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SHS Holdings Limited

Expecting further delays



 Revenue disappointed by S$3.4mn or 7%. The company swung into a wider than expected net loss of S$12mn compared to our estimated loss of S$7mn. Operating expenses and a S$5mn write-off was higher than expected.

 The corrosion prevention and solar segment posted healthy growth YoY helping alleviate weakness in engineering and construction.

 We revised FY19e revenue downwards by 9% and a net loss of S$183k. We have changed our valuation method to 0.7x P/B in line with peer valuations. Downgrade to NEUTRAL with a lower target price of S$0.194 (prev.S$0.24).


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Y Ventures Group Ltd

More controlled expansion



 Results were below expectations due to poor sales of non-book products, weaker gross margins, higher operating expenses and write-offs in inventory and bad debts.

 80% of FY18 revenue is from the sale of books and YVEN has expanded their publishing principals from 1 to 8.

 A major change is strategy is to faster monetize their data analytics capabilities through the sale of services.

 We lowered FY19e earnings to marginal profitability. Any turnaround in profits is earmarked in FY20e. Our target price of S$0.16 will be based off FY20e earnings and PE of 30x. This is priced against other e-retailer comparables.


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Japan Foods (JFOOD SP)

Near-Term Headwinds; Prefer Sheng Siong


 Stay NEUTRAL with SGD0.45 TP from SGD0.48, 5% upside, with c.5% FY20F (Mar) yield as we lower FY19F-20F earnings by 12%. The ongoing rationalisation of stores and moderating consumer discretionary spending amidst slowing economic growth has dragged profits lower in FY19. While Japan Foods continues to improve operational efficiencies, expand regional presence, refresh its ageing brands and launch new franchise brands, intense competition and tight labour supply could keep near-term profits depressed. A net cash balance sheet, strong FCF generation and c.5% yield should provide support to its share price. Sheng Siong (SSG SP, BUY, TP: SGD1.25), a grocery retailer, is our preferred pick in the Consumer sector.


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LionelLim8.16Check out our compilation of Target Prices