■ Neo Group’s revenue hit record high at S$52.4m (+25.6% yoy), underpinned by the strong 27% growth in its food catering business.
■ Net profit grew by 111.9% yoy to S$6.4m in FY14 (FY13: S$ 3.0). The strong growth in net profit was mainly attributable to the strong top line expansion as well as an improving EBIT margin due to the economy of scale.
■ Supported by the strong EPS of 4.4 Scts, Neo Group proposed to pay out cash dividend of 2.67 Scts per share (60% pay-out ratio).
■ We expect the group’s bottom line to continue expanding, driven by the new capacity that will come online in 2HFY15 as well as the continued improving operating efficiency from cost control.
The short term green moving averages are attempting to cross above the long term red moving averages, denoting possible uptrend. Similarly, the black MACD line crossed above the red signal line, suggesting diminishing downward momentum and further upside. Following the two successive sessions of losses, we expect prices to rebound in today’s session on expected optimism in exports data. Phillip Futures offers trading in Bursa Malaysia Crude Palm Oil Futures.
BUY with a target price of S$0.45 as the stock attempts to close above its 200-day EMA after a Bollinger squeeze breakout towards the upside. Watch to see if a golden cross could form should its 50-day EMA turn above its 200- day EMA as its +DI may rise correspondingly with its ADX and MACD indicator risen above its centreline. Protective stops could be placed at S$0.325.
CCT posted 1Q14 revenue growth of 3.2% and DPU growth of 7.2% yoy. The topline and DPU account for 25% and 26% of our quarterly estimates, respectively. CCT’s next phase of growth is expected to be driven by the upcoming CapitaGreen, which is scheduled for completion in 4Q14. We lift our FY14 DPU estimate but tune down our FY15/16 forecasts by 3% to account for the slight dilution from the potential conversion of its CB due in FY15.
We keep our Hold rating, but with a higher DDM-based (discount rate: 7.7%) target price of S$1.55 on the back of relatively good take-up for CapitaGreen which we believe will negate the potential dilution from the CB conversion.