Brokers' take

Compiled by Stephanie Luo

MIDAS HOLDINGS | HOLD

TARGET PRICE: $0.225

AUG 16 CLOSE: $0.21

OCBC Investment Research, Aug 16

Midas Holdings Limited's Q2 17 revenue jumped 32.1 per cent year-on-year to 505.6 million yuan (S$103.3 million), mainly due to the consolidation of results of its recently acquired business and higher business volume at its core business.

Coupled with a 43.5 per cent year-on-year decline in income tax and improvement in margins, Q2 17 Patmi surged 197.1 per cent to 55.5 million yuan.

For H1 17, Patmi jumped 193.8 per cent year-on-year to 84.3 million yuan, forming 79.3 per cent of our FY17 forecast.

Looking ahead, we expect core business to pick up on higher orders but forecast overall gross profit margin to fall to around 28 per cent to 29 per cent with full-year contributions from its aluminium alloy stretched plates business.

SINGAPORE MEDICAL GROUP | BUY

TARGET PRICE: $0.79

AUG 16 CLOSE: $0.63

RHB, Aug 16

Management has revealed that it is keen to scale up the paediatrics segment.

This comes after its recent acquisition of the paediatric clinics in Toa Payoh and Bishan, which has propelled it to be one of the largest practitioners in the private sector dedicated to women's health and wellness and now, children.

It would likely add more paediatricians organically and set up new clinics to fuel growth in this segment.

It remains bullish on Vietnam and has hired a paediatrics leader to spearhead growth initiatives at its Careplus clinics in Vietnam.

We expect a stronger H2 17, mainly due to a seasonally stronger H2, as well as the full earnings accretion from its Astra Women's Specialist group of clinics and paediatric acquisitions.

BEST WORLD INTERNATIONAL | BUY

TARGET PRICE: $1.80

AUG 16 CLOSE: $1.34

CIMB, Aug 15

China's crackdown on pyramid schemes has minimal effect on Best World as its direct-selling model is unlike a pyramid scheme, according to its management.

Its Chinese revenues are on an "export" business model and hence unlikely to be affected by the campaign.

In a worst-case scenario, we envisage a delay in the conversion of its China business into a direct-selling model, initially targeted to happen by year end or early next year. That said, Best World is enjoying higher gross profit margins under its existing export model.

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