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


KGI; Joel Ng: Upgrade to Outperform with TP S$0.91Valuations are attractive with bulk carrier upcycle and resilient property markets in HK and Japan. The House raises its multiples for shipping division from 0.2x to 0.5x P/B while maintaining 0.5x P/B for its HK and Japan property business. Forecast dividend of 3-3.5 S Cents on 40-48% payout ratio to give an implied dividend yield of 5%. 


PhillipCapital; Terrence Chua: Downgrade to neutral with lower TP S$0.64: Given the slower than expected recovery in consumption, the house lower its profit forecast and reduced its TP to S$0.64 implying a PE of 18.5x FY21F. Koufu has seen a fall in footfalls for its food outlets in malls and tertiary institutions as Singapore move into Phase 2 (Heightened Alert). Construction of its integrated facility has also been delayed by COVID-19 measures to 3Q21, where the Group will be occupying 75% of total GFA and leasing out the remaining. 

Boustead Projects 

Boustead Projects reported a net profit of S$131.7m which was below expectations, as its design and build segment was affected by COVID-19. With the successful unlocking of its value and capital recycling, Boustead Projects has declared a special dividend of 14.5 S cents, with a total FY21 DPS of 15.4 S cents translating to a yield of 13.9%. 

CIMB; Ong Khang Chuen; Add with higher TP S$1.40:  Valuations are attractive with net cash of S$0.95/share as of end of FY21, while owning a portfolio of industrial properties worth S$700m that can be potentially injected into property trusts. Raise TP to S$1.40 on 25% discount to RNAV of S$1.86 (post-special dividend payout). 

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The market has been reacting with each new Covid development. But has it gone in the direction you expected it to go? We break down the share price changes of eight local companies from Circuit Breaker to Phase 2 (Heightened Alert). 

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


Tencent reported 1Q results which were generally in line with estimates. Revenue +25% yoy to RMB135,303m ; Net profit +65% yoy to RMB47,767m while non IFRS net profit grew 22% yoy to RMB33,118m. 

Results highlights

CIMB; Mark & Chi Man: Maintain ADD with a lower TP of HK$677.1. The slowdown in online game revenue growth was somewhat expected due to the positive impact of COVID-19 in 2020 on online gaming revenue. Tencent stated that it would increase its investment in 3 strategic areas (1) Business services (SaaS products); (2) games; (3) short video. The increase in investment is expected to put pressure on near-term profitability- as such reduce net profit forecasts for FY21-23F with a lower DCF based TP of HK$677.1.

• UBS: Maintain BUY with a lower TP of HK$730. Sees Tencent as the less risky option in a sector facing regulatory and competitive headwinds. Believe the magnitude and pace of investment will be milder compared to peers who are building asset-heavy and lower margin businesses. As a result of the investments which will hit near term earnings, revise earnings down by 7% in 2021-2022 and lower PT to HK$730 (from HK$780).

UOB: Maintain BUY with a lower TP of HK$789. Good 1Q results as online gaming revenue growth normalizing, online advertising remaining strong and Fintech and business services revenue growth accelerating to 47% on faster growth from cloud segment, consolidation of Bitauto, and healthy growth in fintech services. However, the House also reduced it TP to HK$789 (from HK832) as it lower its net profit forecasts on ongoing investments and as the company enter another period of transition. 

Singapore Airlines

UOB; K Ajith: Maintain SELL with lower TP S$4.15: Earnings were within expectations, however, the issuance of S$6.2b in mandatory convertible bonds (MCB) offers shareholders little to cheer. Temasek has given an undertaking to take up any unsubscribed portions. Including the latest MCB, SIA would have raised S$21.6b since the pandemic started. Monthly operating cash burn has declined to S$100-150m from S$250m in Feb 21. SIA plans to raise pax capacity to 32% (of pre-pandemic levels) by Jul 21. (Currently pax capacity in Apr 21 was 24% of pre-pandemic level)

CLSA: Maintain SELL at S$4.20. The house remains cautious of SIA’s recovery outlook and lowers its passenger traffic assumption cutting its FY23F net profit forecast by 16%. Stock is trading at 1.3x forward P/B against a long-term average of 0.96x. 


Jiutian is a manufacturer of chemicals that are used as feedstock for a variety of applications including DMF, which is used in consumer goods, pharmaceutical, agrochemical products and electronics sectors.

