SMC Monthly - DBS Research 2016-07-15: Review of Jun-16 Picks

SMC Monthly - DBS Research 2016-07-15: Review of Jun-16 Picks ASSET MANAGEMENT LIMITED D1R.SI MM2 ASIA LTD 43D.SI JUMBO GROUP LIMITED 42R.SI CITYNEON HOLDINGS LIMITED 5HJ.SI JAPFA LTD UD2.SI

SMC Monthly - Review of Jun-16 Picks


Indices up by nearly 2.7% on average since last issue (13th June – 14th Jul): 

  • FTSE STI: 2785.43 to 2906.92/ +4.4% 
  • FSTS Index: 390.80 to 392.70/ +0.5% 
  • FSTM Index: 667.66 to 689.31/+3.2%


Our conviction BUYs outperform, gaining 6.4% on average...

  • Between 13th June and 14th Jul, our BUY picks gained 6.4% on average, outperforming the STI, small-cap index (FSTS Index) and mid- cap index (FSTM Index), despite gains on the STI, FSTM Index and FSTS Index of 4.4%, 3.2% and 0.5% respectively.


Japfa and Cityneon, up 12.2% and 11.5% m-o-m, respectively, were our best performing conviction picks for June 2016... 

  • Unsurprisingly, Japfa’s shares continued to gain traction, as it posted gains for the fifth consecutive month, which we believe is mainly led by expectations of strong growth this year and higher ASPs for DOCs.
  • After VHE announced three additional locations for its travelling (non-permanent) exhibitions in Australia, Singapore and Taiwan, Cityneon’s shares surged up to a high of S$0.97 during the last four weeks.
  • Since our last issue, we have adjusted Cityneon’s earnings forecast up by 14% for FY17F and 11% FY18F, after raising the number of travelling sets assumed to seven (from six previously) by end of FY17, which translated to a higher TP of S$1.20.

...while Jumbo Group [10.3% m-o-m] also did well. 

  • F&B group, Jumbo, climbed to a high of S$0.655 during the month, after it announced 49% growth in profits y-o-y, from S$3.9m in 2Q15 to S$5.82m in 2Q16.
  • Since our last issue, we also revised our TP slightly from S$0.68 TO S$0.69, as we pegged our valuation at 23x FY17F PE.

...even as mm2 Asia was flat for the month, and new BUY idea ARA Asset Management, was down 2.9%


  • Having had a stellar run-up since the start of the year (from S$0.40 in end-Dec up to S$0.70 on 4th Jul), mm2 appeared to be trading range-bound most of the month.
  • Meanwhile, ARA Asset Management underperformed the indices as it closed the month down 2.9%. However we continue to like the Company as it is well positioned to capture AUM from capital partners which the group is targeting. Countries of interests are Australia, China, Korea, and potentially Japan.










Paul YONG CFA DBS Vickers | Singapore Research Team DBS Vickers | http://www.dbsvickers.com/ 2016-07-15


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