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18 March 19, 8.15am/11.15am Morning Call/Webinar
Singtel
Singapore Coal Monthly
US Weekly
China Weekly
Phillip Singapore Weekly
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.
Disclaimer
The information contained in this presentation has been obtained from public sources which Phillip Securities Research Pte Ltd (“PSR”) has no reason to believe are
unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this presentation are based on such
information and are expressions of belief only. PSR has not verified this information and no representation or warranty, express or implied, is made that such
information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in this presentation is
subject to change, and PSR shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or
releases in connection therewith. In no event will PSR be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of
the information or Research made available, even if it has been advised of the possibility of such damages.
This presentation is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of
any particular person.
You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial
situation or particular needs, before making a commitment to invest in such products.
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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. 2
Singtel’s participation in Airtel
rights issue
Alvin Chia
Research Analyst
Phillip Securities Research Pte Ltd
18 Mar 2019
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.
Singtel’s participation in Airtel rights issue
Airtel fund raising:
1. To raise US$4.5bn from rights issue & perpetual bonds
2. Promoter group & GIC to jointly subscribe for 67% of rights issue
3. Singtel to subscribe for ~US$525mn in rights shares (total investments ~
US$900mn in 12mths)
Impact on Singtel:
1. Singtel diluted to 35.2% from 39.5% (Still largest shareholder in Airtel)
2. Fund US$525mn via cash/debt
3. Net debt/EBITDA still healthy at 1.68x
Figure 1:
Source: Singtel
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities
accepts no liability whatsoever with respect to the use of this document or its contents.India is stabilising
• Consolidated from 10 to 4 operators
• ARPU improved supported by introduction of minimum recharge
plans (Top up - Rs 23 for 28 days)
• We expect competition from Reliance Jio to rationalise
Figure 2: Airtel India ARPU (Rs) Figure 3: Market revenue share
QoQ ARPU increase
in Q3FY19
Source: Airtel Source: Singtel
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities
accepts no liability whatsoever with respect to the use of this document or its contents.Debt levels healthy
Moody’s will downgrade rating either of these 2 conditions:
1. Net debt/EBITDA < 2.0x (adjusted associate cash dividends back to core EBITDA)
Figure 6: Peers Net debt/EBITDA
Company 1 Mth 3 Mth YTD Share Px Market Cap Net debt/
Perf. Perf. Perf. Local (US$mn) EBITDA
India
Bharti 13.8% 7.3% 9.6% 337.0 19,473 4.21
Vodafone Idea
6 .8% -6.6% -10.5% 34.0 4,287 N.A.
Indonesia
Telkom -0.3% 0.0% -0.5% 3740.0 25,970 0.61
Indosat -27.7% 48.9% 60.8% 2720.0 1,036 3.11
XL Axiata 24.4% 32.8% 28.8% 2580.0 1,933 2.46
2. EBIDTA margin below 30% on a Thailand
sustained basis AIS
DTAC
-0.3%
10.5%
8.2%
15.4%
6.6%
21.4%
180.5
52.8
16,931
3,941
1.36
1.61
Philippines
Figure 5: EBITDA Margin Globe 2.4% -3.2% 2.8% 1916.0 4,845 1.90
PLDT INC -3.2% -0.7% 0.6% 1161.0 4,767 1.99
FY18 FY19e Malaysia
Axiata 5.3% 7.8% 5.9% 4.2 9,320 3.19
Digi -0.1% 5.2% 1.7% 4.6 8,786 0.76
EBITDA Margin 29.0% 27.5% Australia
Telstra 6.5% 16.5% 17.3% 3.3 9,484 1.91
Source: PSR
Singapore
M1 0.5% -2.4% -1.9% 2.1 1,409 1.24
StarHub -17.4% -12.8% -10.3% 1.6 1,980 1.53
2.8% 5.5% 5.6% 126,158 1.95
Singtel -1.3% 0.6% 2.0% 3.0 36,528 2.07
Source: Bloomberg, PSR
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Singtel limited
Accumulate (maintained), TP S$3.27,Last S$3.02
1. Expect moderate recovery in associates (~40% of earnings)
2. Enterprise segment to offset weakness in the consumer business
• ICT service revenue to remain healthy with S$2.9bn in order book
We continue to like Singtel because of:
1. Diversified earnings
2. Stable dividend yield of 5.8%