KGI, Joel: Initiate Outperform with TP of S$0.145: TP is based on 7x FY2022F PE, as the House expects to record earnings in 2021, helped by favorable industry supply/demand dynamics. The Group declared its first dividend since 2008 of S$0.0035 for 1Q2021. The House forecasts a full year dividend of S$0.0063-0.0084 for FY2021-2023F based on 30% payout ratio, which will translate to a yield of 7-9%. 

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What happened?

China has banned financial institutions and payment companies from providing services related to cryptocurrency, warning investors against speculative trading.

According to a report by Bloomberg, China is home to about 70% of the world’s bitcoin-related calculations deriving from IP addresses based in China.

Prior to this, the cryptocurrency market has already been under pressure after Tesla’s Elon Musk declared that Tesla will stop accepting Bitcoin payments, due to the “rapidly increasing use of fossil fuels for bitcoin mining”.  To make matters worst, the world’s biggest cryptocurrency exchange, Binance, came under investigation by the Justice Department and IRS, as it faces probe by US money laundering and tax sleuths. 

The total cryptocurrency markets are now down more than 20% from their peak in May, although it is still up a staggering 1.5x since the start of the year. 

Global cryptocurrency total market cap (year to date)

Source: coinmarketcap

Bitcoin has lost more than 30% from its peak, but is still up 30% year to date.

Ethereum is also down nearly 30% from its peak, but is up nearly 4x year to date, outperforming its big brother, Bitcoin.

Source: coinmarketcap

Cryptocurrency crashes are common – but also scary and big

Looking back into history, cryptocurrency crashes have been big and probably not for the weak-hearted. Here is an old image of the bitcoin crashes as compiled by howmuch.net and if history was a guide, it ranges from 30% to as much as 87%. 

Source: marketwatch & howmuch.net

Its not all bad… and probably not the end for cryptocurrency.

As bad as all the headlines may look right now, it is worth taking a step back to look at things from the broader perspective. The cryptocurrency has came a long way since and is in a much better position now than it was a few years ago, with greater adoption among institutions and consumers and the increased access provided by companies such as Paypal, Square, and investment firms such as DBS, Goldman Sachs etc for investors. 

The practical utility of cryptocurrency has also been affirmed with the EIB launching its first digital bond issuance on the Etherum blockchain platform in April 2021. 

So is this a buy on dips market? Pls let us know in the comments section below.

Disclaimer: The writer owns Ethereum and other digital coins at the point of writing.

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


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. 


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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What happened?

Meituan’s share price dropped as much as 9.8% on Monday after its CEO’s social media post over the weekend sparked concerns that Meituan may face more regulatory crackdown.

Meituan CEO cited a poem about burning books during the Qin dynasty in a social media post which sparked speculation that he was complaining about the regulatory crackdown.

Wang has subsequently deleted the post and denied that the post is about the crackdown.

In his re-post, he clarified that the post was about the Qin dynasty being wary of scholars, but the ultimate downfall of the Qin Dynasty came down to someone who did not was from Liu Bang who did not read any books. This ancient poem reminded him that the most dangerous competitors are usually not the expected ones- likening the case to Alibaba vs JD.com vs Pingduoduo.

However, the damage has already been done as Meituan closed 7% down on Monday, closing below HK$274, its recent support, which may suggest further downside from a technical perspective. Meituan is down more than 40% from its 52 weeks high and 10% year to date. 

Source: AAstocks

What others are saying?

The post was a very famous anti-establishment poem, which suggests that Meituan may be under huge pressure from the government. It also does not reflect well of Meituan during this period of a crackdown. Sentiments for the China tech sector remain poor as concerns over the government’s regulations continue to linger, and catalysts for market leaders such as Meituan in the near term remain weak.

In terms of valuation, Meituan is attractive as it trades at 7.8x EV/sales- near a 1 year low, after its significant re-rating which started in Mar 2020. 

Meituan remains one of the key technology powerhouses, with its dominance in food delivery and online travel booking. However, as price action continues to struggle with ongoing regulatory concerns, are you a bull or a bear for Meituan? Let us know in the comments section below. 

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

MC Payment

RHB issued its Top 20 small-cap jewels for 2021, and MC Payment was part of this year’s series.

