Excerpts from latest analyst reports....
CIMB has 33-c target price for YONGNAM
Analyst: Gary Ng
Yongnam’s interims missed expectations as the structural steelworks division dropped the ball.
But we are not worried as the group’s competence in rounding up high-profile and accretive projects locally and regionally should propel its earnings.
2Q12 profit came in at 18% of our FY12 estimate, taking 1H to 36% of our forecast.
It is 7% short of the mark even though we expect a better 2H12 with the resumption of key projects.
Despite a cut in our FY12 forecast, we maintain our target price (6x CY13 P/E, its 3-year mean).
It is still an Outperform given its win rate for accretive projects. Target price: 33 cents.
Recent story: YONGNAM: 8 key takeaways from meeting with CEO & finance director
CIMB says Hi-P offers direct exposure to Apple
Analysts: Jonathan Ng and Renfred Tay
Hi-P is one of the very few Singapore listed companies that offer direct exposure to Apple’s phenomenal growth, and mobile devices in general.
The increase in revenue contribution and margin expansion in 2H12 will offset the fall in RIM’s contribution seen in 2Q12.
Investors should now turn their attention to Hi-P’s strong recovery in 2H12.
Our confidence in this recovery is further boosted by management’s guidance for the rest of the year that includes the assumption of having no new projects from RIM.
We believe there is more upside to Hi-P’s share price. The stock currently trades at 8.8x CY13 core P/E on its three-year forward EPS CAGR of 43%.
Hi-P’s net cash of S$119m as at end-June represents 17% of its current market cap, and we believe the share price will be supported by its share buyback mandate.
Target price: $0.96.
Recent story: HI-P INTERNATIONAL confident of higher revenue, profit in FY12
Nomura's top Singapore bank pick is DBS
Analysts: Anand Pathmakanthan, CFA, and Manjith Nair
The balance sheet ratios continue to be robust with loan growth increasing 3.8% q-q, asset quality remaining stable with gross Non-Performing Loan ratio at 1.3% and CAR at 15.4%.
Management guidance is for FY12 end loan growth to be around 10% and margins to decline another 2-3bps from the latest reported 1.72% (considering the anticipated margin decline in China).
DBS, currently trading at 1.1x FY12F BV, continues to remain our top pick among Singapore banks, with UOB’s relative transparent and low-beta operating platform the most defensive choice, in our view.
Target price remains SGD 18.30.
Rating remains Buy.
