Singapore Market Focus SMC Monthly Refer to important disclosures at the end of this report Issue No. 1 DBS Group Research . Equity 11 Jan 2016 STI : 2,751.23 Blooms amidst the gloom FSST Small Cap : 397.54 FSST - Mid Cap : 650.02 Small-cap names can often shine despite uncertainty and malaise in the broader market. We begin 2016 with the following conviction picks under the following themes: Analyst Growth – MM2, Riverstone and Sheng Siong Paul YONG CFA +65 6682 3712
[email protected] Yield – China Merchants Holdings (Pacific) Singapore Research Team Recovery – Japfa Five conviction picks to kick off 2016. Generally, our Key Indices five conviction picks have drivers and catalysts that Current % Chng should help them outperform the market. For mm2 Asia STI Index 2,804.27 -1.1% (BUY, TP S$1.05), earnings should be boosted by growth FS Small Cap Index 403.16 -0.5% USD/SGD Curncy 1.41 -1.8% in local productions as well as its expansion into the Daily Volume (m) 1,361 China market. Riverstone (BUY, TP S$2.83) should Daily Turnover (S$m) 994 benefit from an enlarged capacity as well as a strong Daily Turnover (US$m) 705 USD vs Ringgit, while Sheng Siong (BUY TP S$1.01) is Source: Bloomberg Finance L.P. looking to see both store growth and margin expansion. A rebound in day-old-chick prices should help Japfa’s (BUY TP S$0.90) earnings to recover, and lastly, CM Pacific (BUY TP S$1.45) offers a highly attractive dividend yield of over 8%, with long-term earnings bolstered by SMC Top Picks recently acquired toll roads in China.