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Singapore Coal Monthly
Indonesian coal might see a new opportunity
Chen Guangzhi
Research Analyst
Phillip Securities Research Pte Ltd
18 March 2019
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Singapore Coal Monthly
China
China restricted Australian coal imports
• In Feb-19, Dalian Customs imposed an infinite restriction on Australian coal imports; Considered to
implement a quota of 12mn tonnes of the overall coal import for 2019
• Five ports under the supervision of the custom executed the ban
• Slow down the customs clearance of Australian coal by at least 40 days
Approval for resumption of work in coal mines in Yulin City in Shannxi
• Ministry of Energy of Yulin City announced the approval for resumption of mining work in the first batch of
49 mines with an annual capacity of 168mn tonnes in mid- Feb-19
• The second batch of 15 mines with an annual capacity of 35.6mn tonnes resumed as well
Indonesia
Demand for Indonesian thermal coal heats up
• Domestic producers were receiving more inquiries for high-CV coal from China in Feb-19
• Some Smaller scale high-CV producers are returning to the market
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Singapore Coal Monthly Temporary supply shock boosted the coal imports but it’s unsustainable • In Jan-19, Total coal import to China jumped by 19.5% YoY and 227.5% QoQ to 33.5mn tonnes • Indonesian coal imports surged by 16% YoY to a three-year new high of 16mn tonnes during the period • Total coal import plunged by 15.5% YoY and 47.3% QoQ to 17.6mn tonnes in Feb-19 • Port coal inventory was replenished, and demand for coal is tapering Indonesian coal has the potential to partially fill the supply gap • In 2018, there were 5,800 mines shut and more than 150mn tonnes of capacity phased out. • In 2019 and 2020, China will continue to curtail the remaining 150mn tonnes of capacity to complete the goal of total 800mn tonnes capacity elimination in the Plan • Demand for coal import remains intact • The potential ramp-up of high-CV coal production could offset the price headwinds Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only. 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 Coal Tracker: Our snapshot of coal markets Figure 1: Monthly coal production in PRC grew slightly Figure 2: Coal import from Indonesia to China surged in Jan-19 Figure 3: China power demand continues to expand YoY Source: National Bureau Statistics of PRC, PSR Source: Central Bureau of Statistics, PSR Source: National Bureau Statistics of PRC, PSR Figure 4: Indonesia coal price reference (HBA) stablised Figure 5: Qinhuangdao 5,500 GAR weekly FOB spot price Figure 6: Total port coal inventory was replenished Source: Coalspot.com, PSR Source: Bloomberg, PSR, NDRC price zones (red/blue/green) *Source: Bloomberg, PSR *The total port coal inventory includes coal stockpile at Qinghuangdao Port, Tianjin Port, Caofeidian Port, Guangzhou Port, Jingzhou Port, Lianyungang Port, Dandong Port, Jingtang Port, Yinkou Port, Qingdao Port, and Huanghuagang Port. Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only. 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.
US Weekly Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only. 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.
US Weekly
Macro Last Week
Umich consumer sentiment increase from 93.8 to 97.8 (Consensus: 95.3). That is still below the peak of 101.4 reached last
March
Industrial production edged up 0.1% in February (Consensus: 0.4%). The gains were concentrated in utility output and
mining. Auto output fell a slight 0.1% in March after a revised 7.6% decline in January.
Headline CPI inflation edged down to a two-and-a-half-year low of 1.5% in February, from 1.6%. Core inflation dropped to a
four-month low of 2.1%, from 2.2%.
The value of overall sales rose 0.2% after a 1.6% decrease prior month. Sales in the "control group" subset rose 1.1%
(Consensus: -2.3%)
Corporate
Adobe (ADBE) reported quarterly adjusted EPS of $1.71 (Consensus: $1.61). Revenue came in at $ 2.6bn (Consensus:
$2.55bn). Document Cloud achieving record revenue of $282 million. There is continued momentum for Adobe Creative
Cloud, Document Cloud and Experience Cloud.
