DBS Bank / DBS Vickers Research (Singapore) - 2018 Asiamoney Poll: Please Vote for
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
2018 Asiamoney Poll:
Please Vote for
DBS Bank / DBS Vickers
Research (Singapore)
June 2018
DBS RESEARCH – SINGAPORE TEAM
Strategy Consumer Staples Real Estate / REITs
Janice Chua Andy Sim Derek Tan
(Head of Research, Singapore) Alfie Yeo Mervin Song
Yeo Kee Yan (Strategist) William Simadiputra Rachel Tan
Lim Rui Wen
Macro Economics Carmen Tay
Carmen Tay
Taimur Baig (Chief Economist)
Energy Telecom /
Irvin Seah (Singapore)
Technology (Software / Hardware)
Janice Chua
Small Caps Sachin Mittal
Ho Pei Hwa
Ling Lee Keng Ling Lee Keng
Suvro Sarkar
Carmen Tay Carmen Tay
Glenn Ng
Banks / Diversified Financials Transport (Regional)
Healthcare
Lim Sue Lin Paul Yong
Lim Rui Wen Andy Sim
Andy Sim
Rachel Tan
Consumer Discretionary Suvro Sarkar
Andy Sim Industrial Conglomerates Utilities
Alfie Yeo Janice Chua Patricia Yeung
Ling Lee Keng Ho Pei Hwa
Rachel Tan Suvro Sarkar
Carmen Tay Alfie Yeo
2
Ling Lee Keng
Our Asiamoney Track Record
SINGAPORE 2014 2015 2016 2017 SINGAPORE 2014 2015 2016 2017
Best for overall research 1 2 1 1 Best Analyst
Best for roadshows and company visits 1 1 1 1 Janice Chua (Best Strategist) 1 3 3 1
Best for events and/or conferences 1 1 1 1 Mervin Song (Casino) 1
Most Improved 4 3 2 1 Andy Sim (Consumer discretionary) 1 2 1 1
Local 1 1 1 1 Lim Sue Lin (Banks) 5 5 4 2
Andy Sim (Consumer Staples) 1 3 4 2
Best Sector Team Derek Tan (Real Estate) 6 7 5 2
Strategist 2 2 1 1 Paul Yong (Transportation) 19 12 12 2
Casino /Gaming 1 Janice Chua (Industrials / Conglomerates) 8 6 3
Consumer Staples 1 3 2 1 Lim Sue Lin (Diversified Financials) 2 2 4 3
Diversified Financials 1 1 1 1 Andy Sim (Health care) 1 2 3 3
Industrials / Conglomerates 3 2 1 1 Lim Sue Lin (Insurance) 3 1 3
Small Caps 3 2 2 1 Andy Sim (Transportation) 14 4 5 3
Bank 3 6 6 2 Derek Tan (Small Caps) 16 9 3
Consumer discretionary 1 1 2 2
Energy 2 3 1 2
Health care 1 1 1 2 Best sales team
Real Estate 3 5 5 2 Lee KS Daniel 8 18 15 2
Transportation 2 2 2 2 Terence Choo 7 7 12 3
Insurance 3 1 3
Best sales team 1 3 1 1 Best in sales trading
Best in sales trader 5 3 4 2 Song It Seng 13 15 4 2
3
Our Awards
2017 Greenwich Asia awards
Singapore:
Ranked 1st for Penetration in Asian Equity
Regional:
Ranked 2nd for SMC Asian Corporate Access for Asian Institutions
4
Our signature reports ….
Category:
Overall Country Research
2017 Asiamoney: 1st for Overall
Country Research
in 2016 and 2017 VOTE!
WHY VOTE FOR DBS?
✓ Best for Overall Country Research Ranked TOP 3 since 2008
✓ Experienced & Stable Team ALL our senior analysts have > 10 yrs of experience
✓ Extensive, on the ground and In-Depth Coverage Most extensive coverage over 100 stocks in
Singapore.
