Stock calls for 13 May 2019

Date	Analyst	Company	Last	Target	Call	Valuation
05/13/19	UOB Kay Hian	CapitaCommercial	1.9	2.16	Buy
05/13/19	UOB Kay Hian	DBS	26.55	30.5	Buy
05/13/19	Citibank	DBS	26.55	27	Neutral
05/13/19	DMG & Partners	HRnetGroup	0.77	0.94	Buy	DCF
05/13/19	CIMB	Jadason	0.038	0.059	Add	PB1x CY19
05/13/19	Macquarie	OCBC	11.39	13	Outperform
05/13/19	phillip	OCBC	11.39	12.68	Accumulate	GGM, PB1.3x FY19
05/13/19	UOB Kay Hian	OCBC	11.39	14.62	Buy	PB1.42x FY19
05/13/19	CIMB	OCBC	11.39	12.59	Hold	GGM, PB1.26x
05/13/19	DBS Vickers	Perennial Reit	0.64	0.83	Buy	RNAV (55% discount)
05/13/19	UOB Kay Hian	SATS	5.27	5.6	Buy
05/13/19	UOB Kay Hian	SPH	2.39	2.86	Buy
05/13/19	UOB Kay Hian	ST Engineering	4.02	4.7	Buy
05/13/19	Phillip	Thai Beverage	0.825	0.83	Neutral	Sum of parts
05/13/19	CIMB	Thai Beverage	0.825	0.94	Add
05/13/19	UOB Kay Hian	Thai Beverage	0.825	0.85	Hold	Sum of parts
05/13/19	DMG & Partners	Thai Beverage	0.825	0.92	Buy	Sum of parts
05/13/19	OCBC	Thai Beverage	0.825	0.88	Hold
05/13/19	Lim & Tan	UOL	7.26	0	Buy
05/13/19	CIMB	UOL	7.26	8.45	Add	RNAV (30% discount)
05/13/19	OCBC	UOL	7.26	8.5	Buy
05/13/19	DMG & Partners	Wilmar	3.51	3.8	Buy	Sum of parts
05/13/19	DBS Vickers	Wilmar	3.51	3.86	Buy	DCF, PER15.6x FY19

Best world didn't give a full disclosure on the relationship with its primary China agent.

https://sg.finance.yahoo.com/news/best-world-admits-owner-china-223032614.html

Why did Best World hide this clandestine relationship?

This incident gave Best World a very bad impression as it was forced to admit the relationship by SGX.  This saga also strengthened the Bonitas research's report that Best World was fudging its books.

http://sg-stock.blogspot.com/2019/05/bonitas-research-best-world-is-fraud.html

China is brilliant to be hush-hush about its retaliatory US tariffs.

China didn't respond immediately with its retaliatory US tariffs on Friday.  This is not a piece of good news for the US markets because it keeps the investors edgy since the retaliatory US tariffs will come anytime.  Who will dare to buy stocks when the retaliatory US tariffs will come anytime.

Baltic dry index - 1013

Today, Friday, May 10 2019, the Baltic Dry Index climbed by 39 points, reaching 1013 points.

Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.

================

Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count - 988

The U.S. dropped two oil rigs this week, according to weekly data from Baker Hughes, a GE Company.

The gas rig count remained flat this week, making the nation’s overall total rig count 988. This is 57 fewer rigs than one year ago when the rig count was 1,045.

New Mexico led all states in rig declines, posting a loss of four this week. Wyoming dropped two rigs while Louisiana and North Dakota dropped one rig apiece.

California added three rigs this week, while Oklahoma added two and Pennsylvania and Texas added one rig apiece.

Among the major basins, the Marcellus and the Cana Woodford saw an increase of two rigs and one rig, respectively.

The Permian Basin lost two rigs this week, bringing the number of active rigs in that basin to 457. The Permian currently accounts for more than half of the nation’s total rig count.

The DJ-Niobrara, Utica and Williston all dropped one rig apiece.

