Given the recent news Paris attacks and this morning's weak japan data, this week should be another round of selldowns, if not jittery trading to say the least.
At times as such, we should focus and spot for great blue chip shares at a discounted price. In other words giving an extreme example, if DBS were to be S$15.00, it's a very good bargain to buy some and hold for capital and dividend gains in the long run.
if you are intending to short the market, please remember be aware of breaking news and ensure sufficient cash to avoid margin call.
Personally i am looking to see if STI were to test, 2850 this week and 2740 within the next 3 weeks. If the support at 2740 were to be broken again, the next support will be 2700 and 2650
my 2 cents.
ComfortDelGro (CD SP) BUY
9M15: In Line. Recent profit taking provide reasonable entry opportunity
Analyst: Andrew Chow Tel: (65) 6590 6633
| Company | Share price(S$) | Recommendation | Our Target Price(S$) | Within Expectation (Y/N) | 9MFY15 net profit (S$m) | 1QFY16 yoy | Highlights of Results |
| CD SP | 2.98 | BUY | 3.30 | Y | 233.7 | +6.3% | See comments below |
9MFY15 results highlights
- Delivering as expected. 9M15 net profits rose 6% yoy to S$233.7m and accounted for 74% of our full-year estimates. Revenue growth was broad-based across main key segment as core businesses continued to improve.
- Balancing costs pressure well, leading to steady margins. Despite the upward pressure in costs, we feel CD has managed costs well, with 9M15 operating margins holding up at 11.6% (vs 11.5% for 9M14). Staff costs and depreciation costs went up 3.9% and 9.0% respectively but this was mitigated by a 9.6% yoy fall in fuel costs.
- Fuel hedging updates. As of 9M15, the group hedged 60% and 30% of its 2015 and 2016 fuel requirements respectively.
- Maintaining earnings. The group continues to deliver and we forecast CD to register a net profit growth of 9% yoy in FY16F.
- Maintain BUY with a DCF-based target price of S$3.30. CD's prospects remain steady, with a 3-year net profit CAGR of 11%. The group has a strong balance sheet and could be ready to pounce on potentially accretive M&A should the opportunities arise in the next 1-2 years. We see the recent share price pull-back offering investors a potential decent entry opportunity into CD.
Regards and great weekend!
Andrew Chow, CFA
UOB Kay Hian Research
DID: +65-6590 6633
Email: andrewchow@uobkayhian.com
This transmission has been issued by a member of the UOB Kay Hian Group for the information of the addressee only and should not be reproduced and/or distributed to any other person. Each page attached hereto must be read in conjunction with any disclaimer which forms part of it. Unless otherwise stated, this transmission is neither an offer nor the solicitation of an offer to sell or purchase any investment. Its comments are based on information obtained from sources believed to be reliable but UOB Kay Hian Group makes no representations and accepts no responsibility or liability as to its completeness or accuracy.
