Stock calls for 21 July 2021

Date	Analyst	Company	Last	Target	Call	Valuation
07/21/21	DMG & Partners	Capitaland	3.88	4.4	Buy
07/21/21	UOB Kay Hian	Comfortdelgro	1.57	1.9	Buy	Sum of parts
07/21/21	Macquarie	DBS	29.58	31.5	Neutral
07/21/21	Kim Eng	Mapletree Logistics	2.1	2.35	Buy	DDM
07/21/21	OCBC	Mapletree Logistics	2.1	2.1	Hold
07/21/21	Jefferies	Mapletree Logistics	2.1	2.4	Buy
07/21/21	UOB Kay Hian	Mapletree Logistics	2.1	2.08	Hold
07/21/21	Lim & Tan	Mapletree Logistics	2.1	0	Hold
07/21/21	UOB Kay Hian	SPH	1.8	2	Buy	Sum of parts
07/21/21	Lim & Tan	SPH	1.8	0	Accumulate

Janet Yellen will be removing the US-China tariffs soon.

https://www.bloombergquint.com/global-economics/yellen-expresses-doubts-on-results-of-trump-s-china-trade-deal

As stated previously in our post and youtube videos, the US had to remove the US-China tariffs to contain the US inflation since the US inflation was not transitory.

Janet Yellen is testing the water now by discrediting the US-China trade deal.

http://sg-stock.blogspot.com/2021/06/why-did-us-treasury-secretary-contacted.html

Nanofilm - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
11/26/20	UOB Kay Hian	Nanofilm	3.1	4.07	Buy	PEG
12/10/20	UOB Kay Hian	Nanofilm	3.53	4.52	Buy	PER38.7x FY21
12/14/20	CIMB	Nanofilm	3.9	5.52	Add	PER35.3x FY22
03/02/21	UOB Kay Hian	Nanofilm	4.86	5.51	Buy	PER35x FY22
03/03/21	CIMB	Nanofilm	5.04	5.52	Add
03/18/21	DBS Vickers	Nanofilm	4.65	6.22	Buy	PEG1.13x
04/19/21	CIMB	Nanofilm	5.17	5.52	Add
06/25/21	DBS Vickers	Nanofilm	5.28	6.22	Buy

MM2 Asia - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
06/02/20	DBS Vickers	MM2 Asia	0.175	0.14	Fully Valued	Sum of parts, PER6x FY21
11/16/20	DBS Vickers	MM2 Asia	0.17	0.13	Fully Valued	Sum of parts, PER10x FY22
02/22/21	DBS Vickers	MM2 Asia	0.083	0.089	Hold	Sum of parts
04/28/21	UOB Kay Hian	MM2 Asia	0.073	0.098	Buy	Sum of parts
05/31/21	DBS Vickers	MM2 Asia	0.062	0.067	Hold
06/07/21	UOB Kay Hian	MM2 Asia	0.068	0.095	Buy	Sum of parts

Micro-Mechanics - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
06/24/20	Lim & Tan	Micro-Mechanics	1.78	0	Buy on weakness
08/31/20	Lim & Tan	Micro-Mechanics	2.07	0	Buy on weakness
09/07/20	Phillip	Micro-Mechanics	2.2	2.5	Buy	PER18x FY21
09/18/20	UOB Kay Hian	Micro-Mechanics	2.28	2.01	Hold	EV/Ebitda9.1x, Buy @ $1.70
10/02/20	Lim & Tan	Micro-Mechanics	2.3	0	Hold
11/02/20	Phillip	Micro-Mechanics	2.66	2.93	Accumulate	PER18x FY21, Ex-cash
02/01/21	Lim & Tan	Micro-Mechanics	3.64	0	Hold
02/02/21	UOB Kay Hian	Micro-Mechanics	3.75	2.87	Sell
02/08/21	Phillip	Micro-Mechanics	3.58	3.35	Neutral	PER21x FY21, Ex-cash
05/03/21	Phillip	Micro-Mechanics	3.33	3.02	Neutral	PER21x FY21, Ex-cash

Stock calls for 19 July 2021

Date	Analyst	Company	Last	Target	Call	Valuation
07/19/21	DMG & Partners	Dairy Farm	4.09	4.78	Buy
07/19/21	UOB Kay Hian	DBS	30.12	35.6	Buy
07/19/21	UOB Kay Hian	First Resources	1.33	1.65	Buy
07/19/21	DBS Vickers	Fu Yu	0.305	0.4	Buy
07/19/21	UOB Kay Hian	OCBC	12.07	15.52	Buy

Why is Singapore including Sinovac in its official national vaccination program soon?

The Singapore government has come to terms with the reality that covid cannot be eradicated and SG needs China more than the US for its economic growth.  Therefore, the SG government will be approving and including Sinovac in its official national vaccination program soon.

Let's see the importance of China to SG and the world.

China contributed almost 27% to the world economic growth despite being the 2nd largest economy compared to the US with only 11.6% world economic contribution.

China, including HK, contributed 26.2% of SG international trading and is SG's largest trading partner compared to the US (10.7%).

Let's calculate the individual economic impacts if we were to isolate China and the US with simplified examples.

GDP calculation:

GDP = Government spendings (G) + Investments (I) + Consumption (C) + Net Exports (X-M)

X = Exports

M= Imports

For simplicity's sake, we will assume the 4 GDP components to be equitable in the following manner:

G = $1T

I = $1T

C = $1T

Net Ex = $1T

Therefore, GDP = 1+1+1+1 = $4T

Since the SG economic structure is such that the exports figure is 3 times its GDP, we will need to extrapolate this (4*3=12) into the GDP.

GDP ($4T) = 1+1+1+ (12-11)

GDP ($4T) = 1+1+1+1=4

If SG were to decouple from China and lose 26.2% of China trades (exports & imports), the economic impact could be illustrated below.

GDP = 1+1+1+ [(12*73.8%)-(11*73.8*)]

GDP = 3+ (8.856-8.118)

GDP = 3+0.738=3.738

Thus, SG would shrink from $4T to $3.738T ($0.262T loss) and experience 6.55% (0.262/4) negative economic (GDP) growth.

If SG were to decouple from the US and lose 10.7% of the US trades (exports & imports), the economic impact could be illustrated below.

GDP = 1+1+1+ [(12*89.3%)-(11*89.3%)]

GDP = 3+ (10.716-9.823)

GDP = 3+0.893=3.893

Thus, SG would shrink from $4T to $3.893T ($0.107T loss) and experience 2.675% (0.107/4) negative economic (GDP) growth.

As we can see from the 2 simplified examples, SG will experience 2.45x (6.55/2.675) more economic losses if it loses China trades.  Furthermore, there will be the multiplier effects such as the declines in investments and consumption when the net exports are falling which we have excluded in this simplified illustration.  Thus, the true economic impacts will be greater than this simplified illustration.

Any wise government will know how to choose between -6.55% and -2.675% because no citizens will vote for a government that will impoverish them.

SG will have no choice but to approve Sinovac because it cannot afford to isolate China since it needs China to support SG's economic growth.

Baltic dry index - 3039

 Related stock: Sembcorp Marine, Cosco & Pan ocean.

US rig count (weekly) - 484

 Related stock: Sembcorp Marine & Cosco.