shopper360 started at 'trading buy' despite CEO's resignation amid allegations of misconduct

shopper360 started at 'trading buy' despite CEO's resignation amid allegations of misconduct

By: 
Stanislaus Jude Chan
13/06/18, 03:14 pm

SINGAPORE (June 13): Phillip Securities Research is initiating coverage on Malaysia-based marketing services provider shopper360 with a “trading buy” recommendation and a target price of 33 cents.

The target price is more than 83% higher than shopper360’s last traded price of 18 cents on May 8.

The brokerage’s coverage initiation comes despite shopper360 losing its CEO just two months ago.

The company on Apr 17 announced that then-CEO Samuel Chan had resigned voluntarily amid an internal investigation of alleged misconduct. It did not disclose further details on the investigations nor the nature of the alleged wrongdoing.

Group managing director and executive chairman Chew Sue Ann will assume the role of CEO while the group searches for a suitable replacement, shopper360 said in a filing to SGX.

“Management noted that the recent negative news on its regional director, Mr Samuel Chan, does not have any impact on the group’s financial and business operations,” says analyst Soh Lin Sin in a report on Wednesday.

In the 1H18 ended November, the group reported a 31% rise in earnings to RM 4.6 million ($1.53 million), on the back of the disposal of loss-making Paragon Premium.

See: shopper360 posts 31% rise in half-year earnings to $1.5 mil after disposing loss-making unit

Soh believes that shopper360 could see a stronger FY19, driven by new contracts with higher margins. She forecasts that shopper360’s core earnings will grow at 20% per annum in FY18-19.

“New customers acquired, including the media concession rights for Shell and MyNews, creative agency contract for Burger King Singapore, as well as media reseller rights for Spotify Malaysia, provide visibility of earnings for FY19,” Soh says.

At the same time, the analyst opines that the group could capitalise on the potential of Myanmar’s fast-growing market.

“We believe that its strategic partnership with Pahtama Group – Myanmar’s leading modern retail chain – provide S360 first mover advantage in Myanmar,” Soh says.

“Rising consumer affluence, increasingly sophisticated consumer as well as intensifying competition in Malaysia, Singapore and Myanmar would drive higher demand for marketing and promotional activities,” she adds.

In addition, Soh notes that shopper360 is currently trading at an attractive valuation, below its IIPO price of 29 cents in June last year.

“Adjusting for the listing and listing related expenses, it is currently trading at trailing 12-month price-to-earnings ratio (P/E) of 5.8 times, as compared its global peers’ average trailing 12M P/E of 13.0 times,” she says.

Winners and losers from Singapore's budget as election looms

SINGAPORE (Feb 19): Singapore Finance Minister Heng Swee Keat boosted health-care and military spending, gave tax rebates to citizens and tightened rules on foreign workers ahead of an election that could come as early as this year. Heng announced a new $8 billion support package for seniors in his budget speech on Monday, as well as measures to help local businesses adopt new technologies. The expansionary fiscal plan will push the overall budget deficit to 0.7% of gross domestic product in the year ending March 2020, from a revised surplus of 0.4% this year. The finance minister opened....
Read More >>

Sasseur REIT FY18 DPU exceeds IPO forecast by 12.6%

SINGAPORE (Feb 18): The manager of Sasseur REIT announced a 4Q18 DPU of 1.999 cents, 28.1% higher than forecast. This also brings 2H18 DPU to 3.541 cents and FY18 DPU to a total of 5.128 cents. Sasseur REIT offers investors the unique opportunity to invest in the fast-growing retail outlet mall sector in China through its initial portfolio of four quality retail outlet mall assets. 4Q18 distributable income came in at $23.6 million, 28.1% higher than forecast while EMA rental income came in 1.6% higher than forecast at $31.2 million. Based on the Feb 18 closing unit price of $0.71,....
Read More >>

DBS chief sounds cautious note, but expects modest growth this year

SINGAPORE (Feb 18): Looking to the future, DBS CEO Piyush Gupta sounded a cautious note. For one, mortgage bookings have fallen by 30% to 40% since additional cooling measures were announced in July last year, he said. However, loan growth should continue and is likely to come from the corporate sector. See also: DBS reports 8% rise in 4Q earnings to $1.32 bil; brings FY18 earnings to new record high “We guided for mid-single digit loan growth and we are keeping to this loan growth estimate. I anticipate we will still see choppy markets and macro-economic slowdown,” Gupta says. Among....
Read More >>