May 14, 2021

Market talk for the week (10 May)

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What happened in markets this week, and what are analysts talking about?

iFast

To recap, iFast reported its results in April with a record net profit of S$8.8m in 1Q (2.5x from a year ago); on the back of a 51.4% rise in revenue. Assets under admin (AUA) also grew to a new record of S$16.1b. Link to results ppt

• UBS; Aakash: Initiate BUY with TP of S$10. While at first glance, iFast is expensive at 48x Forward PE, however, the House believes that near-term growth is not priced in, not to mention the potential hockey stick growth which the House believes may be possible given the scalability of the business. The House believes iFast may enjoy strong growth given (1) its recent history of rapid 20%+ AUA growth; (2) Early experiences of mature peers; (3) Structural Asian wealth management growth opportunity in SG/China; (4) Greater acceptance of online platforms and (5) Room to grow market share in 5 key markets.

Riverstone Holdings

CIMB; Ong Khang Chuen: Maintain BUY with a lower TP of S$1.80. Continue to like Riverstone for its strong earnings prospects as it benefits from the robust glove demand in both cleanroom and healthcare sectors. Hower, the house lower TP due to a switch to DCF valuation methodology to better reflect the inflection in selling prices and earnings normalisation in coming years. The house sees dividend yield for FY21F to potentially rise to 13.2% assuming a 60% payout ratio. 

UOB; John Cheong: Maintain BUY with a higher TP of S$1.75. 1Q net profit beat the house estimate by >100% due to higher than expected ASP and net margin, as well as favorable demand-supply dynamics. The house sees Riverstone’s cleanroom gloves as standing a good chance to maintain favorable ASP beyond COVID-19 as unique selling points. 

Propnex

UOB; Adrian Loh: Maintain BUY with a higher TP of S$1.34. 1Q net profit jumped 97% to S$16.2m beating estimates. According to management, the stronger results were due to improved market sentiment, successful COVID-19 vaccine rolls out locally, and availability of ample liquidity, and attractively priced new project launches. While Management believes cooling measures are likely but it will be targeted in nature as the pace of economic recovery remains uncertain. 

CIMB; Lock Mun Yee:  Maintain BUY with higher TP of S$1.19, based on 10x FY2021F PE and DCF valuation. The House raised its earnings estimates for FY21-23F by 14.9-21.9% after increasing its private resale and primary market transaction value assumptions due to a higher mix of centrally located products. 

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