F&N: OUTPERFORM with TP: S$6.40 - S$6.50
- Growing breweries. It performed exceeding the expectations, with New Zealand, Mongolian and Indochina giving a helping hand. The parent company, saw a grew of 4-5% Q-o-Q.
- 3Q10 net at S$130.6m. After 2 previous quarters of strong growths, 3Q net profit came within expectations at S$130.6m, on a topline of S$1.4bn.
- Is more residential business going on? It grew at least 17% QoQ, as revenue from persold projects grew. CL forecast severe margin contractions, which will continue in 2010.
Residential business – Going strong. More redevelopment? Residential revenue grew 17%QoQ, as FNN recognised revenue from presold projects. On conservative terms, new projects can add S$0.05 and S$0.12/share estimate. Business operation in China and Australia progressed on plan.
Source: CL, DB, CIMB
Tuesday, August 17, 2010
Monday, August 16, 2010
Comfort Delgro
Result note - Boosted by stronger A$ - by Germaine Khong
2Q10 core net profit of S$58.2m (+1.6% yoy) was broadly in line with our estimate (S$58.3m) and consensus, accounting for 26% of our full-year estimates. 2Q10 group revenue was up 4.1% yoy to $789.3m thanks to growth in most business segments. Revenue growth was also boosted partially by a positive forex translation effect ($15.2m) thanks to a stronger A$, offset partially by weaker οΎ£ and RMB. We maintain our earnings estimates. Our target price rises from S$1.64 to S$1.83 (WACC: 10.4%, terminal growth: 2%), after removing a 10% discount to our DCF valuation as we believe that currency risks have been priced in. Maintain Outperform on the back of
OUTPERFORM - Maintained, S$1.55 - Tgt. S$1.83, Land Transport
Source: CIMB
2Q10 core net profit of S$58.2m (+1.6% yoy) was broadly in line with our estimate (S$58.3m) and consensus, accounting for 26% of our full-year estimates. 2Q10 group revenue was up 4.1% yoy to $789.3m thanks to growth in most business segments. Revenue growth was also boosted partially by a positive forex translation effect ($15.2m) thanks to a stronger A$, offset partially by weaker οΎ£ and RMB. We maintain our earnings estimates. Our target price rises from S$1.64 to S$1.83 (WACC: 10.4%, terminal growth: 2%), after removing a 10% discount to our DCF valuation as we believe that currency risks have been priced in. Maintain Outperform on the back of
OUTPERFORM - Maintained, S$1.55 - Tgt. S$1.83, Land Transport
Source: CIMB
Dividends
"Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.
When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend." - Wikipedia.
There are 3 types of dividends that you should know:
1) Know their declaration date. It is important as the company will pay the dividends on that exact day.
2) Record date. The company that are declaring the dividends will have to compile all the informations to the shareholders.
3) Ex-dividend date. It allows the investors to catch the last bus up for the dividend payments. It will allow the pending transactions for stock bought to clear before it cashes out money to all shareholders.
So, why buy stocks that gives out dividends? One, it is bonus money. Secondly, it is low risk as these companies are strong, stable and mature companies. They have alot of cash reserves. As their cash reserves grow, debts going low, value is going higher and higher, its all a win-win situation for all.
There are people who try to get in the wagon just in time before the announcements of dividends, they buy it before and sell it right after collected the dividends. Why not, right? You will get extra pocket money at no cost at all. Keep dreaming!
This usually doesn't work, because the stock price usually adjusts immediately to reflect the dividend payout, as interested buyers know the stock no longer includes the current dividend payment and they adjust the amount they're willing to pay accordingly.
When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend." - Wikipedia.
There are 3 types of dividends that you should know:
1) Know their declaration date. It is important as the company will pay the dividends on that exact day.
2) Record date. The company that are declaring the dividends will have to compile all the informations to the shareholders.
3) Ex-dividend date. It allows the investors to catch the last bus up for the dividend payments. It will allow the pending transactions for stock bought to clear before it cashes out money to all shareholders.
So, why buy stocks that gives out dividends? One, it is bonus money. Secondly, it is low risk as these companies are strong, stable and mature companies. They have alot of cash reserves. As their cash reserves grow, debts going low, value is going higher and higher, its all a win-win situation for all.