==================

Related stock: Keppe Corp, Sembcorp Marine & Cosco.

Frasers Commercial Trust - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/18/19	DBS Vickers	Frasers Commercial Trust	1.47	1.7	Buy
01/21/19	OCBC	Frasers Commercial Trust	1.45	1.56	Buy
01/21/19	CIMB	Frasers Commercial Trust	1.45	1.5	Hold	DDM
01/21/19	Lim & Tan	Frasers Commercial Trust	1.45	0	Hold
03/18/19	DMG & Partners	Frasers Commercial Trust	1.47	1.5	Neutral
04/08/19	DBS Vickers	Frasers Commercial Trust	1.47	1.7	Buy
04/24/19	DMG & Partners	Frasers Commercial Trust	1.49	1.5	Neutral	DDM
04/24/19	OCBC	Frasers Commercial Trust	1.49	1.58	Buy
04/24/19	CIMB	Frasers Commercial Trust	1.49	1.5	Hold	DDM

Frasers Centrepoint Trust - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/17/19	Kim Eng	Frasers Centrepoint Trust	2.27	2.55	Buy	DDM
01/22/19	Lim & Tan	Frasers Centrepoint Trust	2.26	0	Hold
01/22/19	OCBC	Frasers Centrepoint Trust	2.26	2.5	Buy
01/23/19	Phillip	Frasers Centrepoint Trust	2.27	2.21	Neutral	DDM, PB1.09x FY19
01/23/19	DBS Vickers	Frasers Centrepoint Trust	2.27	2.4	Buy
01/28/19	UOB Kay Hian	Frasers Centrepoint Trust	2.29	2.32	Buy
01/28/19	CIMB	Frasers Centrepoint Trust	2.29	2.35	Add	DDM
02/15/19	Phillip	Frasers Centrepoint Trust	2.24	2.21	Neutral
02/28/19	Kim Eng	Frasers Centrepoint Trust	2.3	2.55	Buy
03/01/19	OCBC	Frasers Centrepoint Trust	2.29	2.5	Buy
03/01/19	DBS Vickers	Frasers Centrepoint Trust	2.29	2.4	Buy	DCF
03/14/19	DBS Vickers	Frasers Centrepoint Trust	2.26	2.6	Buy
03/18/19	DMG & Partners	Frasers Centrepoint Trust	2.28	2.19	Neutral
04/03/19	DBS Vickers	Frasers Centrepoint Trust	2.38	2.6	Buy
04/04/19	Kim Eng	Frasers Centrepoint Trust	2.36	2.6	Buy
04/24/19	Lim & Tan	Frasers Centrepoint Trust	2.36	0	Buy
04/25/19	DMG & Partners	Frasers Centrepoint Trust	2.36	2.19	Neutral	DDM
04/25/19	OCBC	Frasers Centrepoint Trust	2.36	2.61	Buy	DDM
04/26/19	Phillip	Frasers Centrepoint Trust	2.37	2.31	Neutral	DDM

Fortune Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/29/19	DBS Vickers	Fortune Reit	9.7	10.68	Buy

Stock calls for 10 May 2019

Date	Analyst	Company	Last	Target	Call	Valuation
05/10/19	DBS Vickers	Frencken	0.615	0.75	Buy	PER8.5x FY19/20
05/10/19	Lim & Tan	Frencken	0.615	0	Buy
05/10/19	CIMB	Frencken	0.615	0.9	Add
05/10/19	UOB Kay Hian	Fu Yu	0.205	0.285	Buy
05/10/19	Lim & Tan	Fu Yu	0.205	0	Buy
05/10/19	Kim Eng	Genting	0.95	1.04	Hold
05/10/19	OCBC	Genting	0.95	1.23	Buy
05/10/19	DMG & Partners	Genting	0.95	1.02	Neutral	DCF
05/10/19	CIMB	Genting	0.95	1.06	Add	EV/Ebitda8x FY20
05/10/19	UOB Kay Hian	Genting	0.95	1.26	Buy
05/10/19	DBS Vickers	Genting	0.95	1.2	Buy
05/10/19	DBS Vickers	Hongkong Land	6.97	8.02	Buy
05/10/19	DMG & Partners	OCBC	11.31	12.2	Neutral
05/10/19	CIMB	OCBC	11.31	12	Hold
05/10/19	CIMB	OUE Commercial	0.5	0.57	Hold
05/10/19	DBS Vickers	Roxy-Pacific	0.405	0.39	Hold	RNAV (55% discount)
05/10/19	UOB Kay Hian	Singapore Medical	0.445	0.62	Buy
05/10/19	DMG & Partners	Singapore Medical	0.445	0.48	Neutral	DCF

