First Reit

First REIT’s 2Q DPU edges up to 2.15 cents

Yield is about 6.5% base on closing price of $1.33.

Looks pretty stable and decent DPU that may likely provide another form of fixed income portfolio.
I think yield is much better than PW Life reit which is about 4.8%.

I think still has room for it to rise further towards a yield of 5.5% for a Target price of $1.56.


SINGAPORE – 17 July 2018 – Bowsprit Capital Corporation Limited (“Bowsprit”), the Manager of First Real Estate Investment Trust (“First REIT” or the “Trust”), today reported a 0.5% year-on-year (“y-o-y”) rise in distribution per unit (“DPU”) to 2.15 Singapore cents for the second quarter ended 30 June 2018 (“2Q 2018”), on the back of distributable income increasing 1.6% y-o-y to S$16.9 million.

 For the quarter under review, gross revenue rose 5.3% y-o-y to S$28.9 million, while net property income (“NPI”) increased 5.0% to S$28.5 million. For the six-month period, gross revenue and NPI grew 5.5% and 5.4% to S$57.6 million and S$56.9 million respectively, while distributable income edged up 1.7% to S$33.8 million. As at 30 June 2018, First REIT’s gearing stood at 34.2% with interest cover at 4.9 times.

 The Trust remained prudent with its capital structure and is exploring various financing options for its refinancing needs.


  Key highlights in 2Q 2018

• DPU up 0.5% to 2.15 Singapore cents compared to 2.14 Singapore cents in 2Q 2017

• On an annualised basis and based on closing price of S$1.33 as at 29 June 2018, the latest distribution translated to a yield of 6.5%

• Secured a S$100 million term loan facility from CIMB Bank Berhad, Labuan Offshore Branch, with a tenure of six months and an option to extend for another six months. The loan was fully drawn down to refinance First REIT’s S$100 million Fixed Rate Notes due on 22 May 2018

Outlook

 Indonesia’s gross domestic product grew 5.06%1 year-on-year in the first quarter of 2018, at a slower pace compared to the previous quarter, due mainly to sluggish consumption. To reduce reliance on domestic consumption, the Indonesian government has implemented several deregulation measures to attract more investment. Last year, Indonesia recorded 8.5% more foreign direct investment in Rupiah terms than in 2016.2 Meanwhile, rising interest rates in the US have weakened the Rupiah in recent weeks, causing Bank Indonesia to raise interest rates to support the Rupiah. However, this has no impact on the Trust’s borrowings as its loans are originated in Singapore and denominated in Singapore dollars.

BMI Research reported that healthcare spending in Indonesia amounted to Rp403.9 trillion in 2017 and projects it to rise to Rp1,224 trillion by 2027, and that healthcare spending per capita will more than double between 2017 and 20273 . Against this trend, together with the growing nationwide adoption of the national health insurance scheme, private healthcare demand will continue to rise. As such, First REIT remains well-positioned for further growth, with a strong acquisition pipeline of around 40 hospitals in Indonesia from its Sponsor, PT Lippo Karawaci Tbk

Distribution Reinvestment Plan ("DRP") The DRP will not be applicable for this quarter.

 All Unitholders will be receiving 2Q 2018 DPU of Singapore 2.15 cents in cash, payable on 24 August 2018. The Manager may consider applying the DRP at a later date and Unitholders will be notified accordingly.

TA wise, MACDd & Stoch is showing sign of a positive divergence and it may likely continue to rise higher.

Looks like the same chart patterns may likely repeat itself and rises higher towards $1.40 when nearer to ex.dividend date of 23rd July 2018.
Pay date on 24th August 2018.

Keppel Corp

US crude sinks 4.2%, settling at $68.06, after Treasury Dept eases market's Iran sanctions fears

• U.S. Treasury Secretary Steve Mnuchin said some oil buyers could get waivers to continue buying Iranian supplies despite American sanctions on the Middle Eastern country.
• Concerns about the aggressive U.S. policy to remove Iranian barrels from the market have raised oil prices in recent weeks.
• Oil prices slipped earlier on Monday as concerns about supply disruptions eased and Libyan ports reopened.(cnbc.com)

From TA point of view, it is yradtra below it's 20 , 50 , 100 and 200 days moving average, this is rather bearish.

Short term wise, it may likely go lower to revisit the recent low of $6.56. Breaking down of this price level would be quite negative and may see the price sliding further towards $6.46 then $6.35 with extension to $6.20.

Not a call to buy or sell.

Please do your own due diligence.

