By Say Cheong //
August 2, 2021

Singapore has been weaving in and out of heightened alert across the month due to the rise in COVID cases in the middle of the month. Lots of disappointments across the nation have been raised especially from the F&B sectors.

Stocks were however not as negative as some of the indexes such as Dow Jones, clinching all-time highs. We have found 7 stocks listed on the SGX for you to take note for the month of August.

#1 Raffles Medical Group

CGS CIMB has maintained ADD rating on the stock with a target price of $1.40.

Main driver of the positive sentiment is due to return of domestic patients. ” According to the Ministry of Health (MOH), specialist outpatient clinic visits across the industry recovered in Jan-Apr 2021, vs. the same period in 2020 (Fig 2).

Average monthly visits were 23% higher compared to 2020, and were 4% higher than pre-Covid19 levels in 2019. Higher footfall at RFMD’s clinics could translate to higher healthcare services revenues in FY21F, in our view.

With the return of domestic patients to clinics, we estimate healthcare services revenue, ex-Covid-19-related services, to grow by 20% in FY21F to levels comparable to FY19’s healthcare services revenue.”

>> Read more about the company here.

#2 ST Engineering Ltd

UOB Kay Hian has maintained its BUY rating of the company with a target price of $4.26.

The positive rebound in the US airlines is a driver of the sentiments. ” Rebound in US domestic pax capacity bodes well for ST Engineering’s (STE) aircraft maintenance business.

The US, which has the third highest rate of vaccinations after Israel and Britain, could potentially reach herd immunity within four months. The optimism is reflected in US airlines’ seat capacity, which as at 28 June was only 10% lower than prepandemic levels, based on data from OAG. Much of the capacity was devoted to domestic routes and international capacity is relatively unchanged.

But that could reverse in the coming months as the US had eased its travel warnings to 110 countries on 1 June. This could eventually lead to US airlines mounting international capacity, particularly on transatlantic routes.

STE has a large aircraft maintenance presence in the US and counts the big US airlines as customers. Airlines are required to fulfil regulatory maintenance after extended downtime, prior to return to service checks. This should benefit STE’s airframe maintenance business as well as their component and engine repair businesses.”

>> Read more about the company here.

#3 Fortress Minerals Ltd

Phillip Capital has maintained its Buy rating on the company with a target price of $0.81.

The positive sentiment is because of the increase in volume of iron ore traded and the improvement in margins.” Iron-ore concentrates sold increased 61.6% YoY in 1QFY22. This lifted revenue by 143.8%. QoQ, volume sold and revenue were down 19.2% and 0.3% respectively, mainly due to seasonality

Gross profits almost tripled from US$5.0mn in 1QFY21 to US$13.9mn, with gross profit margins up from 71.1% to 80.5%.

This was achieved with higher realised ASPs for iron-ore concentrates, which went from US$94.97/DMT in 1QFY21 to US$143.00/DMT. Unit costs climbed from US$24.88/WMT to US$25.55/WMT, mainly due to RM strength against the US$.”

>> Read more about the company here.

#4 Jiutian Chemical

KGI Securities has maintained its rating on the company with a BUY rating on the stock with a target price of $0.12.

The conviction of the analysts comes from the fact that “China’s economy has benefited from supply disruptions in the rest of the world.

We see this trend continuing this year and may surprise on the upside given the unprecedented amount of fiscal and monetary stimulus around the world.

Jiutian is the second-largest Dimethylformamide (DMF) producer in China, with a total annual capacity of 150,000 tons of DMF and methylamine (MA). Both these chemicals are important ingredients in industries as diverse as consumer goods, petrochemicals, electronics, pharmaceuticals and fertilisers”

>> Read more about the company here.

#5 Singapore Exchange Limited

UOB Kay Hian has maintained a rating of BUY and with its target price at $12.35.

The remarkable future of the company is due to the “opportunities for growth.

Separately, the group continues to outline its strategy to acquire, build and partner for growth. Revenue CAGR in the medium term is expected to be in the mid-high single digit. One area of growth is in forex, where the group’s forex volumes continue to show a steady growth.

SGX has highlighted the increasing usage of multi dealer platforms and electronic communication network (ECN) in the OTC markets. As such, the group is looking to set up an OTC electronic communication network anchored in Singapore, building an integrated forex offering which combines both forex futures and OTC forex offerings.

Currently, we have built in a 9% revenue CAGR from FY20-23F for the group’s forex volume traded.”

>> Read more about the company here.

#6 HRnetGroup Limited

Phillip Capital has initiated its BUY rating on the company with a target price of $1.00.

The main driver of the sentiment is mainly because its leadership position in the market.

“As a human-resource business, its operations do not require much PPE. Its 152% ex-cash ROE can be attributed to strong income generation built on scale and reputable brands, led by an experienced board and management team.

According to Frost & Sullivan, HRnet is the largest employment agency in Singapore with a 20.5%market share based on 2015 revenue. In a recent ACRA compilation, HRnet remained the largest and most profitable recruitment service player in Singapore.”

>> Read more about the company here.

#7 Marco Polo Marine

UOB Kay Hian has maintained its BUY rating on the company with a target price of $0.036.

The extremely positive sentiment is because of the “Rationalised vessel chartering industry. Since the oil crisis in 2014, Clarksons data suggests that vessel charter rates have rationalised, helped by minimal newbuilds and more vessels on lay ups. Furthermore, rising vessel utilisation from demand in the infrastructure and renewable energy sectors in Southeast Asia has benefitted the remaining players in the offshore support industry.

In 1HFY21, Marco Polo Marine (MPM) reported an 88% yoy jump in core EBITDA to S$4.0m. The positive set of financials came on the back of higher revenue of S$21.1m (+13.8% yoy) attributed to the commencement of two new construction projects under its ship building division and increased ship repair jobs, as well as gross margin expansion to 23.8% (1HFY20: 18.4%) from the absence of one-off reactivation costs.”

>> Read more about the company here.

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