There are people who try to get in the wagon just in time before the announcements of dividends, they buy it before and sell it right after collected the dividends. Why not, right? You will get extra pocket money at no cost at all. Keep dreaming!
This usually doesn't work, because the stock price usually adjusts immediately to reflect the dividend payout, as interested buyers know the stock no longer includes the current dividend payment and they adjust the amount they're willing to pay accordingly.
Annual Reports
How do you read an annual report? Well, it's up to you.
What do you want from them?
a) Profits
b) Dividends
c) Risk / Stability
d) Growth
Reading Annual Reports are like decoding "MonaLisa". It is not a 5 years old kid book.
There are 8 sections in most annual reports. Not all reports will have all the sections or the same type and amount of information. Here are the sections, what you'll find in each, and questions you should ask yourself:
Chairman of the Board Letter: Should cover changing conditions, previous objectives met or missed and upcoming objectives, and actions taken or not to be taken. Is it well written? Read between the lines; what is being apologized for?
Sales and Marketing: Should cover what the company sells, how, where and when. Is it clear where it's making most of its money presently? Is the scope of lines, divisions and operations clear?
Management Discussion: Is it a clear discussion of significant financial trends over the past few years? How candid and accurate is it?
Financial Statements: Check sales, profits, R&D spending, inventory and debt levels over time. Read the footnotes to ferret out other information. (the balance sheets, the cash flow statements, and the income statements), which are discussed in detail in the Financial Statements section.
Subsidiaries, Brands and Addresses: Where is their headquarters? Is it clear what lines, brand names the company has and what their overseas distribution network is?
List of Directors and Officers: How many directors are insiders and how many are outsiders (a good mix is ideal)? Are the directors well-known and respected? Are there an unusual number of directors (5 to 12 is typical)?
Stock Price History: General trend of price over time. Up or down? On which exchange is the company listed? Do they have a history of paying dividends?
Qouted from IG.
What do you want from them?
a) Profits
b) Dividends
c) Risk / Stability
d) Growth
Reading Annual Reports are like decoding "MonaLisa". It is not a 5 years old kid book.
There are 8 sections in most annual reports. Not all reports will have all the sections or the same type and amount of information. Here are the sections, what you'll find in each, and questions you should ask yourself:
Chairman of the Board Letter: Should cover changing conditions, previous objectives met or missed and upcoming objectives, and actions taken or not to be taken. Is it well written? Read between the lines; what is being apologized for?
Sales and Marketing: Should cover what the company sells, how, where and when. Is it clear where it's making most of its money presently? Is the scope of lines, divisions and operations clear?
10 Year Summary (or less): Is this included? Have revenues and profits increased each year?
Management Discussion: Is it a clear discussion of significant financial trends over the past few years? How candid and accurate is it?
Financial Statements: Check sales, profits, R&D spending, inventory and debt levels over time. Read the footnotes to ferret out other information. (the balance sheets, the cash flow statements, and the income statements), which are discussed in detail in the Financial Statements section.
Subsidiaries, Brands and Addresses: Where is their headquarters? Is it clear what lines, brand names the company has and what their overseas distribution network is?
List of Directors and Officers: How many directors are insiders and how many are outsiders (a good mix is ideal)? Are the directors well-known and respected? Are there an unusual number of directors (5 to 12 is typical)?
Stock Price History: General trend of price over time. Up or down? On which exchange is the company listed? Do they have a history of paying dividends?
Oceanus
Recommend: BUY with target price of S$0.40
Cutting the loss-making restaurants.
Oceanus has shut down 5 of its restaurants due to loss of RMB8m in Beijing and Shanghai. F&B side has been pulling the stocks down as it is affecting the its whole operation. Meanwhile, Oceanus has opened a new restaurant in Taiwan which targets consumers from middle to upper income
group, in contrast to its previously opened restaurant outlets which target consumers from the average income group.
Expanding the abalone tanks.
It's their main products, adding more tanks (at least 1000) in 1H10. Oceanus is expecting to have at least 32,000 tanks, now have 26,000 tanks. Currently, land is not a problem for Oceanus as they have more than enough land to store all the tanks.