Keppel Corporation Limited, an investment holding company, engages in the offshore and marine, property, and infrastructure businesses in Singapore, China, Brazil, other Far East and ASEAN countries, and internationally. It constructs, fabricates, and repairs offshore production facilities and drilling rigs, power barges, specialized vessels, and other offshore production facilities; researches and develops deepwater engineering works; engineers, constructs, and fabricates platforms for the oil and gas sector; undertakes shipyard works and other general business activities; and procures equipment and materials for the construction of offshore production facilities. The company is also involved in the trading and installation of hardware, industrial, marine, and building related products; provision of leasing services; sourcing, fabricating, and supply of steel components; ship repairing, shipbuilding, and conversion activities; marine contracting and ship owning business; painting, blasting, and process and sale of slag; property investment, management, and development activities; fund management; golf and hotel ownership and operation; development of marina lifestyle and residential properties; trading of construction materials; development of district heating and cooling systems; electricity generation and supply, and general wholesale trade businesses; purchase and sale of gaseous fuels; and trading of communication systems and accessories. In addition, it offers jacking systems, and heavy-lift equipment and related services; project management and procurement, towage, financial, real estate investment trust management, logistics and supply chain, warehousing and distribution, data center facilities management, travel agency, and metal fabrication services; housing services for marine workers; and technical consultancy for ship design and engineering works, as well as solid waste treatment solutions. The company was incorporated in 1968 and is based in Singapore.

Sembcorp Ind

From TA point of view , it has again broken down the recent low of $2.61 level, this is super Bearish.

Short term wise, it may likely go down to revisit $2.50 then $2.44 with extension to $2.40.

Looking through their financial numbers for the past 5 years , Total revenue has been declining $10.8b in 2014 to $8.9b in 2018.

Net Income has seen a greater declined from $801m in 2014 to $191m in 2018. A drop of almost 300+%. Doesn't looks good!

Diluted EPS has also been declining from 26 cents in 2014 to 11 cents in 2018.

Dividend has seen a greater cut from 16 cents in 2014 to 5 cents in 2018 .
Yield is about 1.93% base on current price of $2.59. I think is not attractive.

Net Income margin has been declining from 7.35% in 2014 to 2.12% in 2018. Another weak factor that you may want to take note of .

Not a call to buy or sell.

Please do your Own due diligence.

Sembcorp Industries Ltd engages in the utilities, marine, and urban development businesses. The company’s Utilities segment provides energy, water, on-site logistics, and solid waste management services to industrial, commercial, and municipal customers. Its activities in the energy sector include power generation and process steam production, as well as natural gas importation and retail; and water sector comprise wastewater treatment, and production and supply of reclaimed, desalinated, and potable water, as well as water for industrial use. This segment has approximately 11,000 megawatts of gross power capacity; and manages facilities that provide approximately 9 million cubic meters per day of water. Its onsite logistics and services include service corridor, chemical storage, and terminalling facilities, as well as hazardous waste incineration and industrial gases supply services; and solid waste management services, such as municipal, industrial and commercial, construction and demolition, and bio-hazardous waste collection services, as well as post-collection treatment and waste-to-resource services. The company’s Marine segment provides integrated solutions for the marine and offshore industry, such as rigs and floaters, repairs and upgrades, and offshore platforms and specialized shipbuilding. Its Urban Development segment owns, develops, markets, and manages integrated urban developments comprising industrial parks, as well as business, commercial, and residential spaces. The company’s Others/Corporate segment includes businesses relating to minting, design, and construction activities; and offshore engineering and others. It operates in Singapore, China, India, rest of Asia, the Middle East, Africa, Europe, Brazil, the United States, and internationally. The company was formerly known as Minaret Limited and changed its name to Sembcorp Industries Ltd in July 1998. The company was incorporated in 1998 and is headquartered in Singapore.

Raffles Med Shield Plan

16  July  2018  –  Singapore,  RafflesHealthinsurance  (RHI),  a  fully  owned  subsidiary  of RafflesMedicalGroup,  announced the  launch  of  Raffles  Shield,  making  it  the  seventh  player to  enter  the  industry.  Raffles  Shield  is  the  first  Integrated  Shield  Plan  (IP)  developed  in collaboration  with  RafflesMedicalGroup  and  a  Medisave-approved  IP  providing  coverage for  hospital  and  surgical  expenses.

“As  a  health  insurance  specialist  and  as  part  of  a  healthcare  group,  we  have  the  unique advantage  of  understanding  the  business  of  both  healthcare  and  insurance. 

