June 11, 2021
Market talk for the week (7 June)
What happened in markets this week, and what are analysts talking about?
•DBS; Initiate with BUY and TP S$3.80: More than 90% of revenue generated from rental income which has been time and “COVID tested” with minimal earnings disruption- the House believes Ho Bee’s earnings profile is similar to a REIT, enabling HoBee to pay out dividends of 10 S cents p.a. over last 4 years, translating to a yield c. 4%. Hobee trades at 0.5x P/B. With recent buybacks bringing free float down to 25%, possible scenarios cited by the House includes privatization, securitization of income production portfolio or conversion in to stapled security
Q&M Dental Group
• KGI; Maintain Outperform and raise TP to S$0.91. Q&M has remained resilient with its dental and medical services through COVID-19. Q&M has the largest network of private dental outlets in Singapore with over 90 clinics islandwide and 1 COVID-19 testing lab. Its overseas presence includes 36 clinics in Malaysia and 1 clinic in China.
•GEM COMM: A local proxy to the increased spending in satellites given Global Invacom’s leading status as a supplier for satellite communication ground equipment solution providers, supplying to MNC customers such as Hughes Network Systems, ST Electronics, Gilat etc. The Group has a strong net cash position of S$0.036 (vs share price of S$0.112), free cash yield of about 20+% with a positive earnings outlook with potential for margin expansion after outsourcing of its manufacturing in China to Phillippines.
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