✓ Discovery of hidden gems – first to highlight and promote several new undervalued stocks
✓ Model portfolio – outperformed STI by 4.7% since its launch in January 2017
✓ DBS Asian Insights SparX - A deep dive into thematic angles with a differentiated view on a
sector, country or the region
5
Where We Stood out
Singapore Strategy
2017 Asiamoney: 1st for
Strategy
VOTE! ➢ STI’s rally came near our
2018 base case objective of
Janice Chua Yeo Kee Yan, CMT 3688
Top 5 Notable Calls (2H 2017 to 1H 2018):
1. Turned bullish on rig builders from July 2017(26 Jul 2017) – Keppel Corp rose 34% by end January 2018, SembCorp Marine rose
55% by early February 2018
2. Turned selective on SREITs from November 2017 (6 Nov 2017) – SREITs Index peaked barely 2 months later in January 2018 at
873 and has fallen 10% since
3. STI 2018 base case objective 3688, bull case 3800 (27 Nov) – STI approached just 48pts shy of our base case objective in early
May before correcting
4. Switched focus to mid-late cycle in 1Q 2018 (5 March 2018) – SIA rose as much as +7.4%, Genting SP up to +15%. Breadtalk
+15%. All 3 stocks outperformed STI, which is down 3.5% since
5. Warned of stock market correction from May to June 2018 ahead of World Cup (3 May 2017) – STI is down 7.1% since
6
VOTE!
Economics:
Singapore
“Strong coverage on the Singapore economy from
both cyclical and long term structural basis; and
consistently outperform market in terms of
Irvin Seah
Singapore’s economic forecasts”
Top 3 Notable Calls (2017-2018):
#1 The GST hike: Flagged out the risk of a GST hike as early as Mar17, and first to issue a formal report on the risk of a GST hike
to be announced in Budget 2018, as well as the possible implementation approach in Nov17. The government subsequently
announced the GST hike during the Budget in Mar18.
#2 From recovery to normalisation: Accurately pin-pointing the bottom of the cycle in 3Q16 and ahead of market expectation.
Subsequently led consensus in terms of GDP growth forecasts in 2017, and correctly identified the manufacturing sector, in
particularly the electronics cluster as the main driver of growth. Flagged out the importance of the service sector to sustain the
growth momentum and further strengthened the call in 4Q17, that services will replace the manufacturing sector to become the
main engine of growth in 2018.
#3 Dovish normalization by MAS: Correctly highlighted the return to an appreciation stance, with the slope of the SGD NEER
being less than usual. The MAS shifted to a “gradual” appreciation stance in Apr18.
7
Industry: Singapore Small
Caps
2017 Asiamoney: 1st for
Singapore Small Caps
Small stocks, big return….. We are champion for Hi-P (+>200%), Creative (+>100%), Breadtalk
(+c.20%), iFAST (+c.20%)
Significant Calls: New Discoveries (2016/18)
Champion + New Discoveries
# of new discoveries Silverlake
• Hi-P: surged over 200% less than 1-yr after initiation in May last Cromwell
Axis (+1%)
year. We are the first to re-initiate Hi-P to ride on the technology REIT (+2%)
uptrend.
• Breadtalk: Consistently outperforming the market; gained over
20% YTD vs negative return for the market.
• iFAST: outperformed the market by c.20% post 1Q18 results,
after delivering 7th consecutive quarter of record AUA. We have
been buyer of iFAST as a proxy to wealth management Fintech
play.
• Creative: The stock rose over 100% on our note with revenue
potential of new technology and a TP. 8
Price as at 14 Jun 18
Banks;
Industry:
Diversified Financials
2017 Asiamoney: 2nd for Banks;
1st for Diversified Financials
VOTE!
Lim Sue Lin Lim Rui Wen
“A good ride on star-performing Singapore banks since 2H2017”
Top Notable Calls (2017-2018):
#1 Reiterated BUY on Singapore Banks in Nov 2017: Reiterated BUY on Singapore banks in Nov 2017 in our 2018 Outlook report
after our upgrade calls on Singapore banks in Jul and Oct 2017 respectively. Overweight on the sector is poised on (1) NIM acceleration
(2) cleaner asset quality position with lower credit costs (3) sustained loan growth recovery, which was subsequently evinced in 1Q18
results. Since our report in Nov 2017, Singapore banks rallied to a peak of c.21% (average of sector) in 1H2018 and are currently up
c.10% (incld. dividends), outperforming STI by c.12%.