We  have  been studying  the  Shield  market  for  a  while  now  and  appreciate  the  challenges  that  it  faces.  We are  confident  that  we  can  now  offer  a  product  that  meets  the  changing  needs  of  the  market,” shares Ms  Christine  Cheu,  General  Manager,  RafflesHealthinsurance. The  plan  comprises  MediShield  Life,  a  national  health  insurance  plan  administered  by  the Central  Provident  Fund  Board,  and  an  additional  private  insurance  coverage  administered  by RafflesHealthinsurance  which enhances  the  basic  coverage  provided by  MediShield Life.   RafflesHealthinsurance  has  observed  that  many  who  purchase  IPs  are  keen  to  have private  hospital  coverage  without  overly  expensive  premiums,  and  would  like  to  have  more flexibility  to  manage  their  premiums.  In  response  to  this,  Raffles  Shield  offers  two  attractive options  –  the  Raffles  Hospital  Option  and  the  High  Deductible  Option. On  top  of  this,  there  are  two  riders  that  policyholders  can  add  on  to  enhance  their  coverage.

The  Premier  Rider  provides  additional  benefits  such  as  immediate  family  accommodation and  Traditional  Chinese  Medicine  coverage.  The  Key  Rider  reduces  the  amount  that policyholders  co-pay.  It  is  in line  with MOH’s  co-payment  requirement  for  new  riders.   RafflesHealthinsurance  is  also  ready  to  offer  unique  coverage  to  individuals  with  certain pre-existing  conditions  and  work  with  them  through  the  Raffles  Care  Management Programme  to  improve their  overall  well-being. 



After touching the low of 98 cents, it has staged a strong rebound and rises higher to touch the high of $1.06 today, this is rather bullish.

Today the share price rises also accompany with high volume which is a healthy sign that the momentum may continue to head higher.

Short term wise, likely to move up to retest $1.10 with extension to $1.15 .

I think current price level may attract some bargain hunter interest.

Trade / invest base on your own decision.

 The potential catalysts are the two new China hospitals which will contribute to it's earnings growth going forward. Even if the initial execution meets with hiccups, I think they will be able to work things out for the longer term as I am confident they have already done their extensive due diligence and ground studies before embarking on the new hospitals. And it is not just one but two new hospitals set up in two separate cities in China. To be able to trigger such a huge expansion project, they must have worked out that on a long term basis, the market there in China have tailwinds favouring demand for private medical healthcare. And Chongqing and Shanghai are two of the largest cities in China which are strategically located with high population and considered few of the important economic centres of China apart from Beijing.

Total Revenue has been consistently increasing from $340.99m in 2013 to $477.58m in 2017.

The Total Revenue is growing at a CAGR of 8.1%. A single digits high ,of which I think is quite good already.

 Operation cash flow has been quite healthy as they are able to generate $71.19m in 2013 to $82 .69m in 2017.

 Net income Margin has been generally declining from 24.89% to 14.82% in 2017.

It might be due to higher material /operation costs. NAV of 40.01 cents. EPS of 4 cents. PE of 27.64 times

 Dividend has been generally increasing from 1.7 cents in 2013 to 2.2 cents in 2017. This is really a welcome news for shareholder .

 For RMG, I have two possible fair values depending on how well it can execute it's new expansion and growth of it's Bugis hospital extension and also it's two China hospitals to grow it's EPS.

For the conservative fair value, it is $1.14 assuming a CAGR of 10% on it's EPS for next 7 years.

 For the more aggressive fair value, it is $1.46 assuming a CAGR of 14% on it's EPS for next 7 years. Thus, any price $1.14 and below is a bargain opportunity to me.

not a call to buy or sell. Please dyodd.

Raffles Medical Group Ltd engages in the medical clinics operation and other general medical service businesses primarily in Singapore. The company operates through three segments: Healthcare Services, Hospital Services, and Investment Holdings. Its flagship hospital is Raffles Hospital, a tertiary care hospital that offers services, including emergency, cancer, children and women care, traditional Chinese medicine, counselling, dental, diabetes and endocrinology, dialysis, ear nose and throat, eye, family medicine, fertility, health screening, heart, internal medicine, international patients services, neuroscience, pain management, rehabilitation, radiology, Japanese clinic, orthopaedic, skin and aesthetics, surgery, urology, and nuclear medicine services for inpatients and outpatients. The company also operates 100 medical clinics that provide various services, such as general practice/family medicine, emergency, health check, health screening, immunization, travel health, specialty, minor surgery, X-ray, pre-marital screening, and corporate programs; provides health and related insurance; trades in pharmaceutical and nutraceutical products, and diagnostic equipment; and provides healthcare management and consultancy services, as well as specialized medical, medical laboratory, imaging center, dental, and clinical services. In addition, it owns properties; develops IT solutions; provides advisory and medical emergency assistance services; and sells medical kits. The company was founded in 1976 and is based in Singapore.