RHB; Shekhar JaiswalMC Payment is the first SGX-listed proxy to growth in the ASEAN digital payments industry, providing an integrated digital payment infrastructure for merchants by offering a one-stop solution to accept all forms of digital payment and enabling them to run their businesses both online and offline. The house believes that MC Payment is a good proxy to e-payment growth in ASEAN, amidst the rising household income and increasing online commerce, underlying the need for economies to go cashless. The house also notes that, MC Payment’s closest ASEAN listed peer, GHL SYstems has seen earnings growth at 33% CAGR, and share price performance of 300% return in 5 years. 

Marco Polo Marine

RHB issued its Top 20 small-cap jewels for 2021, and Marco Polo Marine was part of this year’s series.

RHB; Jarick Seet : The house sees Marco Polo Marine as an Oil and Gas turnaround play having reversed from a loss of S$3.9m in FY18 to a positive EBITDA of S$2.4m in FY19. With a brighter outlook, the house sees a return to profitability in FY20-21F as highly possible with a continued pick-up in ship chartering, and ship repair/building activities. The house sees potential for a strong re-rating for the stock once profitability starts to kick in. Currently, the house believes Marco Polo Marine holds deep value where the Group is in a net cash balance sheet, and currently trading below significantly impaired NAV, and white knights’ and creditors’ entry price.


Maybank; Gene Lih Lai: 1Q21 net profit was weaker than expected due to tougher comparison year on year, and cyclical softness ahead of volume ramp of new generation test handlers. The house increase TP to S$5.56 to roll forward to 14x FY22F PE, as it believes investors should focus on recovery potential of the Group.

KGI; Kenny Tan: Maintain Outperform but with lower TP of S$4.36. Believes that long term prospects remain bright but there is limited near term upside to share price. Expect catalysts in 2H21 from potential surprise in orders inflow. 

CIMB; William Tng: Reiterate Add with unchanged TP of S$4.63. AEM expects 1H21 financial performance to be weaker yoy, but guided for a stronger 2H vs 1H. House sees share price weakness as a chance to add. 

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What happened?

Ethereum, the second-largest cryptocurrency after Bitcoin, has been stealing the limelight of late. Prices broke above $3,000 to set a new record high, after rising more than 300% year to date.

Year to date market capitalization of Ethereum (USD)

Source: Coinmarketcap

Why did it happen?

According to some crypto experts, they believe this is a catch-up rally by Ethereum (ETH)  to the gains of Bitcoin which rallied late last year, with the rise in interest from institutions. However, with ETH’s recent rise, it is now Bitcoin that is now lagging behind. ETH has gained more than 1,400% over the last 1 year vs Bitcoin which has gained more than 500% over the past year. (Still decent gains for both)

Other reasons attributed to the rise of ETH includes 
1) The issuance of European Investment Bank’s (EIB) first ever digital bond (EUR 100m 2 year bond) on the ETH blockchain. This sparked a “bullish institutional use case for Ethereum”, following the support by EIB who believed “the digitalization of capital markets may bring benefits to market participants in the coming years, including a reduction of intermediaries and fixed costs, better market transparency through an increased capacity to see trading flows and identity asset owners, as well as a much faster settlement speed.” Click here to see how ETH transactions work. 

2) Rising popularity of non-fungible token (NFT), which boosted the demand for ETH as most NFTs are part of the ETH blockchain. NFT are “tokens that we can use to represent ownership of unique items.” and it can be anything that is digital including drawings, songs, etc, where you buy the ownership of the digital asset. The most well-known NFT so far will probably be the sale of the first tweet by Twitter’s founder and CEO, Jack Dorsey, who sold it as an NFT for $2.9 million.

NFTs’ popularity surged in recent years as more people buy and sell digital artwork. Most of the NFT tokens are built on the ETH network which  enable NFT to work due to the reasons below (as quoted from ethereum.org)

  • Transaction history and token metadata is publicly verifiable – it’s simple to prove ownership history.
  • Once a transaction is confirmed, it’s nearly impossible to manipulate that data to “steal” ownership.
  • Trading NFTs can happen peer-to-peer without needing platforms that can take large cuts as compensation.
  • All Ethereum products share the same “backend”. Put another way, all Ethereum products can easily understand each other – this makes NFTs portable across products. You can buy an NFT on one product and sell it on another easily. As a creator you can list your NFTs on multiple products at the same time – every product will have the most up-to-date ownership information.
  • Ethereum never goes down, meaning your tokens will always be available to sell.