US tariffs against China have taken effect!

https://sg.finance.yahoo.com/news/us-tariff-increase-200b-chinese-040333406.html

Let's see how China will retaliate after the US$200b tariffs.

Many analysts and economists had said that China had nothing more to tax but they're dead wrong. Why?

China can make up the shortfalls by increasing the tariffs on already taxed US goods and this is unlimited.  Tariffs can go up to 1,000% or higher until the US goods cannot be sold in China anymore.

It will be interesting to see what will happen when the US & China don't trade with each other.

India is fudging its own economic data.

https://www.channelnewsasia.com/news/business/india-s-incredulous-data--economists-create-own-benchmarks-11517966

India is fudging its own economic data.

Hahaha! Why am I not surprised?

Food Empire - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/04/19	DMG & Partners	Food Empire	0.58	0.69	Buy
04/05/19	DMG & Partners	Food Empire	0.56	0.69	Buy

First Sponsor - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/22/19	DBS Vickers	First Sponsor	1.27	1.62	Buy	RNAV (35% discount)

First Resources - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/03/19	UOB Kay Hian	First Resources	1.56	1.6	Hold
02/20/19	UOB Kay Hian	First Resources	1.72	1.85	Hold	PER13x FY19, Buy @ $1.65
02/21/19	Kim Eng	First Resources	1.69	2.1	Buy
03/01/19	Kim Eng	First Resources	1.71	2.03	Buy	PER17x
03/04/19	DMG & Partners	First Resources	1.72	1.6	Neutral	PER13x FY19
03/04/19	DBS Vickers	First Resources	1.72	1.97	Buy	DCF
03/05/19	CIMB	First Resources	1.7	2.12	Add
03/12/19	UOB Kay Hian	First Resources	1.69	1.85	Hold	Buy @ $1.65
04/09/19	CIMB	First Resources	1.79	2.12	Add
04/22/19	UOB Kay Hian	First Resources	1.85	1.85	Hold
05/06/19	Kim Eng	First Resources	1.82	2.03	Buy	PER17x FY19
05/09/19	UOB Kay Hian	First Resources	1.79	1.85	Hold	PER13x FY19, Buy @ $1.65

Stock calls for 9 May 2019

Date	Analyst	Company	Last	Target	Call	Valuation
05/09/19	Kim Eng	AEM	1.05	1.4	Buy
05/09/19	UOB Kay Hian	CSE Global	0.485	0.62	Buy
05/09/19	UOB Kay Hian	First Resources	1.79	1.85	Hold	PER13x FY19, Buy @ $1.65
05/09/19	DMG & Partners	Frencken	0.615	0.82	Buy	DCF
05/09/19	DMG & Partners	Kimly	0.245	0.23	Neutral	DCF
05/09/19	UOB Kay Hian	Koufu	0.75	0.95	Buy
05/09/19	DBS Vickers	Netlink	0.82	0.87	Buy
05/09/19	OCBC	Roxy-Pacific	0.405	0.41	Hold
05/09/19	UOB Kay Hian	Singapore Post	0.99	1.06	Hold	Buy @ $0.95
05/09/19	DBS Vickers	Singtel	3.11	3.55	Buy
05/09/19	UOB Kay Hian	Sunningdale	1.32	1.22	Hold	PER11x FY20, Buy @ $1.10
05/09/19	CIMB	Sunningdale	1.32	1.38	Hold	PB0.69x FY19

