Thai Beverage Public Company I Buy
Target price (12-month): $1.07
Nov 24 close: $0.97
DBS Research, Nov 24
ThaiBev's financial year 2017 fourth-quarter results were within expectations. Headline net profit for FY2017 surged 82 per cent year-on-year to 34.5 billion Thai baht (S$1.4 billion).
This was partly due to one-off fair value gains recognised by its associate Fraser & Neave for its investment in Vinamilk.
Excluding this and comparing with a similar 12-month period for FY2016, core net profit was up by 4.6 per cent year-on-year to 26 billion Thai baht, which is within expectations.
This was despite a relatively slow first nine months of FY2017 due to the mourning period in Thailand.
We reiterate our "buy" recommendation on ThaiBev and it remains one of our large-cap top picks in the consumer sector.
We expect performance to improve on the back of recovery in consumption, post a year-long mourning period.
On a longer-term horizon, we believe its ongoing transformation into a regional beverage player will help to further re-rate the counter.
Wheelock Properties (S) I Buy
Fair value: $2.27
Nov 24 close: $1.91
OCBC Research, Nov 24
Boosted by the turnaround in the domestic residential market, Wheelock's projects are now mostly sold.
The group recently reported quarterly results, with FY2017 third-quarter Patmi (profit after tax and minority interests) increasing 72.1 per cent year-on-year to $48.8 million. This was broadly in line with expectations. For the year to date, revenues for the first nine months of FY2017 fell 26 per cent year-on-year, mostly due to lower sales at Ardmore Three and Panorama, partially offset by higher sales at the Fuyang City project and Scotts Square.
Due to lower gains on disposal of the group's investment in quoted securities, the other income line item for the first nine months of FY2017 also fell.
With Panorama's completion, Wheelock also carried out a $12 million write-back of diminution in value made on the project. The group's balance sheet further strengthened with $607 million in cash and equivalents and is in a net cash position.
Currently at 0.74 times price-to-book, the stock remains attractively priced. Maintain "buy" with an unchanged $2.27 fair value estimate.