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Wednesday, August 21, 2019

Japan Foods - Stock calls

Date Analyst Code Company Last Target Call Percent Valuation
02/12/19 Amfrasers 5OI Japan Foods 0.415 0.57 Hold 37.35 DCF
03/08/19 DMG & Partners 5OI Japan Foods 0.43 0.45 Neutral 4.65
04/05/19 DMG & Partners 5OI Japan Foods 0.435 0.45 Neutral 3.45
05/22/19 Amfrasers 5OI Japan Foods 0.44 0.55 Neutral 25.00 DCF
05/23/19 DMG & Partners 5OI Japan Foods 0.44 0.4 Hold -9.09
06/06/19 DMG & Partners 5OI Japan Foods 0.43 0.4 Neutral -6.98

Stock calls for 21 August 2019

Date Analyst Company Last Target Call Valuation
08/21/19 Citibank ESR-Reit 0.51 0.57 Buy
08/21/19 UOB Kay Hian First Resources 1.5 1.6 Hold
08/21/19 CIMB Frasers Logistics 1.2 1.27 Add
08/21/19 Kim Eng HMI 0.720 0.73 Hold offer at $0.73
08/21/19 CIMB OCBC 10.69 12.53 Hold

A new world, an unchartered territory – A negative yield environment - Part 2

https://finance.yahoo.com/news/danish-bank-start-charging-wealthy-112125179.html

The banks are starting to cave into the negative yield environment because their profit margins are shrinking.  The banks have problems making good earnings in a negative yield world because our current financial and economic structures are not built for this.

https://sg-stock.blogspot.com/2019/08/a-new-world-unchartered-territory.html

Tuesday, August 20, 2019

Jadason - Stock calls

Date Analyst Company Last Target Call Valuation
01/02/19 CIMB Jadason 0.02 0.066 Add
05/13/19 CIMB Jadason 0.038 0.059 Add PB1x CY19

ISOTeam - Stock calls

Date Analyst Company Last Target Call Valuation
02/18/19 DMG & Partners ISOTeam 0.22 0.23 Neutral DCF
05/15/19 DMG & Partners ISOTeam 0.22 0.29 Buy DCF
06/06/19 DMG & Partners ISOTeam 0.23 0.29 Buy
07/11/19 UOB Kay Hian ISOTeam 0.245 0.3 Buy PER12.4x FY20
07/25/19 DMG & Partners ISOTeam 0.245 0.31 Buy DCF
07/25/19 UOB Kay Hian ISOTeam 0.245 0.34 Buy PER12.4x FY20

ISDN - Stock calls

Date Analyst Company Last Target Call Valuation
05/23/19 CIMB ISDN 0.215 0.32 Add PER10x CY20
07/01/19 CIMB ISDN 0.235 0.32 Add
08/19/19 CIMB ISDN 0.192 0.27 Add

Stock calls for 20 August 2019

Date Analyst Company Last Target Call Valuation
08/20/19 CIMB Capitaland 3.46 4.15 Add RNAV (35% discount)
08/20/19 DMG & Partners GSS Energy 0.074 0.08 Neutral DCF
08/20/19 Lim & Tan HMI 0.720 0.73 Accept offer offer at $0.73
08/20/19 DMG & Partners Hyphens Pharma 0.2 0.25 Buy DCF
08/20/19 Kim Eng MM2 Asia 0.186 0.2 Hold PEG
08/20/19 DMG & Partners Moya Asia 0.068 0.083 Buy DCF
08/20/19 DMG & Partners OCBC 10.71 11.5 Neutral GGM, PB1.07x FY20
08/20/19 CIMB UOB 25.15 29.54 Add

Thank god! Singapore doesn't need to sell heavily subsidized treated water to JB soon.

https://sg.news.yahoo.com/malaysian-minister-says-johor-to-not-be-dependent-on-singapore-for-treated-water-by-2022-010113972.html

Yeah! SG doesn't need to sell heavily subsidized treated water to JB soon....in 2022!

Malaysia has been taking advantage of SG by buying back treated water cheaply for too long.

Just look at Malaysia's announcement without stating the local water treatment cost per 1000 gallons.  The Malaysian's government is trying to mislead the general public that SG is overcharging MY without stating the true water treatment cost.  The water treatment cost is way higher than $0.50 ringgit per 1000 gallons and it is estimated to be $2.40 ringgit per 1000 gallons (Singapore's treatment cost).

