Excerpts from analysts' report

DBS Vickers analysts: Yeo Kee Yan & Ling Kee Keng

Small-cap names can often shine despite uncertainty and malaise in the broader market. We begin 2016 with the following conviction picks under the following themes:

1) Growth – MM2, Riverstone and Sheng Siong
2) Yield – China Merchants Holdings (Pacific)
3) Recovery – Japfa

For mm2 Asia (BUY, TP S$1.05), earnings should be boosted by growth in local productions as well as its expansion into the China market. Riverstone (BUY, TP S$2.83) should benefit from an enlarged capacity as well as a strong USD vs 
Ringgit, while Sheng Siong (BUY TP S$1.01) is looking to see both store growth and margin expansion.

Japfa chick10.15Parent stock chickens used to lay eggs for DOC (day-old chicks). Photo: RHBA rebound in dayold-chick prices should help Japfa’s (BUY TP S$0.90) earnings to recover, and lastly, CM Pacific (BUY TP S$1.45) offers a highly attractive dividend yield of over 8%, with long-term earnings bolstered by recently acquired toll roads in China.

Watch out for potential reversions for oil & gas-related names. While we are bearish on near term oil prices, if it does recover significantly, and holds, we can expect to see a rebound in stock prices of oil & gas companies.

Among these names, we think Ezion (BUY, TP S$1) and Pacific Radiance (BUY, TP S$0.42) should bear the most watching.

Share Prices

Counter NameLastChange
AEM Holdings0.9000.030
Alliance Mineral0.1890.002
Anchor Resources0.0100.001
AusGroup0.027-
Avi-Tech Electronics0.275-
Best World Int.1.360-
China Sunsine1.1700.010
CSE Global0.480-0.005
Food Empire0.520-
Geo Energy0.148-
Golden Energy0.1990.001
GSS Energy0.071-
HMI0.5600.005
ISDN Holdings0.2300.005
KSH Holdings0.465-
Miyoshi0.046-
Moya Asia0.0780.001
Nordic Group0.270-
Oxley Holdings0.3050.005
REX International0.0630.001
Riverstone0.9300.015
Roxy-Pacific0.400-
Sing Holdings0.380-
SingMedical0.400-0.010
Sino Grandness0.0590.002
Straco Corp.0.760-
Sunningdale Tech1.3100.020
Sunpower Group0.4500.015
The Trendlines0.079-
Tiong Seng0.220-
Uni-Asia Group1.120-
XMH Holdings0.163-
Yangzijiang Shipbldg1.370-0.010

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