Tuesday, 17 October 2017

Good Time to BUY M1 Ltd

  • Met 73% of our 9M17 estimate
  • NB-IoT network takes time to ramp up
  • Maintain HOLD

9M17 Revenue Growth Driven Mainly by Fixed Services

Good Time to BUY M1 Ltd www.mmfsolutions.sg

 

M1 Ltd’s (M1) 3Q17 revenue grew 1.0% YoY to S$251.6m driven mainly by fixed services (+19.9%) and mobile post-paid (+3.4%) revenues but partly offset by weaker handset sales (-13.6%) and international call services (- 7.0%). Fixed services revenue growth was driven by a 20.0% YoY increase in customer base despite recording 6.1% decline in ARPU, while mobile revenue growth was mainly driven by higher post-paid customer base and flat YoY ARPU.

3Q17 operating expenses rose at a slower pace of 0.6% YoY to S$209.1m due to a 21.8% decline in advertising and promotion expenses, offset by higher depreciation. Consequently, EBITDA increased 1.3% YoY to S$75.5m. However, NPAT fell 4.8% YoY to S$32.7m as taxation increased 13.1% to S$7.2m. For 9M17, revenue rose 2.3% YoY to S$763.9m driven mainly by fixed services and handset sales.

However, operating expenses grew 4.8% to S$633.3m due to higher handset costs and higher wholesale costs of fixed services. Consequently, 9M17 NPAT declined 13.9% YoY to S$68.6m and EBITDA fell 5.0% to S$228.0m, which formed 72% and 73% of our FY17 forecasts, respectively.

No Change in FY17 Outlook Guidance

For FY17, M1 keeps its guidance unchanged:

  1. capex to be around S$150m,
  2. expects NPAT to decline YoY for FY17, and 3) intends to maintain 80% dividend payout ratio for FY17.
Looking ahead, we believe competition within the mobile segment will continue to put pressure on ARPU with the impending entry of TPG as well as the announced intention of MyRepublic to launch mobile services as a Mobile Virtual Network Operator (MVNO). While M1 has recently launched nationwide NB-IoT network, it expects mass adoption to take time as a new technology and with the eco-system still evolving.

Separately, we do not expect M1’s ICT business to contribute materially in the near-term as it needs time to ramp up as well.


Look once- Keep Eye on These Singapore Stocks

Supported by 6.8% Forward Dividend Yield

With a set of in-line 9M17 results, we keep our forecasts unchanged and note the lack of any near-term catalysts driving earnings. Hence, we maintain our HOLD rating and the same FV of S$1.65.

Get Perfect Plan for Blue Chip stocks , Intraday Trading Signals & Positional stocks Signals for SGX market

Monday, 16 October 2017

Singapore Market review of the day

SINGAPORE - After two weeks of solid gains in the stock market that sent the benchmark Straits Times Index (STI) up by nearly 100 points or 3.1 per cent to breach through the 3,300 level, what are the odds of a third week of gain?

Pretty good, analysts reckon, citing Singapore's strong economic footing and the relative underperformance of its Singapore Stock market against regional peers.

The Trade and Industry Ministry's advance estimates last Friday showed that the economy expanded 4.6 per cent - its fastest pace in more than three years - in the third quarter, buoyed by the surging manufacturing sector.

This beat economist forecasts of 3.8 per cent growth, and was also the fastest quarterly expansion since 2014.

The better-than-expected performance was lifted by a stellar showing in manufacturing, which surged 15.5 per cent year on year.

The sector makes up a fifth of the economy.

Services - which makes up two-thirds of the gross domestic product (GDP) and employs the bulk of workers - grew 2.6 per cent.

Bolstering the good share Investment news on the same day was a decision by the central bank to keep its exchange rate policy stance unchanged.

This means keeping the Singapore dollar band on a path of zero appreciation against the currencies of key trading partners.

This will be welcomed by local exporters who see a dearer Singapore dollar as being unhelpful in pricing their products competitively in the global market.

