regional markets faced strong headwind of selling. Local listed REIT counters used to be victim amid worry of rate hike. Valued hunter shall be paying attention to counters with less gearing and no pressure of short term debt. Let's look into following counters which were presenting value while falling in price.
[1] Keppel DC REIT: The only REIT serves as proxy into data center sector which has high entry barrier.
[2] Starhill Global REIT: With a mixed portfolio of retail outlets in domestic and overseas markets, the counter managed to produce stable earning over years.
*** Note: Same counters have been mentioned in July[4] & Nov[1] ***
Friday, December 4, 2015
Dec[2] - Market Update
Macro economic announcement date for coming week (Critical events highlighted in RED)
Dec[1] - Sembcorp Ind (Buy into Utilities asset)
COUNTER: Sembcorp Industries Ltd
OVERVIEW:
A conglomerate with two dominant businesses - offshore oil & gas heavy engineering via Sembcorp Marine and a global utilities business. Temasek Holdings owns major shares at 49.5%.
HIGHLIGHTS:
[1] 9M2015 result saw the counter falling in both revenue and profit about 13% and 6% year on year. Marine segment registered net profit $151m which was down 36% drop in net profit, thus contributed the most for overall tumbling. Utilities segment was up by 3% to $306m.
[2] The counter is facing stiff competition in domestic power market thus it has been expanding into emerging market over years. Overseas contribution for utilities segment has been growing at 12%. First thermal power project (Total 2000MW power supply) in India achieved full operation since last September. It was just awarded a 426MW gas-fired power project in Bangladesh.
[3] Last week, Sembcorp Marine issued profit warning about significant decline in net profit by FY2015. It was attributed to "customer deferring or seeking to defer their rig orders". It involved in legal action with Marco Polo Drilling about a termination of rig contract.
INVESTMENT THEMES:
[1] The management guided that net gain ~$350m to be recognised in 4Q2015 due to divestment of its stake in Australian waste management joint venture. Investor can look forward annual dividend at $0.16 on FY2016. It translates to 5% based on current trading price. New power plant in overseas is widely expected to be bright spot next year.
[2] Due to headwind in oil&gas sector, the counter has been trading with heavy discount to its net asset value as refer to the chart below. It represent attractive price range with P/B ~0.85 and P/E ~7.8.
[3] Based on Sum of Part valuation (SOP), both OCBC and UOB rated the counter > $3.8.
PRICE TREND:
Price is hitting support at 3 and showing rebound. Latest OPEC meeting announced its determination to maintain current oil supply glut. Shall trading price of the counter break current support, further discount is presented for value investor.
*** Note: Same counter has been mentioned in Mar[3] ***
OVERVIEW:
A conglomerate with two dominant businesses - offshore oil & gas heavy engineering via Sembcorp Marine and a global utilities business. Temasek Holdings owns major shares at 49.5%.
HIGHLIGHTS:
[1] 9M2015 result saw the counter falling in both revenue and profit about 13% and 6% year on year. Marine segment registered net profit $151m which was down 36% drop in net profit, thus contributed the most for overall tumbling. Utilities segment was up by 3% to $306m.
[2] The counter is facing stiff competition in domestic power market thus it has been expanding into emerging market over years. Overseas contribution for utilities segment has been growing at 12%. First thermal power project (Total 2000MW power supply) in India achieved full operation since last September. It was just awarded a 426MW gas-fired power project in Bangladesh.
[3] Last week, Sembcorp Marine issued profit warning about significant decline in net profit by FY2015. It was attributed to "customer deferring or seeking to defer their rig orders". It involved in legal action with Marco Polo Drilling about a termination of rig contract.
INVESTMENT THEMES:
[1] The management guided that net gain ~$350m to be recognised in 4Q2015 due to divestment of its stake in Australian waste management joint venture. Investor can look forward annual dividend at $0.16 on FY2016. It translates to 5% based on current trading price. New power plant in overseas is widely expected to be bright spot next year.
[2] Due to headwind in oil&gas sector, the counter has been trading with heavy discount to its net asset value as refer to the chart below. It represent attractive price range with P/B ~0.85 and P/E ~7.8.
[3] Based on Sum of Part valuation (SOP), both OCBC and UOB rated the counter > $3.8.
PRICE TREND:
Price is hitting support at 3 and showing rebound. Latest OPEC meeting announced its determination to maintain current oil supply glut. Shall trading price of the counter break current support, further discount is presented for value investor.
*** Note: Same counter has been mentioned in Mar[3] ***
Chart[1] - ST Engineering
The week the counter experienced relatively high trading volumes compared to previous weeks and the seeming formation of the three white soldiers pattern (Tuesday / Wednesday / Thursday trading sessions), coupled with the counter making higher lows since Aug (25 Aug 2015 low was $2.70, 29 Sep 2015 low was $2.82 and 1 Dec 2015 low was $2.83) and a higher high (28 Aug 2015 high was $3.13 and 29 Oct 2015 high was $3.38) suggests that perhaps the counter might be turning the corner on its downward movement. The 50 day moving average (MA) has also started to flatten out which is a slightly promising sign to a trend change.
For the record, do not possess a crystal ball that tells me the future, however assuming that the above does turn out to be correct (changing of trend), the current market price $2.94 would be a decent entry price into the counter. Immediate resistance is the 20 day MA which is at $2.97, followed by the 50 day MA at $3.09, then the current upper limit of the Bollinger Band at $3.15. Clearing those resistance levels would see the counter retest the 200 day MA which is about $3.30.
Immediate support is at $2.92/93 where the 10 day exponential MA (open and close) reside.
THREE WHITE SOLDIERS
http://www.investopedia.com/
For the record, do not possess a crystal ball that tells me the future, however assuming that the above does turn out to be correct (changing of trend), the current market price $2.94 would be a decent entry price into the counter. Immediate resistance is the 20 day MA which is at $2.97, followed by the 50 day MA at $3.09, then the current upper limit of the Bollinger Band at $3.15. Clearing those resistance levels would see the counter retest the 200 day MA which is about $3.30.
Immediate support is at $2.92/93 where the 10 day exponential MA (open and close) reside.
THREE WHITE SOLDIERS
http://www.investopedia.com/
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