BreadTalk
Price – $1.94
Target – $2.00

BreadTalk is back in its expansion phase after several years of major rationalisation exercises. Ever since the appointment of Henry Chu as the new CEO last July, the group has signed partnerships with Song Fa Holdings, Shinmei Co Ltd and Wu Pao Chun Bakery. According to management, these new ventures have the potential to earn high-margins and we are positive on BreadTalk’s medium-term prospects with net margin rising significantly from current 3% over the next 5 years. However, increasing start-up costs and overhead expenses are also limiting the upside in earnings growth as the number of new store openings ramped up this year. Given that the share price has surged 14.1% and outperformed the FTSE Straits Times Index by 10.9%, we believe that the higher dividends and potential earnings growth has been factored in. As such, present moment may be an opportunity to take profit to accumulate at lower levels. Recommend TAKE PROFIT. RHB Research (19 Mar)

Singapore Post
Price – $1.37
Target – $1.60

Singapore Post (SingPost) has been consistently having share buybacks since beginning of the year and acquired 2.6m shares (1.1% of the group’s share capital) at $1.24 – $1.41 per share to-date. At the last closing price, investors could purchase SingPost below Alibaba’s average cost of $1.52 a share for its 14.5% stake in SingPost. 9M18 results indicated improvement in SingPost’s key segments including postal and e-commerce, as well as resumption in contribution from newly revamped SingPost Centre retail mall. Going forward, we expect SingPost’s free cash flow yield to rise to 6 – 7% in FY19 – 20 believing that capital expenditure (capex) has peaked with estimated future maintenance capex at $60m – $70m per year. With a better outlook underpinned by growing e-commerce cross-border volume, we think that share price could play catch-up with the FSSTI’s ascent. Maintain BUY. UOB-Kay Hian (16 Mar)

Yangzijiang Shipbuilding (Holdings)
Price – $1.34
Target – $1.34

The shipbuilding industry has been undergoing tough times due to overcapacity, but the cruise ship and the defence segments remained the bright spots where state-owned yards were able to find work in. Yangjijiang Shipbuilding (YZJ) has been focusing on building containerships and dry bulkers with its order book of 123 vessels comprising 44 containerships, 76 bulk carriers and three oil tankers. Following the successful delivery of two 27,500 CBM LNG carriers last year, we see LNG as a segment where YZJ can seek growth since it may be difficult to penetrate the luxury cruise and defence segments. Meanwhile, YZJ started building an investment arm years ago which contributed 32% to the group’s gross profit in FY17. In consideration that the group’s profitability will be affected by trends in the USD/RMB and steel costs, we trimmed our fair value estimate to $1.34. Maintain HOLD. OCBC Investment (16 Mar)

Jumbo Group
Price – $0.55
Target – $0.70

Jumbo Group (Jumbo) has entered into a 49% joint venture (JV) with Tsui Wah to set up a HK-style “Cha Chann Teng” in Singapore. The brand is highly regarded in Hong Kong (HK) and China which currently operates 32 outlets in HK, 35 outlets in China and 3 outlets in Macau. We view this JV as long-term positive because it allows Jumbo to tap into the growth potential of an established brand and leverage on its own existing network in Singapore. Nonetheless, near-term start-up costs are expected to escalate to account for higher staff training, rental and marketing costs. Pursuant to the signing of a franchise agreement of 10 years for the right to use the “Tsui Wah” brand name in Singapore, the JV will open its first outlet in mid-2018 before planning on further expansion. As such the new restaurant is only expected to contribute to revenue around 4Q18. Maintain BUY. Maybank Kim Eng (11 Mar)