The Monetary Authority of Singapore uses the exchange rate as its main monetary policy tool to strike a balance between inflation from overseas and economic growth.

"Upbeat GDP readings and MAS policy decision sent the STI to its highest level in more than two months... STI has finished its two-month consolidation and is gaining upward momentum ahead of third-quarter earnings season," said CMC Markets Singapore analyst Margaret Yang.

She noted that the local index had underperformed regional peers over the last two months, with its performance lagging behind major indices S&P and Hang Seng.

The STI ended last week up 0.8 per cent at 3,319.11, a key level that Ms Yang has noted.

"3,300 point is a psychological and technical resistance level for the STI. Breaking out above this critical point will pave way for more upside towards the previous highs of 3,354 points."

With the results season kicking in, good corporate earnings will help to boost confidence and attract more liquidity into Singapore, she added.

DBS Group Research noted that corporate earnings growth in Singapore is recovering after two years of negative growth in 2015 and 2016.

It believes earnings growth should continue to be healthy, driven by a decent economic recovery with upside risk.

"We believe STI could attempt to hit 3,500 by end-2018, representing around 10 per cent total return inclusive of dividends."

The Keppel group of companies will report their third quarter results this week, starting with Keppel DC Reit and Keppel Infrastructure Trust on Monday and ending with Keppel Corporation on Thursday.

This week and next appear to be a popular reporting period among the Reits, with no fewer than 19 indicating that they will release their results.

Singapore Property stocks, which have enjoyed a surge of price and volume, are likely to remain in play.

The release on Oct 16 of new private home sales for September may give further fillip to the share price of developers if the sales figures are as strong as the spate of collective sales that have hit the market.

Last Friday, City Developments closed at $12.66, its highest level in nearly five years while UOL ended at a record $8.89.

Both companies snared a residential site each in the sought after East Coast area through collective sales recently.

Singapore Stocks To Watch

  • AEM
  • ALLIANCE MINERAL
  • COMPACT METAL
  • ROWSLEY
  • THAIBEV
So Earn more With our Stock Recommendations

Recent Stock Recommendations

SGX:Buy ALLIANCE MINERAL || Level 0.360|| Cut Profit @ 0.395 || Return 9.72%
KLSE:Buy DNONCE || Level 0.405 || Cut Profit @ 0.440 || Return 8.64% 


Saturday, 14 October 2017

How to Pick best dividend stocks Singapore

As investors, we all love dividends. Other than the thrill of seeing a stock you own rise higher and higher in the Malaysia / Singapore stock market, receiving passive dividend income from your investments every year is something we all look forward to.



How to Pick best dividend stocks Singapore www.mmfsolutions.sg
So if you’re more of an income investor and looking to invest for dividends, your stock portfolio will be markedly different from someone who’s investing for high growth and capital gain. The stocks that will give good, consistent dividends may not necessarily be the kind that will grow by 20-50% a year and vice versa.

So if you investing for dividends, you have to invest accordingly and only pick the best stocks that will give the passive dividend income you want. The question is: How?

So if you’re slightly lost and looking for some direction, here are 7 quick steps to help you pick the best dividend stocks around: 


1 .Look for Mid-Large Cap Stocks


The best dividend stocks are usually large, mature companies with stable revenue, profits and cash flow. These companies have little growth left in them. Because these companies are no longer expanding aggressively, the majority of their earnings can be returned to shareholders as dividends.

On the other hand, a smaller, high-growth company needs more cash and resources to grow and expand its business, leaving less money to pay shareholders dividends (if any).

2 .Dividend Payout Ratio is 50% or More


If a company is large, stable and isn’t seeking to grow aggressively any more, then the majority of the profits it makes should be returned to shareholders. So look for a company with a dividend payout ratio of at least 50% or more. For example, Nestlé (Malaysia) returns over 90% of its earnings to shareholders as dividends.