Malaysians should ask their government to come clean with the true water treatment cost but Mahathir won't reveal it.

Water is a strategic supply and should not be held hostage by a foreign country.  Even if the local water treatment cost is higher, the country should produce it locally.  SG is doing that and MY should follow too.  However, by accusing a foreign country of selling the overpriced treated water when instead it is buying the treated water at a heavily subsidized price is a thuggish behaviour.

Nonetheless, SG is happy that this unfair water trade will terminate soon. Cheers!

Cathy Pacific suspends ticket sales at HK airport.

https://news.cgtn.com/news/2019-08-19/Cathay-Pacific-suspends-tickets-sales-at-counters-at-HK-airport-JhI69AzAkg/index.html

It looks like China is coming down hard on Cathy Pacific.

Cathy Pacific Ceo has rushed to China to try to pacify CAAC so that it can resume its normal flight activities.

It was indeed a flight risk when Cathy Pacific supported its employees to join the HK protests because China couldn't guarantee that Cathy Pacific employees won't do foolish things when the airliner was flying in and out of China airspace since they were emotionally disturbed.

Monday, August 19, 2019

Innotek - Stock calls

Date Analyst Company Last Target Call Valuation
08/14/19 Lim & Tan Innotek 0.5 0 Buy on weakness

Indofood Agri - Stock calls

Date Analyst Company Last Target Call Valuation
03/01/19 DBS Vickers Indofood Agri 0.2 0.19 Hold DCF
04/12/19 DBS Vickers Indofood Agri 0.28 0.19 Accept offer offer price $0.28
05/02/19 DBS Vickers Indofood Agri 0.28 0.19 Accept offer offer price $0.28
07/16/19 DBS Vickers Indofood Agri 0.325 0.33 Hold
08/05/19 DBS Vickers Indofood Agri 0.32 0.29 Hold DCF

IHH Healthcare - Stock calls

Date Analyst Company Last Target Call Valuation
01/17/19 Kim Eng IHH Healthcare 1.86 2.13 Buy Sum of parts, Ringgit $6.45 target price
03/01/19 Kim Eng IHH Healthcare 1.85 2.29 Buy Sum of parts, Ringgit $6.90 target
05/31/19 UOB Kay Hian IHH Healthcare 1.79 2.07 Buy Ringgit $6.30 target price, PER32.8x FY2020
06/12/19 CIMB IHH Healthcare 1.84 2.09 Add Ringgit $6.37 target price
07/31/19 Kim Eng IHH Healthcare 1.88 2.16 Buy Sum of parts, Ringgit $6.50 target price

Stock calls for 19 August 2019

Date Analyst Company Last Target Call Valuation
08/19/19 Phillip APTV 0.17 0.165 Neutral EV/Ebitda9.5x
08/19/19 Phillip Capitaland 3.4 4.2 Buy PB0.75x FY19
08/19/19 Lim & Tan City Developments 9.16 0 Buy
08/19/19 phillip CNMC 0.3 0.33 Accumulate DCF
08/19/19 OCBC Golden Agri 0.29 0.27 Sell
08/19/19 CIMB Grand Venture 0.22 0.22 Hold
08/19/19 CIMB ISDN 0.192 0.27 Add
08/19/19 Kim Eng Manulife US Reit 0.89 1 Buy DDM
08/19/19 UOB Kay Hian Overseas Edu 0.285 0.46 Buy
08/19/19 phillip Propnex 0.5 0.59 Buy
08/19/19 Amfrasers Thai Beverage 0.885 0.8 Neutral

Omg! China has displaced Hong Kong with ShenZhen in the greater bay development.

https://www.businesstimes.com.sg/technology/china-to-boost-shenzhen%E2%80%99s-role-in-greater-bay-area-innovation

The HK protestors have just killed their own future and they must be celebrating their "success" now.

China has decided to displace HK with Shenzhen in the greater bay developments with many favourable economic and preferential policies.  HK will lose its importance over time and its economic developments will slow down over time too.

These Hongkongers will need to travel to Shenzhen to find work in the future because HK cannot generate enough job opportunities for these 1.7m protestors in the future with weak economic growth.  HK has fallen from its financial hub pedestal and will never rise back to its glorious heyday again.

RIP, HK!

