APAC Realty | Buy
Broker: DBS Group Research, Feb 26
Feb 23 close: $1.10
Target price: $1.25
ERA Realty, a wholly-owned subsidiary of APAC Realty, is one of Singapore's largest real estate agencies with 5,882 registered agents as of January. We believe it is poised to deliver growth on the back of a turn in the Singapore residential market.
Having a strong track record and a sizeable agent base is a key winning formula for ERA. Last year, ERA's market share grew to around 38 per cent in terms of transaction value, up from about 32 per cent in 2015.
ERA has a pipeline of more than 11,000 units across 20 new project launches till the third quarter of this year, which is higher than the units secured for the entire 2017.
Moya Holdings Asia | Buy
Broker: RHB Research, March 2
March 2 close: 8.9 cents
Target price: 15 cents
Moya reported a strong FY2017 following the accretion of Aquatico's numbers, with top-line and net profit after tax surging 381 per cent to $132 million and 137 per cent year-on-year to $7.7 million respectively.
Moya generated $20.9 million from its operations in Q4 of 2017. We expect it to generate around $80 million cash from its operations a year in FY2018. We do expect 2018 to be a superb year for Moya.
More potential acquisitions are likely. It is likely to continue to acquire and consolidate the Indonesian private water-treatment players, which would further boost earnings growth. However, we lowered FY2018 forecast profit after tax and minority interests by 10 per cent to account for higher amortisation and financing costs.
Golden Agri-Resources | Reduce
Broker: CGS-CIMB Research, Feb 27
Feb 28 close: 36 cents
Target price: 31 cents
Golden Agri-Resources' FY2017 core net profit came in below expectations - mainly due to lower FFB or fresh fruit bunch production - accounting for only 70 per cent of our and 60 per cent of Bloomberg consensus full-year net profit forecasts.
The group blamed the lower-than-expected Q4 2017 FFB output on the El Nino drought in 2015. It projects strong recovery in FFB yields for this year and expects FFB output to increase by 8 to 10 per cent.
The group indicated plans to accelerate its replanting efforts to 15,000 ha this year versus 9,900 ha in 2017. Its palm oil inventory level stood at 480,000 tonnes as of end-December 2017, higher than the 587,000 tonnes as of end-September 2017. The group also revealed that it has sold its Tianjin plant for US$111 million (S$147 million) and targets to complete the disposal in Q2 2018. In view of this, it provided impairment of US$20 million for the plant in Q4 2017.
We cut our earnings forecasts by 13 to 15 per cent for FY2018-19 to reflect our lower FFB output assumptions in view of the group's plan to accelerate replanting of its estates. This results in a lower target price of 31 cents (still based on 15 times five-year historical price earnings). We kept our "reduce" call due to concerns over its unexciting output prospects as the average age of its estates is 16 years. Key upside risks are higher-than-expected CPO prices and production.