If a company has a low payout ratio, ask yourself why the company is holding on to the cash. Unless they have a good reason to do so or have a way to generate exceptional returns for shareholders, the majority of profits should be paid out as dividends.


3 .Track Record of Paying Consistent Dividends


The company should have a long and stable track record of paying consistent/growing dividends to shareholders. No point if a company is large and successful and has profits to distribute as dividends, but chooses to pay them out inconsistently.

Check to see a company pay a consistently growing dividend over the last 5-10 years. This shows that as the company grows more and more successful, the management is also willing to share the fruits of its labour with its shareholders.

4 .Company’s Fundamentals Must Be Sustainable


Many dividend investors tend to ignore the overall aspects of a company’s fundamentals. They choose to focus primarily on the amount of dividends they can receive. This is wrong. While dividend yield is obviously important for someone seeking dividends, it is also important to consider the overall health of the company.

A company with deteriorating fundamentals (e.g. falling revenue, profits, cash flow, fading economic moat, etc.) cannot sustain its dividend payout in the long term. The less revenue and profit it makes, the less dividends it can pay.

Over time, a company with falling revenues and profits will see its stock price fall when investors realize that the company is no longer performing. This fall in value will eat into any dividend gains you might have had at the start – leaving you back at square one.

So always make sure the dividend company you want to invest in will remain fundamentally strong and robust for many years to come.

5 .Company has Low CAPEX


As a dividend investor, you prefer to invest in a company with low capital expenditure (CAPEX). A company with high CAPEX means that it has to continually reinvest its profits in maintaining its business operations, leaving less to distribute as dividends.

For example, airlines have very high CAPEX as they need to continually maintain their aircraft and upgrade them to newer models after a certain amount of years.

So look for a company that’s able to maintain/grow its business with minimal CAPEX.

If you want help, you can always kick start the idea by downloading our watchlist of dividend paying stocks below:

6 .Company has Stable Free Cash Flow


Ultimately, a company must have real cash (not just profits) to be able to pay dividends to its shareholders. Even if a company is profitable but has negative or inconsistent free cash flow, it will have trouble paying stable dividends.

A smaller company that is seeking to grow might have negative free cash flow as it expands its business. But a large, stable company that dominates its industry should be producing high amounts of free cash flow year after year.

7 .Yield Must Beat Risk-Free Rate


The dividend yield you receive should beat the risk-free rate of the country you reside in. The risk-free rate is the lowest return you can theoretically get “risk-free”over a period of time.

In the US, if you plan to invest your money for ten years, then the risk-free rate is usually based on the return of the 10-year US Treasury note which is currently around 2.30%. In Singapore, the risk-free rate is usually based on the interest your CPF special account gives you, which is 4%.

If your dividend yield can’t beat your risk-free rate, you might as well put your money with your CPF since you face less risk growing your money there compared to investing in stocks.




Get Perfect Plan for Blue Chip stocks , Intraday Trading Signals & Positional stocks Signals for SGX market

Source - fifthperson

Friday, 13 October 2017

China Evergrande Group Statement for SGX Market

According to the South China Morning Post, home buying was notably subdued in China’s top-tier cities during the eight-day “Golden Week” public holiday, which is a traditionally popular season for home sales.
 
China Evergrande Group Statement for SGX Market www.mmfsolutions.sg
 

Data from real estate brokers 5I5J Group and Centaline Property Agency indicate that new home sales fell as much as 78% and 64% in Shanghai and Beijing, respectively, during the holidays compared with a year ago.
 
Catch More - Good Time to Buy Keppel Corp

Given the 19th Communist Party Congress starting October 18, it is highly likely that potential buyers are adopting a wait-andsee approach. Further, the slew of cooling measures introduced by the local authorities, ranging from heightened mortgage down payments to resale restrictions, appears to be taking effect.

While Evergrande’s latest operating statistics for Sep’17 indicate that contracted sales remains healthy till date, a prolonged period of market softness will be a cause for concern.