Looking to rebalance your portfolio as we approach the end of the year?
We look at the top four hidden gems listed on Singapore Exchange that many investors should own, according to the analysts covering the Singapore market.
1. GuocoLeisure Limited (GL)
GL operates a hospitality business where its core hotel business has a portfolio of 17 hotels in the UK (15 owned and 2 managed hotels).
These 17 hotels hold ~4,700 rooms that are sprawled across tourist hotspots in London’s prime districts.
It also holds royalty assets over the Bass Straits, the Clermont Casino as well as 55,000 acres of land in Hawaii.
According to GL’s annual report, GL is on the verge of unlocking value through asset disposal of its casino and Molokai property.
UOB Kay Hian Research (UOBKH) believes that successful disposals of its assets could act as catalysts to reduce the discount facing the company.
Moreover, with GL trading at 0.8x price-book value, it could also lead to privatisation by the Guoco group.
UOBKH: GL Limited (SGX: B16) – BUY; $1.185
2. mm2 Asia Limited (mm2)
mm2 has a strong claim as the leader in the media industry, bolstered by its strong presence in the entire value chain of content creation and distribution,
With the expected completion of the Cathay cinema acquisition at the end of November, mm2 can further enjoy synergistic benefits from the entire value chain.
mm2 managed to produce a strong set of results in its latest quarter, strengthening the confidence and consensus view that mm2 is on track for solid growth ahead.
Its 2Q18 net earnings more than doubled to $4.6 million on the back of a 45.4% year-on-year surge in revenue to $31.4 million.
DBS Research believes that mm2’s EPS is expected to grow at a CAGR of 65% from FY16 to FY19, thanks to growth in productions, expansion into the China market, and contribution from UnUsUaL.
DBS Research: mm2 Asia Limited (SGX: 1B0) – BUY; $0.73
3. Hi-P International Limited (Hi-P)
Following a few consecutive quarters of strong results, Hi-P shows no signs of slowing down.
Earnings momentum will remain strong in 4Q17, on the back of the new products in the Wireless and IoT segments.
Hi-P is in a great position as its Wireless (smartphone) and Computer Peripherals (IoT segment, e.g. smart home) segments contribute more than half of its total earnings.
These segments are expected to do well even in the next one to two years. Hi-P has also recently “guided” for a stronger 4Q17, as compared to 3Q17 and 4Q16.
DBS Research believes that the market currently under-appreciates the potential of the capacity ramp-up, the strong cash-generating capabilities and strong earnings momentum of Hi-P.
DBS Research: Hi-P International Limited (SGX: H17) – BUY; $2.30
4. Best World International Limited (Best World)
While Best World’s sales have been affected in Taiwan, China has been rising as Best World’s key market.
China is expected to deliver healthy future growth for Best World as it seeks to expand geographically to other key Chinese cities.
The application for direct selling license beyond Hangzhou City has already started and should include at least seven provinces by end-2018.
Another key market that Best World is eyeing is the Indonesia market, where it recorded healthy double-digit year-on-year and quarter-on-quarter sales growth in Indonesia in 3Q17.
That came after a switch in strategy from weight management to skin care products.
Maybank Kim Eng Research (MBKE) thinks Indonesia might transform into a key growth market for Best World as it taps into the Halal market in 2019, after the opening of its factory.
MBKE: Best World International Limited (SGX: CGN) – BUY; $1.88