Is HSBC on China's unreliable entity list?

https://www.businesstimes.com.sg/banking-finance/hsbc-gets-the-cold-shoulder-in-china

It looks like HSBC is veering towards China's unreliable entity list because it has been excluded from the new loan participation.

HSBC has to do a lot of crisis management and damage control now because China is its major market.  By setting up Huawei and letting HSBC account to be used to fund the HK protests, HSBC has proven itself to be anti-China and all these behaviours have to be corrected before China will trust HSBC again.

Trump: No trade deal before HK problems are solved.

https://sg.finance.yahoo.com/news/usd-flat-trump-wants-hong-004100531.html

Look like there is no need for the US and China to meet in September anymore.  It is impossible to solve the HK problems without China's interventions.  The HK chief executive is incapable to solve the HK problems on her own or with her current team.

Look like Trump is compelling Xi to intervene in HK issues or else there won't be any US-China trade deal.  Trump doesn't want China to honour the 1 country 2 systems structure but China wants to honour it by remaining on the sideline.  Therefore, Xi won't intervene unless there is a violent riot or terrorism action in HK.  This is not what Trump wants and Trump won't deal with China as stated.


A billion dollar question: Will the US enter a recession?

https://sg.finance.yahoo.com/news/economists-survey-34-expect-us-040446403.html

2% of economists expect a US recession in 2019.
38% of economists expect a US recession in 2020.
34% of economists expect a US recession in 2021.

Mohammad El Erian doesn't expect a US recession.
Janet Yellen doesn't expect a US recession.

https://www.cnbc.com/2019/08/15/mohamed-el-erian-inverted-yield-curve-recession-signal-distorted.html

https://www.cnbc.com/2019/08/14/janet-yellen-say-yield-curve-inversion-may-be-false-recession-signal-this-time.html

What's our stance?

https://sg-stock.blogspot.com/2019/08/does-us-2-10y-inverted-yield-curve.html

We also expect a US recession and is most probably happening after Q1 2020.

Let's see who will be right.

Is the seawall able to protect Singapore from getting submerged?

https://www.straitstimes.com/singapore/national-day-rally-2019-100-billion-needed-to-protect-singapore-against-rising-sea-levels

SG is setting aside $100B for some major anti-submersion construction.

Is the seawall capable to protect a region from getting submerged?

Building a seawall is a double-edged sword.  If it can prevent the seawater from flowing inland in the worst-case weather scenario (severe storm), it is effective.  However, if the seawater cannot block out the seawater in the most severe storm, it will trap the seawater inland and the seawater cannot recede fast.

A seawall is not an unequivocal and panacea solution.  We should take a leaf out of Indonesia's book.  The Indonesian president has just announced he is shifting the Jakarta Capital to Kalimantan in the future despite having some major anti-submersion construction including the seawall.

https://www.channelnewsasia.com/news/asia/indonesia-jakarta-flooding-great-sea-wall-11662564

Why is the Jakarta capital moving despite the construction?  This shows that the seawall is not really effective as it proclaimed to be because it is a double-edged solution.

Bangkok is also in the same situation as Jakarta and the Thailand government is also planning to move its Bangkok capital to the north in the future.

Why do these capitals have to move at all if the seawall can block the seawater out?  The answer is crystal clear.

Many analysts don't understand economics at all. - Part 2

https://finance.yahoo.com/news/plunging-yields-insatiable-appetite-likely-to-deter-china-from-selling-treasuries-135134871.html

Many analysts are starting to back-peddle or retreat from their previous common analysis that China would unload its US treasuries to punish the US.

We had stated previously that China won't do that.  Please read our post below to understand the true rationale and logic behind the US treasuries selloff by China.

http://sg-stock.blogspot.com/2019/08/many-analysts-dont-understand-economics.html

Although the analysts had changed their common stance after they realized they were standing on shaky grounds, they had the rationale and logic wrong.

It is a shame that the universities are producing analysts that cannot analyze properly nowadays.  Many people don't truly understand what they're studying.......Sigh!

Saturday, August 17, 2019

18 August will be the judgement day for Hong Kong.

The HK protestors will be rallying a mass protest on 18 August (Sunday) with a proclaimed 3-million turnout.

China has warned that if the protest deteriorates into a massive riot, China will intervene by sending its military police and anti-terrorism force into HK.  China basic law allows such intervention without HK approval for anti-terrorism action.

Good luck to HK tomorrow!