SINGAPORE (Feb 13): DBS Group Research is maintaining its “buy” with a target price of 80 cents as it remains positive on the group's prospects and see it as a beneficiary of an improved economic outlook with the new Myanmar government.
In a Monday report, lead analyst Rachel Tan says DBS continues to like Yoma Strategic Holdings on the back of an improved operating outlook post the new government in Myanmar.
“We believe the consistent delivery of the group’s real estate sales, coupled with the continued scaling up of its operations for its non-real estate segments, will represent upside to earnings and TP,” says Tan.
In 9M17, Yoma’s net profit was hit by currency translation losses, mitigated by investment gains. 9M17 net profit fell 60% y-o-y to $11 million on net currency translation losses of $4 million, mitigated by 17% y-o-y higher investments gains.
Excluding currency losses, estimated net profit fell 39% y-o-y to $14 million which is 48% of DBS’s FY17 estimates.
During the quarter, Yoma opened four new KFC stores in 3Q17, on track to meet FY17F target, the Landmark development has been approved by Myanmar Investment Commission (MIC), and the government has chosen Yoma to facilitate the purchase of 600 New Holland tractors.
Management remains optimistic on the longer-term outlook for the real estate market in Yangon.
“Looking ahead, the establishment of the framework of the condominium law which promotes and facilitates foreign investment in Myanmar’s real estate market is expected to boost volumes going forward,” says Tan.
As at 11.58am, Yoma shares are up 0.9% at 58 cents.