Bonitas Research: Best World is a fraud! - Part 2

REBUTTAL TO BEST WORLD’S CLARIFICATION ANNOUNCEMENT

On April 24, 2018 we published our investment opinion (the “Report”) on Best World International Ltd. (BB: BEST __ SGX: CGN) (“Best World” or the “Company”). On May 8, 2019, two weeks later, Best World issued a clarification announcement (the “Response”). Best World’s response is reminiscent of many companies we have identified in the past. They have chosen to hide behind their auditors for its reported financial performance and their lawyers for convoluted and misleading legal descriptions of its Chinese operations. Despite its length, Best World's Response fails to address the key issues raised in our Report.  We think its Response is littered with lies in an attempt to discredit our findings, which has only strengthened our belief that the Dora’s will not voluntarily disclose the truth. In our Rebuttal, we present additional evidence which corroborates our findings that Best World fabricated its 2017 reported sales to Changsha Best. Considering the abundance of factual, independently verifiable evidence including testimonials from Member Reps about Best World’s Direct-Selling China sales model, the Company blatantly lied in its response that it does not conduct direct selling in China.  The Company even surmises that the sudden influx of reviews on DR’s Secret online sales channels immediately after the Singapore Business Times article was because of “simply raised awareness” of its product and its brand to consumers.  Best World expects investors to believe that consumers became more aware of its DR’s Secret skin care products because the Singapore Business Times article was critical of its China operations. How does that make any sense? The Company continues to claim that its growth in China sales were “driven by underlying demand of the skin care products.” Another lie. How can any investor trust Best World after being told so many blatant lies? We stand by our opinion and the evidence presented in our Report that Best World is a fraud, that it fabricated its reported 2017 sales to Changsha Best, and that it currently operates a direct selling sales model in China. We have not been contacted by anyone yet, but in the event that we are mentioned in a defamation claim, we are ready with an exhaustive list of of internal discovery document requests for Best World which we expect will only corroborate publicly available findings. We encourage investors and regulators to replicate and confirm our findings to expedite the truth-gathering process. We remain short Best World’s stock. https://sg-stock.blogspot.com/2019/04/bonitas-research-best-world-is-fraud.html The latest news is Best World is suing Bonitas Research now.

China's CPI has risen to 6-month high.

https://sg.finance.yahoo.com/news/chinas-factory-gate-inflation-hits-four-month-high-025321639--business.html

China CPI is at 2.5% in April, a 6-month high.

This is not unexpected as we've expected CPI to rise in China in our previous post.

https://sg-stock.blogspot.com/2019/03/global-inflation-or-deflation.html

US-China trade tariffs will also contribute to higher CPI in the 2nd half of 2019 in the US & China.

We need to understand the chain of events in a real economy, starting with the CPI below.

CPI/PPI ----->> M1-M2 spread/3m-10y yield spread ----->> PMI ----->> GDP

https://sg-stock.blogspot.com/2019/04/the-us-economy-has-flipped-and-fissures.html

First Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/16/19	phillip	First Reit	1.04	0.88	Neutral	DDM
01/17/19	Lim & Tan	First Reit	1.03	0	Neutral
01/18/19	OCBC	First Reit	1.01	0.97	Hold
01/18/19	CIMB	First Reit	1.01	1.2	Add	DDM
02/11/19	OCBC	First Reit	1.14	0.97	Sell
04/11/19	CIMB	First Reit	0.99	1.2	Add	DDM