We like Oceanus for its
1) sheer abalone
farming capacity, and
2) low abalone production cost.
Key risks to our call are
1) lack of appetite from Chinese consumers for abalone, and
2) continuing and/or worsening losses of its F&B outlets.
Source: DMG
Cutting the loss-making restaurants.
Oceanus has shut down 5 of its restaurants due to loss of RMB8m in Beijing and Shanghai. F&B side has been pulling the stocks down as it is affecting the its whole operation. Meanwhile, Oceanus has opened a new restaurant in Taiwan which targets consumers from middle to upper income
group, in contrast to its previously opened restaurant outlets which target consumers from the average income group.
Expanding the abalone tanks.
It's their main products, adding more tanks (at least 1000) in 1H10. Oceanus is expecting to have at least 32,000 tanks, now have 26,000 tanks. Currently, land is not a problem for Oceanus as they have more than enough land to store all the tanks.
We like Oceanus for its
1) sheer abalone
farming capacity, and
2) low abalone production cost.
Key risks to our call are
1) lack of appetite from Chinese consumers for abalone, and
2) continuing and/or worsening losses of its F&B outlets.
Source: DMG
Sunday, August 15, 2010
Stock for Beginners: What is Stock?
What is stock? or wondered why shares of stock exist? This introduction to the world of investing in stocks will provide answers to those questions and show you just how simple Wall Street really is.
It is easier to learn with example.
Imagine you wanted to start a retail store with members of your family. You decide you need $1000 to get the business off the ground so you incorporate a new company. You divide the company into 1000 pieces, or "shares" of stock. You price each new share of stock at $1. If you can sell all of the shares to your family members, you should have the $1000 you need (1,000 shares x $1 per share = $1000 cash.
So, stocks in your family retail store and Wall Street Stocks are no different, take a look:
When you buy share of stock, you are purchasing a tiny piece of a company.
The current stock price of McDong's is S$2.00. The stock market is nothing more than an auction. Individual investors, just like you, are making decisions with their own money in a real-time auction. If someone wants to sell their shares of McDong's and there are no buyers at $2.00, the price would have to continually fall until someone else stepped in and placed a buy order with their broker, let's say S$1.90. If investors thought McDong's was going to grow its profits faster than other companies, they would be willing to bid up the price of the stock at S$2.10 (which is affected by supply and demand because there are only a fixed amount of shares in existence, in this case 1,000,000 shares). Likewise, if a large investor were to dump his or her shares on the market, the supply could temporarily overwhelm and drive the stock price lower.
It's simply supply and demand thing. McDong only have 1,000,000 shares to go around. If there are more demands than supply, the price will go up towards Mount Everest. If there are too much supply, and nobody is buying it, the price will sank down the sea. Get it?
It is easier to learn with example.
Imagine you wanted to start a retail store with members of your family. You decide you need $1000 to get the business off the ground so you incorporate a new company. You divide the company into 1000 pieces, or "shares" of stock. You price each new share of stock at $1. If you can sell all of the shares to your family members, you should have the $1000 you need (1,000 shares x $1 per share = $1000 cash.
So, stocks in your family retail store and Wall Street Stocks are no different, take a look:
When you buy share of stock, you are purchasing a tiny piece of a company.
The current stock price of McDong's is S$2.00. The stock market is nothing more than an auction. Individual investors, just like you, are making decisions with their own money in a real-time auction. If someone wants to sell their shares of McDong's and there are no buyers at $2.00, the price would have to continually fall until someone else stepped in and placed a buy order with their broker, let's say S$1.90. If investors thought McDong's was going to grow its profits faster than other companies, they would be willing to bid up the price of the stock at S$2.10 (which is affected by supply and demand because there are only a fixed amount of shares in existence, in this case 1,000,000 shares). Likewise, if a large investor were to dump his or her shares on the market, the supply could temporarily overwhelm and drive the stock price lower.
It's simply supply and demand thing. McDong only have 1,000,000 shares to go around. If there are more demands than supply, the price will go up towards Mount Everest. If there are too much supply, and nobody is buying it, the price will sank down the sea. Get it?
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