#2 UOB: Upgraded UOB to BUY from HOLD in Oct 2017: Highlighted that UOB has lagged its peers and should benefit from property
market recovery, imminent NIM improvement and end to its asset woes. Stock rallied c.23% since our upgrade call at its YTD peak.
#3 OCBC: Upgraded OCBC to BUY from HOLD in Jul 2017: Highlighted that OCBC’s wealth management and insurance businesses
should continue to drive its non-interest income and stabilizing asset quality. Stock rallied c. 21% since our upgrade call at its YTD peak. 9
Industry:
VOTE!
Consumer Staple,
Consumer Discretionary
2014 - 2017 Asiamoney: Vote for
Asiamoney’s no.1 consumer
discretionary team in Singapore and
no. 3 in Regional.
Andy Sim Alfie Yeo
“Strong on-ground coverage on consumer sub-sectors – Grocery retail, Food
Service, F&B; Asiamoney Singapore’s best consumer discretionary team for four
years running...”
Top 3 Notable Calls (2017-2018):
#1 Grocery retail/ Sheng Siong & DFI: Indepth study and report on ASEAN Grocery retail, and reiterated positive view of brick-
and-mortar players despite concerns from online players, particularly Amazon’s entry into Singapore. Stayed positive on
Dairy Farm and Sheng Siong and price up c.18% & 10% post sell-down in Aug’17.
#2 BreadTalk Group: Continued to remain positive on back of earnings recovery; share price up >30% in past 1 year
#3 Jumbo: Continued to remained neutral on Jumbo since early 2017 despite excitement on new franchises signed overseas,
given concerns on start up costs. Initiated coverage in Jun'16 on back of potential of overseas expansion; share price +36%
when we downgraded. Price underperform and down by -18% in past 1 year.
10Industry: Energy
2017 Asiamoney:
Ranked 2nd for Energy
VOTE!
Suvro Sarkar Ho Pei Hwa
Correctly called the strong oil price recovery since 2H-2017, and turned overweight on oil & gas/
offshore marine sector early
Top Notable Calls (2017-2018):
#1 Sembcorp Marine: We were amongst the first few brokers that upgraded SMM in Feb-2017. Stock surged over 80%, from
S$1.53 to S$2.80 in a year before correcting from highs. It remains our conviction BUY (TP S$2.90) as a prime beneficiary to
ride O&G recovery.
#2 Keppel Corp: Stock rose over 30%, from S$6.53 to S$8.63 within 6-month of our upgrade in Jul-2017.
Thematic Research Issued in last 12 months:
1) 22 Jan 2018 - Singapore Rigbuilders: New orders drive rerating
2) 20 Jul 2017 - Shipyards: Creating Global Champions
3) 18 Jul 2017 - Regional Oil & Gas: Market rebalancing underway, despite shale
11Analyst’s Analyst’s Industry: Healthcare
2014 to 2017 Asiamoney:
Picture Picture Rank top 2 for Healthcare
2.4” x 1.8” 2.4” x 1.8”
VOTE!
Rachel Tan Andy Sim
Top Notable Calls:
#1 Raffles Medical Group: Contrary to consensus, one of the first to highlight potential short-term earnings risk from China
expansion, which is starting to be evident. Maintain conservative earnings estimates before consensus downgrades. Despite a
few rebound, the Stock continues to fall to its lowest point since 2014. Stock fell 36% from its peak.
#2 IHH Healthcare: Top pick for Healthcare sector despite potential start-up costs from new hospitals in HK / China, believing it will
outperform its peers due to its size and ramp-up of Gleneagles HK. IHH outperformed FTSE SP Healthcare Index by 9% and its
peer by 24%.
#3 Parkway REIT: Reiterate BUY rating on the stock featuring its stable profile, distribution of divestment gain and potential growth
opportunities. Stock gained 28% in FY17.