SATS

It seems that the boat is back for those that are eyeing for this counter.
The current price of $5.11 may go higher before ex.dividend of 12 cents .

Chart wise, looks like it may move up to re-attempt $5.27 level.

Not a call to buy or sell.

Please do your own Due diligence.


The latest FY 2017 result : Group revenue was $1.725B

• Operating profit dipped 1.8% to $226.4M

• Share of results from associates and JVs rose 9.2% to $71.2M

• PATMI grew 1.4% to $261.5M • ROE remained creditable at 16.2%

• Free cash flow generated was $146.3M

• EPS improved by 0.9% to 23.4 cents

• Proposed final dividend of 12 cents per share will increase full year dividend by 1 cent to a total of 18 cents

NAV of $1.425

PE of 22.4x

Yield of 3.4% base on current price of $5.25 per share.

Dividend has been constantly increasing from 2013 to 2017.

Net Profit margin has also been generally increasing which is quite positive .

Let us take a look at the financial results numbers for past 5 years:

Hi Sporeshare@jeremyowtaip, SATS was an investment idea that I almost wanted to get in last year when it was trading around $4.60+ region. However, wonder if I was unlucky or what, the share price shortly after I had finished my due diligence started to move higher as though it disliked me from buying it. Thus, I held back and did not chase it at higher price. I was in fact hoping to get it even lower at $4.50 back then but since the price did not go lower but instead went higher, I gave up and moved on to other stock ideas.

Back then I took an interest in SATS after hearing my father talked about how my uncle entered this stock some years back when it was still trading about $1 plus to $2 plus region. My uncle held it until now and it is now at $5+ when he at least double to triple his initial capital. Well, this is not something to scream about over the past decade as there were even stocks which performed much better than SATS in their share price growth. But, it is at least better than punting a wrong penny stock and made losses along the way over the past decade.

Thus, I think my uncle who has very limited investment knowledge also knew how to exercise his common sense to pick reasonably good stocks (though may not be one of the best performing stock) at a cheap price and keep holding it until now to reap such a return on his capital turning in a 2 to 2.5 bagger over the past decade. That equates to a similar performance to ETFs or low cost fund which track S&P500 index that also became a 2.5 bagger over the past decade. This is still a somewhat decent showing of SATS share price performance over the past decade.

The revenues of SATS have compounded over the past 9 years at compounded annual growth rate (CAGR) of 6.78%. The operating income (EBIT) has compounded over the past 9 years at CAGR of 3.2%. The net income has compounded over the past 9 years at CAGR of 3.77%. The EPS has compounded over the past 9 years at CAGR of 3.6%.

The operating cash flows has compounded over the past 9 years at CAGR of 7.97%. The capital expenditure has compounded over the past 9 years at CAGR of 21.73%. The free cash flows has compounded over the past 9 years at CAGR of 5.21%. The dividends per share has grown from 10 cents 9 years ago to now 16 cents.

The returns on assets, returns on equity and returns on invested capital have took a retreat over the past 9 years but have recovered again in the recent few years back to the same levels as 9 years ago.

If we look at the past 9 years performance of SATS in terms of it's profitability in compounded growths in revenues, operating income, net income and EPS, all the CAGRs of the respective metrics point towards one conclusion. This is a steady but slow growth company. Even though it maybe making some progress in it's topline growth, it's bottom line did not follow the same growth rate and instead only turn out a low single digit compounded growth rate.

If we look at the cash flows trend, this is definitely a cash generating machine albeit not a high growth rate in generating cash. In fact, it's compounded growth in capital expenditure is much higher than compounded growth in operating cash flows and free cash flows. It has invested increasingly a lot more money in capital expenditures in order to generate cash inflows. However, if we look at the ratio of free cash flows to capital expenditures over the past 9 years, the amount of free cash flows generated in any one single year was always about twice or more than twice the amount of capital expenditure. This company was generating hell lots of free cash flows even if it increasingly need to spend more in capital expenditure. No wonder the share price has performed reasonably well over the past 9 years even though not something super fantastic to scream about.

It's current 9M17-18 financial results seems to picture a flat results y-o-y with almost everything from revenue, operating income, net income, EPS, operating cash flows being flattish. Maybe that could be partly the concern why it's share price did not went any much higher but instead dropped from it's peak of $5.85 to now $5.00 after the recent 9M results were announced.

