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CGS CIMB |
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Singapore Airlines (SIA SP) 2QFY19: Beats Expectations On Stronger-than-expected Cargo Yields
Core earnings, excluding the recognition of deferred tax asset write down for Virgin Australia, was S$47m better than expected. The street however had not factored this in. While we are slightly disappointed with the 2% decline in pax yields, we are encouraged by SIA's optimism on cargo outlook for the near term. We also believe that SIA will continue to benefit from lower fuel prices, and margins could improve in 3QFY19. We recommend accumulating the stock at S$9.20-9.30. Maintain HOLD. Target: S$10.40.
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UOL Group Business as usual
■ 3Q/9M18 core net profits are broadly within expectations, at 22%/60% of our FY18 forecasts. Expect 4Q to pick up on more progressive billings. ■ New launches seeing steady buying traction, largely stable recurrent income. ■ Maintain Add, TP unchanged at S$8.45.
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UOL Group: Don’t worry, there’s still time
UOL’s 3Q18 results met our expectations, with core PATMI growing 4.9% YoY to S$92.8m. While UOL highlighted that the recent property cooling measures had negatively affected sentiment, it remains comfortable at the current run-rate of close to 70% and 30% sales for its Amber45 (six months after launch) and The Tre Ver projects (four months after launch), respectively. Looking ahead, UOL plans to launch two projects in 2Q19, with its Silat Avenue project a potential beneficiary of the government’s upcoming Greater Southern Waterfront project. UOL’s hotels RevPAR performance and retail rental reversions were mixed, but its office portfolio performance was more robust, with healthy leasing momentum and occupancy rates. It would seek to grow its recurring income streams, including in Australia, given the residential headwinds in Singapore. After adjustments, our fair value estimate for UOL moves from S$8.48 to S$8.41. Maintain BUY. |
Silverlake Axis Strong V-Shaped Recovery; Maintain BUY
Reiterate BUY, DCF-based TP of SGD0.65, 59% upside with 4.6% FY19F yield. Silverlake reported a stellar 1Q19, with revenue and PATMI surging 36% and 70% YoY to MYR166.6m and 57.9m due to the implementation of contracts it secured a few months ago. The next few quarters should be stronger as the company continues to draw down from its MYR320m orderbook, with both licensing and project services revenue projected to deliver strong growth. Earnings from the acquisition of Xinfotech will also kick in in 2H19.
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Check out our compilation of Target Prices