So will Ethereum continue to rise? We are in the bull camp for ETH as in addition to being a cryptocurrency, ETH actually offers functionalities such as smart contracts which are starting to gain the traction and support from major institutions and sectors. Hopefully as the number of use cases increase, so will the price. Go ETH Go Go Go!

Are you a ETH bull or bear? Let us know in the comments section below!

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


The Chinese State Administration for Market Regulation has launched investigations on Meituan over alleged monopolistic behaviors. Meituan has previously been criticized by rivals and merchants for their alleged excesses such as forced exclusive arrangements and had previously also been found guilty of unfair competition where Meituan was ordered to pay compensation to its rival, Alibaba’s Ele.me in food delivery. 

• Goldman Sachs: Meituan has published a statement saying that the Group will actively cooperate with regulators to further improve compliance with the regulations. During the recent briefing, Meituan stated that it has been actively adjusting business practices including the modification of how it charges merchants, separate transaction services, and actual on-demand delivery charges to help create a healthier transparent charging environment. 
•CIMB: Meituan’s total FY20 sales was RMB115b. The amount of fine is estimated to be RMB1.15-11.5b (1-10% of total sales), representing 20-197% of the House’s FY21F adjusted net profit. Previous monopoly investigation towards Alibaba has lasted 3-4 months. 
•UBS: Not surprised by the announcement. Believe Alibaba’s recent investigation could be a good benchmark, and if Meituan is fined also 4% of last year’s business unit revenue, its potential fine could be RMB2.7b. (If it includes store business, the potential fine could be 24% higher). Excluding recent raise of US$10b, Meituan had RMB61.1b cash and short-term investments. Still like Meituan for its long-term growth prospects, and with prices down 31% from recent peak vs Alibaba’s down 27%, suggesting investors have priced in some regulatory concerns. A conclusion to the investigation could be a positive catalyst. 

mm2 Asia

UOB Kayhian; Lucas Teng/John Cheong: Initiate coverage on mm2 Asia with a SOTP target price of S$0.098. mm2 is trading at 0.6x P/B and inexpensive FY20 earnings (pre-COVID-19). Concerns over the Group’s cinema business could be slowly lifted with: a) improved seating capacity, b) a potential spin-off, and c) a  potential merger with Golden Village, while the overhang from its high debt levels has also been addressed. The group has recently completed a rights issue of approximately S$54.7m which reduces net gearing to approximately 0.8x (vs 1.0x previously) and enables interest savings with the repayment of a medium-term note. There is also a possible spin-off for the cinema business, in which convertible bonds of S$47.9m will be converted to equity in the listed cinema entity. If the cinema IPO materializes, this will further reduce the group’s net debt level to 0.4x.

Singapore Exchange

• UOB  Kayhian; Lucas Teng: Initiate Coverage on SGX with Buy recommendation and Target Price of S$12.35. SGX is benefitting from structural tailwinds including the electronification of OTCs and passive investing. Potential catalysts may include Singapore-based secondary listing of foreign listed entities such as Grab or SEA ltd. 

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What happened?

US stocks dropped briefly last week after news broke that US President Joe Biden is looking to almost double capital gains tax rate for the rich (those earning $1 million or more) to 39.6% from the current base rate of 20%. The increase would equalize the tax rate between wage and capital gains (Current capital gain tax is 23.8%- 20% base rate + 3.8% net investment income tax   vs current highest wage tax bracket of 37%). 

The proposal has not been officially announced but according to reports, President Biden is likely to release the details in a joint address to Congress on April 28, along with details of the American Familes plan. 

Any hike in taxes however would have to go through US Congress, where Democrats currently hold a narrow majority. 

Putting into perspective 

Source: JPM Cross-Asset

If passed, the capital gain tax will be the highest tax rate paid on investment gains (mostly by wealthiest Americans), where the rate has not been higher than 33.8% since World War II.

What others are saying

UBS: Only 25% of US equities are owned by US taxable investors, with the remaining held by those not subjected to the capital gains levies. Expect a buy on dip by investors who are not affected which may lend support to share prices. 

Goldman Sachs: Past capital gains tax hikes have resulted in some short term declines in equity prices. However, the trend of selling and falling stock prices are usually short-lived, reversing in subsequent quarters. 

Source: Goldman Sachs

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