Oracle (ORCL) reported quarterly adjusted EPS of $0.87 (Consensus: $0.84) and revenue of $9.618bn (Consensus:
9.608bn). Cloud services and license support: Revenue increased to $6.66 billion (+1% YoY). Cloud license and on‐premise
license: Revenue decreased to $1.25 billion (-4% YoY). Growth in the higher-margin autonomous database and in Gen 2
cloud will offset declines in legacy products
Week(s) Ahead – Key Indicators to be released
Fed interest rate decision – 21 Mar
13
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities
accepts no liability whatsoever with respect to the use of this document or its contents.Upcoming Earnings Release
Phillip Securities Research - Earnings Estimates
Earnings Expected Current Earnings Consensus Target Price Prior Period Prior Period Prior Period Prior Period
Name Expected EPS Surprise Amount Surprise Amount
Result Date Revenue Result Date ($USD) Actual EPS Expected EPS Actual Revenue Expected Revenue
FedEx Corp 20-Mar-19 2.80 17673 18-Dec-18 213.50 4.03 3.94 2.3% 17824 17687 0.8%
NIKE Inc 22-Mar-19 0.64 9609 20-Dec-18 89.00 0.52 0.46 13.0% 9374 9169 2.2%
Walgreens Boots Alliance Inc 02-Apr-19 1.49 34593 20-Dec-18 74.00 1.46 1.43 2.0% 33793 33886 -0.3%
BlackRock Inc 11-Apr-19 5.86 3187 16-Jan-19 472.00 6.08 6.28 -3.2% 3434 3433 0.0%
PNC Financial Services Group I 12-Apr-19 2.62 4270 16-Jan-19 138.00 2.68 2.78 -3.9% 4368 4395 -0.6%
JPMorgan Chase & Co 12-Apr-19 2.38 28543 15-Jan-19 115.00 1.98 2.21 -10.2% 26804 26896 -0.3%
Wells Fargo & Co 12-Apr-19 1.13 21020 15-Jan-19 56.00 1.11 1.19 -6.5% 21031 21733 -3.2%
Netflix Inc 15-Apr-19 0.59 4512 17-Jan-19 419.08 0.45 0.39 16.3% 4187 4206 -0.4%
Charles Schwab Corp/The 15-Apr-19 0.66 2703 16-Jan-19 53.00 0.65 0.64 2.6% 2669 2637 1.2%
Citigroup Inc 15-Apr-19 1.86 18716 14-Jan-19 76.00 1.61 1.55 4.1% 17124 17509 -2.2%
14
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Week 12 – China Weekly Musings
Jieyuan Zheng
Research Analyst
Phillip Securities Research Pte Ltd
18 March 2019
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.China Week 11 Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only. 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.
HK Stocks Recommendation
Price On Target Expected
Time Ticker Company Analyst Rating
Recommendation Date(HKD) Price(HKD) Return
24/1/2019 0839 China Education Group TL Buy 10.64 13.41 26%
29/1/2019 3320 CR Pharmaceutical EZ Accumulate 11.12 12.4 11.5%
1/2/2019 0175 Geely ZJ Buy 12.66 17.6 39%
4/2/2019 0178 Sasa TK Accumulate 2.98 3.2 5.84%
19/2/2019 600741 HASCO ZJ Accumulate 19.45 23 18%
21/2/2019 0835 China Education Group TL Accumulate 12.50 13.45 7.50%
28/2/2019 1044 Hengan TK Buy 63.15 77.5 22.7%
1/3/2019 2020 Anta Sports EZ Accumulate 45.4 50.8 12%
8/3/2019 0696 Travelsky Technology TL Accumulate 23.10 17.18 17.7%
12/3/2019 1211 BYD ZJ Accumulate 47.35 56.3 19%
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Week 12 - Phillip Singapore Weekly
Paul Chew
Head Of Research
Phillip Securities Research Pte Ltd
18 Mar 2019
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Week 12 – Short-term Views
Macro Last Week
SG macro: only retail sales saw 5% spike but affected by festive season
US macro: Retail sales still surprisingly weak at 3% YoY rise in January (2018: +5.4%); Fed meeting
focus will be on dot plots
EU macro: German industrial production weak but retail and services PMI modest recovery
Corporate/Sector Last Week
• SGX: MSCI-HKEX to launch MSCI China A futures (no launch date announced); SGX A50 is the only
offshore product for A shares and A50 is 40% total volume; volume + cross margin + currency; Mar19
quarter will be weak (Jan-Feb19 volume: Derivatives +2% YoY; Securities - 34% YoY)
Tactical
Short-term pause in rally: concerned of a possible near-term peak after negotiations between U.S.
and China concluded; rally not supported by economic data but large discounting by the market
Market rally once global data recovers; China stimulus – 3% pt VAT cut 1Apr19, reduce social security
contribution 1May19; widen fiscal deficit; open to more RRR and interest rate cut; 6-6.65% GDP 2019
Week(s) Ahead
19-20Mar: FOMC meeting; 24Mar: Thailand Elections; 17Apr: Indonesia ;18May: s.232 auto tariff
response; Other: Mueller investigations
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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.Week 12 – March will see a good rebound Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only. 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.
Ask questions!
Analysts
Phillip Securities Research Pte Ltd
Paul Chew, Head of Research
Tara Wong, Property | REITs
Natalie Ong, REITs
Chen Guangzhi, Oil and Gas | Energy
Tin Min Ying, Banking & Finance
Alvin Chia, Telco | Technology
Mike Zheng Jieyuan, China/HK Markets
Have an opinion or questions on our reports?
Post them in the comment section of the report! Edmund Xu, US Equity
Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only.
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 21
accepts no liability whatsoever with respect to the use of this document or its contents.Phillip Securities Research Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2019. All Rights Reserved. For internal circulation only. 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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