Excerpts from CGS-CIMB report.

Yangzijiang Shipbuilding (ADD, TP: S$1.45)
● YZJ expects its order for 2019 to be close to US$2bn, although it has only done US$696m YTD. We believe there could be some new contracts in the pipeline.

RenYuanLin 28.4.2016Ren Yuan Lin is expected to return soon to his Chairman job at YZJ.
NextInsight file photo
We keep our US$1bn order forecast intact for FY19. Order book stands at US$3.18bn for 83 vessels.

● There is newsflow of M&As among the Singapore yards, so interest could return to YZJ as it is trading at a significant discount despite firmer earnings and stronger balance sheet.

● It is trading close to 5-year trough of 0.7x CY19F P/BV, a discount to Singapore yards (1.2x). Catalysts are stronger orders and the chairman returning to duty.



AEM Holdings Ltd (ADD, TP: S$2.12)
lokewaisan8.17bExecutive Chairman Loke Wai San. NextInsight file photo● Positive earnings momentum into 1H20; our channel checks suggest that AEM has leased new factory space to cope with stronger demand.

● We expect more orders from Intel as it tries to catch up with competition.

● New product launch (hybrid Test Handler) could help drive FY20 earnings.

● Key risk is mainly 97% revenue dependence on Intel.



CSE Global (ADD, TP: S$0.73)
LimBoonKheng2.19MD Lim Boon Kheng. NextInsight file photo ● We are excited about CSE’s earnings growth potential, given its padded order backlog of at least S$300m by end-2020 (end 3Q20: S$232.6m).

● Though acquisitions within the year may have swung the balance sheet to a net debt position, we are still positive on them as they have broadened CSE’s regional reach or have been earnings accretive.

● The stock trades at FY20F P/E of 10.4x, below its 5-year average. Re-rating catalysts/downside risks include higher- /lower than-expected order wins and GP margins.


Full report on small-cap and big-cap picks is here.


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CEI0.955-0.005
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CNMC GoldMine0.250-0.005
CSE Global0.525-0.010
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Golden Energy0.162-
GSS Energy0.080-0.001
ISDN Holdings0.2200.005
ISOTeam0.2450.005
JB Foods0.645-
KSH Holdings0.440-
Miyoshi0.034-
Moya Asia0.065-0.002
Nordic Group0.275-0.005
Oxley Holdings0.3600.005
Procurri0.450-0.005
REX International0.169-0.005
Riverstone0.970-0.005
Roxy-Pacific0.395-
Sing Holdings0.395-
SingMedical0.295-
Straco Corp.0.670-
Sunningdale Tech1.280-0.010
Sunpower Group0.5600.010
The Trendlines0.089-
Tiong Seng0.200-
Uni-Asia Group0.7550.010
Yangzijiang Shipbldg1.1100.010

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