Far East Hospitality - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/16/19	OCBC	Far East Hospitality	0.625	0.675	Buy
02/07/19	OCBC	Far East Hospitality	0.66	0.675	Buy
02/13/19	Lim & Tan	Far East Hospitality	0.64	0	Buy
02/14/19	DBS Vickers	Far East Hospitality	0.635	0.7	Buy	DCF
02/14/19	CIMB	Far East Hospitality	0.635	0.68	Add	DDM
02/14/19	Kim Eng	Far East Hospitality	0.635	0.75	Buy	DDM
02/14/19	OCBC	Far East Hospitality	0.635	0.68	Buy
04/15/19	OCBC	Far East Hospitality	0.685	0.68	Hold
04/26/19	OCBC	Far East Hospitality	0.66	0.67	Hold
04/26/19	DBS Vickers	Far East Hospitality	0.66	0.7	Buy
04/29/19	CIMB	Far East Hospitality	0.665	0.71	Add
04/29/19	Kim Eng	Far East Hospitality	0.665	0.8	Buy

Ezion - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/07/19	DBS Vickers	Ezion	0.05	0.06	Hold	PB0.3x FY19
03/11/19	DBS Vickers	Ezion	0.043	0.05	Hold	PER10x F20
04/05/19	DBS Vickers	Ezion	0.043	0.05	Hold	PB1.4x

Stock calls for 8 May 2019

Date	Analyst	Company	Last	Target	Call	Valuation
05/08/19	DMG & Partners	Breadtalk	0.825	0.81	Neutral	Sum of parts
05/08/19	CIMB	Comfortdelgro	2.61	2.88	Add	DCF
05/08/19	CIMB	Keppel Corp	6.72	8.41	Add	Sum of parts
05/08/19	UOB Kay Hian	Overseas Edu	0.3	0.46	Buy	EV/Ebitda10.4x
05/08/19	Lim & Tan	Overseas Edu	0.3	0	Buy
05/08/19	OCBC	Singapore Post	1.01	1	Hold
05/08/19	CIMB	Singapore Post	1.01	1.17	Add	DCF
05/08/19	DBS Vickers	Singapore Post	1.01	0.96	Hold	DCF

ESR-Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/18/19	Lim & Tan	ESR-Reit	0.53	0	Hold
01/21/19	CIMB	ESR-Reit	0.53	0.62	Add	DDM
01/21/19	OCBC	ESR-Reit	0.53	0.575	Buy
01/22/19	DBS Vickers	ESR-Reit	0.53	0.59	Buy
02/12/19	DMG & Partners	ESR-Reit	0.515	0.61	Buy	DDM
03/07/19	CIMB	ESR-Reit	0.53	0.62	Add
03/13/19	DMG & Partners	ESR-Reit	0.53	0.61	Buy
04/10/19	OCBC	ESR-Reit	0.54	0.55	Hold
04/25/19	CIMB	ESR-Reit	0.51	0.6	Add	DDM
04/25/19	OCBC	ESR-Reit	0.51	0.565	Buy

EC World Reit - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/09/19	DMG & Partners	EC World Reit	0.7	0.81	Buy
02/15/19	phillip	EC World Reit	0.745	0.82	Buy
02/22/19	DBS Vickers	EC World Reit	0.745	0.86	Buy	DCF
02/25/19	DMG & Partners	EC World Reit	0.755	0.84	Buy	DDM
03/04/19	phillip	EC World Reit	0.76	0.85	Buy	DDM, PB0.84x FY19
03/18/19	DMG & Partners	EC World Reit	0.77	0.84	Buy
05/07/19	DMG & Partners	EC World Reit	0.77	0.84	Buy

Duty Free - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/10/19	Lim & Tan	Duty Free	0.192	0	Accumulate