12Industrial /
Industry:
Conglomerate
2017 Asiamoney:
Ranked 1st for Industrial /
Conglomerate
VOTE!
Suvro Sarkar Ho Pei Hwa
Re lative performance ( 1-Jun-2017 = 100)
140
Top Notable Calls (2017-2018): 130
#1 ST Engineering: Downgraded ST Engineering to 120
HOLD at S$3.70 share price level in August 2017, and
share price subsequently dipped 14% over the next 4 110
months to a low of S$3.19 in December 2017; we
upgraded the stock again in February 2018 on the back 100
of better long term visibility
90
#2 Keppel Corp: Stock rose over 30%, from S$6.53 to
S$8.63 within 6-month of our upgrade in Jul-2017. 80
Dec-17
Jun-17
Mar-18
May-18
Apr-18
Sep-17
Nov-17
Jan-18
Jul-17
Aug-17
Oct-17
Feb-18
Keppel STE STI
13Industry:
Transport / Industrials
2017 Asiamoney: 2nd for
Transportation and 1st for
Industrials / Conglomerates
VOTE!
Paul Yong Ho Pei Hwa Andy Sim Suvro Sarkar
Top 4 Notable Calls (2017-2018):
#1 Stock: Upgraded SIA to a BUY on 14 Feb when share price was S$10.60, and it remains our conviction pick (TP S$13.70)
#2 Stock: Downgraded HPH Trust to a HOLD when share price was US$0.42 on 13 Feb, and share price significantly underperformed
until 13 April 2018 when we upgraded our call to a BUY with share price at US$0.33
#3 Stock: Downgraded ST Engineering to HOLD at S$3.70 share price level in August 2017, and share price subsequently dipped 14%
over the next 4 months to a low of S$3.19 in December 2017; we upgraded the stock again in February 2018 on the back of better long
term visibility
#4 Stock: Downgraded CD to HOLD in May’17 on earnings outlook and taxi fleet contraction. Indepth understanding of workings of
company and industry.
Thematic Research Issued in last 12 months
1) 31 Jan 2018 – ASEAN Aviation: Pricing power to pick winners
2) 31 Jan 2018 – China/HK Airlines: Entering a golden age
3) 26 Jul 2017 – ASEAN Aviation: Aircraft Leasing: BUY LCCs and Thai Aviation 14Industry: Real Estate
2017 Asiamoney:
Derek Tan (lead analyst): Top 2
analyst for Real Estate (Singapore)
Team: No. 2 for Real Estate
(Singapore)
Derek Tan Mervin Song CFA Rachel Tan
VOTE!
“Enbloc market will turn red-hot with lack of sites from the GLS... Our picks are City Developments and UOL.”
Derek Tan and Rachel Tan, Aug 2017
“REITs with stronger growth will be relative outperformers despite risk of higher interest rates in the horizon.”
Mervin Song, Aug 2017
“Investors will over time appreciate FCT superior DPU growth of 5% despite being in the “challenged” retail
subsector.”
Derek Tan / Mervin Song, Dec 2017
Top 3 Notable Calls (2017-2018):
#1 Land-Bank for Buck (UOL and CityDev): Foresee the En-bloc market to turn “red hot” and developers to bid aggressively for land in Aug’17.
Since then developers added more than 50 en-bloc sites worth more than S$50bn in GDV. Top picks UOL Group and City Developments continue
to rally by 15%-19% to after a 30% rise in 1H17. Even after recent correction both stocks remain 1% and 10% above our previous call.
#2 REITs to perform on Firmer Fundamentals (AREIT/CDREIT): Advised investors to remain vested selective in S-REITs with growth as a key
driver for re-rating. Recommended CDL Hospitality Trust and Ascendas REIT. These REITs returned 20% and 11% respectively in 2017.
#3 Mid-cap REIT pick (FCT): Believe that the strong DPU growth to result in a strong re-rating for mid cap retail REIT like FCT, despite overall
market weakness. FCT total returned 10% over past year and outperform the (FSTREI index) one-year total return of 4%.
15Industry: Telecom &
Technology
(Software / Hardware)
VOTE!
