Excerpts from analysts'report

DBS Vickers analysts: Paul Yong, CFA & the Singapore Research Team

johnlim eyARA Group CEO John Lim. NextInsight file photo.♦ Our picks outperformed the market once again, top BUYs gained 13% over the last four weeks, led by mm2 Asia (+22.7%), while the sell call on Nam Cheong (-5.5%) also worked out 

♦ We add new initiations Cityneon and Jumbo, as well as ARA Asset Management to our top picks. Japfa and mm2 Asia are kept as well 

♦ Most of our top picks also offer Growth At a Reasonable Price (GARP), further underlining our confidence in them as conviction ideas 

♦ Equity Explorer: UG Healthcare 


Top picks for May performed firmly; three new picks added for June. Our top picks continue to perform, as the BUYs gained 13% on average since our last issue. Meanwhile, our sell call on Nam Cheong also worked out, as the counter fell 5.5%.

Our new picks for June include Cityneon, whose scalable business model with low execution risk appears attractive, and believe that the expansion of new stores will underpin growth for Jumbo. We also like ARA Asset Management, for its scalable business and ample firepower to grow its AUM through the launch of new funds or acquisitions from its REITs.

Company Share
price
Target price
ARA Asset Mgt $1.40 $1.76
Cityneon $0.825 $1.05
Japfa $0.78 $1.10
Jumbo $0.585 $0.68
mm2 Asia $0.675 $0.75

Looking for Growth At a Reasonable Price. While the Singapore market offers barely any growth on an overall basis (the projected earnings growth for STI is 2.2% in 2016), there are still SMC names that are projected to record firm earnings growth.

With market conditions still uncertain, investors would do well to look for stocks that offer Growth At a Reasonable Price (GARP). Under these screens, mm2 Asia, Cityneon, Jumbo Group and Japfa, all of which are among our top picks this month, also qualified as GARP ideas.

Equity Explorer: UG Healthcare. Owing to its dual platforms of manufacturing and distribution, UG Healthcare could benefit from a greater shift in pricing and bargaining power to distributors, as competition among glove manufacturers is expected to heat up ahead. However, prospects for the group should ultimately boil down to the execution and delivery of their longer-term plans.

SMC Radars: We also feature CNMC Goldmine, which is engaged in the exploration to production stages of gold dorés and Straco Corp, whose attraction in Shanghai could benefit from the spillover of tourists with the opening of Shanghai Disneyland.

Full report here.


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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