Stock calls for 7 May 2019

Date	Analyst	Company	Last	Target	Call	Valuation
05/07/19	DMG & Partners	APAC Realty	0.555	0.72	Buy
05/07/19	DBS Vickers	Breadtalk	0.835	0.92	Hold
05/07/19	DMG & Partners	CSE Global	0.475	0.61	Buy	DCF, PER13.7x FY19
05/07/19	Lim & Tan	CSE Global	0.475	0	Buy
05/07/19	OCBC	DBS	26.53	27.5	Hold
05/07/19	DMG & Partners	Delfi	1.3	1.68	Buy	DCF, PER28x FY19
05/07/19	DMG & Partners	EC World Reit	0.77	0.84	Buy
05/07/19	CIMB	Frasers Property	1.85	2.08	Add
05/07/19	DMG & Partners	Fu Yu	0.21	0.24	Buy	DCF
05/07/19	DMG & Partners	HRnetGroup	0.77	1.06	Buy	DCF
05/07/19	DBS Vickers	Koufu	0.77	0.8	Hold	PER17x FY19
05/07/19	UOB Kay Hian	Netlink	0.825	0.92	Buy	DCF
05/07/19	DMG & Partners	Silverlake	0.61	0.65	Buy	DCF
05/07/19	DMG & Partners	Starhill	0.74	0.78	Buy	DDM
05/07/19	Lim & Tan	Sunningdale	1.35	0	Hold
05/07/19	DMG & Partners	UG Healthcare	0.18	0.32	Buy	PER10x FY20
05/07/19	OCBC	UOB	25.85	27.3	Hold

Do not subscribe to Luckin coffee ipo! Why?

https://www.businesstimes.com.sg/consumer/gic-backed-luckin-coffee-seeks-to-raise-up-to-us510m-in-us-ipo

I've heard too many news about this coffee startup.

Do you know where does this startup source its coffee beans?
It sources its coffee beans from Taiwan which is not a coffee producing country and the coffee beans are not of good quality.  A real coffee company will source its coffee beans from coffee producing countries and not from Taiwan.  Why is this company sourcing coffee beans from Taiwan? I leave it to your imagination.

This coffee startup is burning cash like hell, just like the bike sharing business.  It has to offer discounts and deals just to sell its coffee.  Without these discounts and deals, it cannot sell at all.

The short-sellers will target and publish SELL reports on this coffee startup in the future because it has weak fundamentals and a flawed business concept.

Hopefully, GIC is able to get out of this company soon before it suffers from a great burnout.

How the China RRR cut will impact its economy?

https://finance.yahoo.com/news/china-steers-credit-small-firms-034303771.html

The China RRR cut will release RMB$280b into the economy.

Let me offer a simple explanation of RRR.

The RRR is imposed on banks by the central bank to prevent liquidity and bankruptcy issues such as bank run.

When a bank takes a deposit of $100, it is a debt owed to the bank customer and the bank will pay the bank customer a deposit interest.  The bank will use the debt (deposit) for bank lending to earn a higher loan interest so that the bank can cover the deposit interest and earn a profit.  However, the central bank will not allow the bank to make a full loan of the deposit ($100) because it will create a liquidity risk.  Therefore, the central bank imposes a required reserve ratio (RRR) on the bank and limits the bank lending on its deposit.

For example:

If the RRR is 20%, the bank can only make a loan of $80 out of every $100 deposit.

If the bank pays a $2 interest on every $100 deposit, its cost of debt (deposit) is 2%.

When the RRR is 20% and the bank still pays a $2 interest, its cost of debt is 2.5% (2/80).  Therefore, the cost of debt for the bank increases with higher RRR.

When the RRR is lowered, the cost of debt is lowered too and the bank can earn a profit more easily with lower loan interest.

In conclusion, a lower RRR is meant to boost monetary supply and local consumption in the economy.  In other words, this is a QE policy.

France has done the right thing for its pedestrians.

https://sg.finance.yahoo.com/news/france-ban-e-scooters-pavements-september-090821006.html

Well done! France is doing the right thing.

E-scooters put pedestrians in danger on the pavements.

They ride recklessly at high speeds and don't give way to pedestrians on the pavements.  They are a nuisance as they expect pedestrians to give way to them by honking.

DISA - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/19/19	Amfrasers	DISA	0.003	0	Cease Coverage

Delfi - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/02/19	DMG & Partners	Delfi	1.32	1.59	Buy
03/01/19	DMG & Partners	Delfi	1.45	1.68	Buy	DCF, PER28x FY19
04/05/19	DMG & Partners	Delfi	1.3	1.68	Buy