Let's look finally at the valuation with this updated set of 9M17-18 results. If we assume that it's EPS will continue to grow at same CAGR of 3.6% and this could be a reasonable CAGR given that SATS really is not a high growth company anymore. In it's recent financial reports, even though they mentioned some possible areas of growth they are looking at and investing in, it does not seem to really boost their growth currently by any large magnitude. Well, at current large revenue level of $1.73 billion, I guess it is not easy for SATS to grow at any meaningful high double digit growth rates anymore going forward. Maybe they could turn in any single year of superb growth. But to sustain at such high double digit growth rates over the longer term may not be an easy feat for them at their current large size and also in their competitive environment. The management also acknowledges that their operating business environment is challenging and meets with cost pressure.

Using my method of estimation, at current share price of $5, the market is according a CAGR of 6.4% over the next business cycle (7 years forward) for the EPS of SATS. If we assume SATS will follow it's historical CAGR of 3.6% for it's EPS, then a fair value for it's share price will be around $3.69.

However, there could be a twist in this. Over recent two years, the EPS has grown faster than over previous period. If SATS can indeed produce a better CAGR on it's EPS perhaps around 5%, then using my method of estimation again, it's fair share price will be $4.35.

Thus, there are two possible fair values now for your consideration.
The more conservative fair value is around $3.69. The more optimistic fair value is around $4.35. In any case, this means that the share price of SATS is currently overvalued and has possible room to fall to it's fair value. This fall in share price could be likely should the full year FY17-18 results ending in Mar 18 remains flattish or see a marginal decrease which is not impossible since the 9M17-18 results are already flattish. Let's see whether SATS FY17-18 results to be announced in another about two months time will surprise on the upside or confirm my thinking that it could be a flattish year for them in their performance.

theintelligentinvestor

Reply to @jeremyowtaip : Great analysis! I have similar view that the topline is growing faster than the bottom line, like most instances, is because the business needs higher Capex to have incremental growth. I prefer the lower capex to grow type of businesses, but they are hard to find and also not cheap.

But having said that, I think overall the earnings power is still there, they have a nice moat around their business, and generating good earnings and cash flow. A 3.6% growth will mean doubling the business every 20 years. For me I don’t have problem with low growth businesses, I have some stocks that are also in the same moderate range of 3-5%. What is left is the price, at PE 21, it is on the overvalued side. But if I have bought this like your uncle at $2, I will likely keep holding it, as fundamentally it is still the same, only thing has changed is the price.

Company bought back share:

SATS did a series of share buy backs recently from mid-Feb to now. I noticed their prices they bought ranged from $4.99 to $5.20. The funny thing and irony is that you posted your comment just after they announced up till their latest share buy backs in this recent series of share buy backs. The management think their share price is cheap to have done share buy backs at current prices while we were discussing that the current share price is overvalued. I will still stand by my view that their share price is currently overvalued. What an irony here! Haha!

Not a call to buy or sell.

Please do your own due diligence.

AEM

Indeed AEM has managed to bounce-off from the low of 97 cents and stage a nice rebound to touch$1.10 on 13th July 2018 ,this is rather positive.

It has managed to reclaimed its 20 days moving at about $1.07, this is pretty encouraging/bullish!

Short term wise, likely to see it move up to re-attempt $1.17 level. Breaking out with ease + good volume that may propel to drive the price higher towards $1.42 with extension to $1.53.

Not a call to buy or sell.

Please do your own due diligence.


24th June 2018:
AEM has been driven into a super oversold territories. The share price after hitting all time high of $1.91, it has since corrected sharply and went down to touch the low of 97 cents .

Current share price of 98.5 cents is trading at a PE of less than 8x, looks rather undervalue.Trailing EPS of about 13 cents and cash-on-hands of about $42.8m ,Zero debts, net cash per share is about 16 cents .




Company is expected to make about $42.2m Gross profit for FY 2018.

Looks rather overly extended!
I think short term wise, we may likely see a rebound !




Not a call to buy or sell.

Please do your own due diligence.





AEM Holdings Ltd, an investment holding company, provides solutions in equipment systems; and precision components and related manufacturing services for various industries. It operates through Equipment Systems Solutions and Precision Component Solutions segments. The company provides high density modular test handlers, wafer handling systems, hot spot testers, and smartcard backend handlers for use in semiconductor, solar cell, and smartcard manufacturing facilities, as well as related tooling parts; and designs, develops, and manufactures precision engineering products, such as test sockets, device change kits, stiffeners, golden units, holding jigs, preventive maintenance kits, and precision mechanical assembly modules for use in the electronic, life science, instrumentation, and aerospace industries, as well as offers engineering services. It also engages in the research, development, and production of communications and industrial test solutions. The company offers its products through a network of sales offices, associates, and distributors in Asia, Europe, and the United States. AEM Holdings Ltd is headquartered in Singapore.