Sachin Mittal
“Unique Reports on (a) Digital Prism – An innovative framework to identify digital winners in the
Asian telecom sector” (b). Singapore Digital Transformation : Cherry-picking Pro-active Leaders and
Fast-Followers (c) Data Centre: M&As to accelerate in 2018 – Highlighting the ROIC of data centres
Top 3 Notable Calls (2017-2018):
#1 Creative Technology: The stock rose over 100% on our note with revenue potential of new technology and a TP.
#2 StarHub : We highlighted Singtel BUY-Starhub SELL on 25 Jan 2018 and StarHub has declined 40% since then versus 10%
decline at Singtel.
#3 M1 : M1 has remained stable since we upgraded the counter to a HOLD in April 2018 due to revenue share gains on the back of
Circles. Life!. The counter declined 8% from July 2017 to April 2018 throughout which we maintained a FULLY VALUED call.
16Disclaimer
Disclaimers and Important Notices
The information published by DBS Bank Ltd. (company registration no.: 196800306E) (“DBS”) is for information only. It is based on information or opinions obtained from sources believed to be reliable
(but which have not been independently verified by DBS, its related companies and affiliates (“DBS Group”)) and to the maximum extent permitted by law, DBS Group does not make any representation
or warranty (express or implied) as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions and estimates are subject to change without notice. The publication and
distribution of the information does not constitute nor does it imply any form of endorsement by DBS Group of any person, entity, services or products described or appearing in the information. Any
past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment or securities. Foreign exchange transactions involve risks.
You should note that fluctuations in foreign exchange rates may result in losses. You may wish to seek your own independent financial, tax, or legal advice or make such independent investigations as
you consider necessary or appropriate.
The information published is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to subscribe to or to enter into any transaction; nor is it calculated to invite,
nor does it permit the making of offers to the public to subscribe to or enter into any transaction in any jurisdiction or country in which such offer, recommendation, invitation or solicitation is not
authorised or to any person to whom it is unlawful to make such offer, recommendation, invitation or solicitation or where such offer, recommendation, invitation or solicitation would be contrary to law
or regulation or which would subject DBS Group to any registration requirement within such jurisdiction or country, and should not be viewed as such. Without prejudice to the generality of the
foregoing, the information, services or products described or appearing in the information are not specifically intended for or specifically targeted at the public in any specific jurisdiction.
The information is the property of DBS and is protected by applicable intellectual property laws. No reproduction, transmission, sale, distribution, publication, broadcast, circulation, modification,
dissemination, or commercial exploitation such information in any manner (including electronic, print or other media now known or hereafter developed) is permitted.
DBS Group and its respective directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned and may also perform or seek to perform
broking, investment banking and other banking or financial services to any persons or entities mentioned.
To the maximum extent permitted by law, DBS Group accepts no liability for any losses or damages (including direct, special, indirect, consequential, incidental or loss of profits) of any kind arising from
or in connection with any reliance and/or use of the information (including any error, omission or misstatement, negligent or otherwise) or further communication, even if DBS Group has been advised of
the possibility thereof.
The information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. The information is
distributed (a) in Australia by DBS Bank Ltd. or DBS Vickers Securities (Singapore) Pte Ltd.; (b) in Singapore, by DBS Bank Ltd.; (c) in Hong Kong, DBS Bank Ltd, DBS Bank (Hong Kong) Limited and DBS
Vickers (Hong Kong) Limited.; (d) in Malaysia, by AllianceDBS Research Sdn Bhd ("ADBSR").; (e) in Thailand by DBS Vickers Securities (Thailand) Co Ltd.; (f) in Indonesia, by PT DBS Vickers Sekuritas
Indonesia.; (g) in the United Kingdom by DBS Vickers Securities (UK) Ltd.; (h) in Dubai International Financial Centre by DBS Bank Ltd.; (h) United Arab Emirates by DBS Bank Ltd.; (i) United States by DBS
Bank Ltd.
In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and
regulations of such jurisdictions.
* Where reference is made to any published research report mentioned in this document, please refer to important disclosures at the end of each report
17You can also read
