Brokers' take

Midas Holdings | HOLD Target price: S$0.225 Aug 16 close: S$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 (profit after tax and minority interests) 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 GPM (gross profit margin) to fall to around 28-29 per cent with full-year contributions from its Aluminium Alloy Stretched Plates business.

Singapore Medical Group | BUY Target price: S$0.79 Aug 16 close: S$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. Singapore Medical Group remains bullish on Vietnam. Management 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: S$1.80 Aug 16 close: S$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 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 end-2017/early 2018. That said, Best World is enjoying higher GP (gross profit) margins under its existing export model.

Compiled by Stephanie Luo

Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.