Stock calls for 8 December 2021

Date	Analyst	Company	Last	Target	Call	Valuation
12/08/21	DBS Vickers	Bumitama	0.56	0.75	Buy	DCF
12/08/21	UOB Kay Hian	Dairy Farm	3.04	3.6	Buy	PER22.2x
12/08/21	DBS Vickers	First Resources	1.51	1.83	Buy	DCF
12/08/21	Lim & Tan	Q&M	0.62	0	Buy
12/08/21	DBS Vickers	Yangzijiang	1.32	1.95	Buy

How the China RRR cut will impact its economy? - Part 2

China had cut its required reserve ratio (RRR) for the 2nd time this year recently.

The average weighted RRR was also cut from 8.9% to 8.4% in December 2021.

How will the reduced RRR help to boost China's economy?  We had explained this before.

http://sg-stock.blogspot.com/2019/05/how-china-rrr-cut-will-impact-its.html

We will illustrate the differences in RRR with examples.

The deposit rates in China are as follow:

RMB deposit rates in Singapore from a China bank are:

Since the 1-year deposit rate is almost identical to a 2-year deposit rate in China, we will use the 2-year deposit rate in China (2.1%) as the cost of debt.

If the RRR is 12.5%, the effective cost of debt rate will be 2.4% {2.1/(100-12.5)}.  When the RRR is reduced to 11.5%, the effective cost of debt will be 2.37% {2.1/(100-11.5)}.  Thus, we can see that the bank's cost of debt is reduced as the RRR goes lower because the bank doesn't need to hold more cash. Furthermore, the extra idling cash can be put to better use to generate some income which will increase the bank's profitability.

In conclusion, we do not expect China to reduce its benchmark rates to boost its economic growth because of elevated PPI and rising CPI.  Conversely, China will continue to reduce its RRR since it still has a high RRR compared to western countries and China will also inject liquidity into its financial system through the repo market whenever the need arises.

CSE Global - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/18/21	DBS Vickers	CSE Global	0.5	0.55	Buy
02/18/21	UOB Kay Hian	CSE Global	0.5	0.53	Hold
02/25/21	CIMB	CSE Global	0.49	0.63	Add	PER12x CY22
02/25/21	DBS Vickers	CSE Global	0.49	0.64	Buy	PER9.9x
03/17/21	Amfrasers	CSE Global	0.535	0.61	Outperform	PER12x FY21
04/07/21	UOB Kay Hian	CSE Global	0.54	0.68	Buy	PER13x FY22
05/21/21	CIMB	CSE Global	0.51	0.63	Add
05/21/21	DBS Vickers	CSE Global	0.51	0.63	Buy	PER11.1x FY21
05/24/21	UOB Kay Hian	CSE Global	0.52	0.68	Buy
06/15/21	UOB Kay Hian	CSE Global	0.535	0.68	Buy
08/13/21	DBS Vickers	CSE Global	0.515	0.61	Buy	PER11x FY22
09/03/21	CIMB	CSE Global	0.475	0.61	Add	PER12x FY22
10/20/21	DBS Vickers	CSE Global	0.51	0.61	Buy
11/12/21	DBS Vickers	CSE Global	0.51	0.61	Buy
11/12/21	CIMB	CSE Global	0.51	0.61	Add	PER12x FY22
11/15/21	UOB Kay Hian	CSE Global	0.5	0.59	Buy	PER11.4x FY22
11/25/21	DBS Vickers	CSE Global	0.5	0.6	Buy	PER11.5x FY22

Cromwell EUR - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
05/03/21	DBS Vickers	Cromwell EUR	0.475	0.6	Buy	DCF
06/23/21	DBS Vickers	Cromwell EUR	2.37	3	Buy	DCF
08/17/21	DBS Vickers	Cromwell EUR	2.53	3	Buy	DCF

Credit Bureau - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/17/21	CIMB	Credit Bureau	1.26	1.53	Add	DCF
06/07/21	Lim & Tan	Credit Bureau	1.25	0	Buy
08/03/21	CIMB	Credit Bureau	1.3	1.53	Add	DCF
08/10/21	CIMB	Credit Bureau	1.29	1.43	Add

Stock calls for 7 December 2021

Date	Analyst	Company	Last	Target	Call	Valuation
12/07/21	CIMB	BRC Asia	1.5	2.1	Add
12/07/21	Lim & Tan	City Developments	6.83	9	Accumulate
12/07/21	UOB Kay Hian	Digicore Reit	1.01	1.18	Buy	DDM
12/07/21	Lim & Tan	Keppel Corp	5.13	6.68	Buy
12/07/21	DBS Vickers	Micro-Mechanics	3.17	4.05	Buy

The world economic conditions have deteriorated further. - Part 4

https://finance.yahoo.com/news/china-exports-imports-hit-records-044647007.html

China's exports and imports have exceeded forecasts and these figures look set to boost China's GDP growth in Q4 2021.  The GDP trajectory is within our earlier projection below.

Export growth (%)

Import growth (%)

http://sg-stock.blogspot.com/2021/11/the-world-economic-conditions-have.html

"Furthermore, China's GDP has also declined to 4.9% but we believe that this figure will be the trough for China since its GDP growth will rebound in Q4 due to the upcoming festive season (CNY)."

Cordlife - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
03/12/21	Soochow	Cordlife	0.37	0.52	Buy