19 Aug 2013~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day : Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.
- ALEXIS DE TOCQUEVILLE
Singapore: The Day AheadSINGAPORE DAYBOOK : Revamp for MediShield to include all Singaporeans - for life. MediShield Life premiums 'will be higher' due to better benefits, coverage. [SINGAPORE] Sweeping changes are in the pipeline for MediShield, the national medical insurance plan that currently covers some 92 per cent of Singaporeans.
The scheme - introduced back in 1990 - will be revamped into a universal one known as MediShield Life, which will cover people for life instead of stopping at the current maximum age limit of 90 years.
The opt-out option will be no more and, critically, the new scheme will include the elderly and those saddled with pre-existing illnesses.
Outlining the policy change in his annual National Day Rally speech last night, Prime Minister Lee Hsien Loong explained that premiums for MediShield Life "will be higher" due to the better benefits and coverage.
"They have to. (The scheme) has to break even," he said.
He did not elaborate on the exact amount, but added that the Health Ministry will be conducting a public consultation exercise to gather views before deciding on the exact details of the scheme.
Still, Mr Lee gave the assurance that the government will subsidise the premiums for those who could not afford them.
Describing the shift to MediShield Life as a "major change", Mr Lee stressed that the revamped scheme will give better protection for "very large bills", meaning that patients will fork out less from their own pockets or from their Medisave when settling their bills.
Big hospital bills remain a "major worry" for people here, though Mr Lee said that there were very few such cases given that the vast majority of people are already on MediShield.
"But people still worry, especially those who don't have MediShield cover. They will find it harder and more expensive to get insurance if they are elderly or have pre-existing illnesses," said the prime minister.
Paying tribute to Singapore's pioneer generation who worked hard in the country's early years and are now mostly retired and in their late 60s or older, Mr Lee said they will benefit from a new Pioneer Generation Package to help pay for their MediShield Life premiums.
Separately, Mr Lee announced that the minimum qualifying age of 40 years for the government's Community Health Assist Scheme (Chas) will be scrapped in order to get more younger Singaporeans on board.
Chas is one of the Health Ministry's programmes to help provide accessible and affordable medical and dental care to Singaporeans.
Under the existing criteria, one must also have a per capita household monthly income of $1,500 or less, or if the annual value of their home is $13,000 and below for households with no income.
For those with more serious conditions and have to visit specialist outpatient clinics, Mr Lee said that the current subsidy level for lower- and middle-income patients - which stands at 50 per cent - will be increased. Means-testing will be used to determine who qualifies for the higher subsidies.
With all these changes in store, Mr Lee said that, because the state will be spending more on healthcare every year and giving out more subsidies, it is inevitable that Medisave contribution rates will go up in future.
"We will increase contribution rates over time, as and when our economic conditions permit. How much? We have to discuss carefully. We need to save more to stand us in good stead, because we will all grow old," said Mr Lee.
And, noting the growing number of requests by the public to use their Medisave for outpatient treatment, he said: "In principle, this is sound. We want to move in this direction. We've already taken some steps there."
He noted how people can already use their Medisave for treatment such as chemotherapy, but hinted that there was scope to do more.
"I think we can extend this further, especially for older people. We will need to study carefully how to do this," added Mr Lee. (Source: The Business Times)
MARKET SCOOP
Paya Lebar Airbase to shift to Changi
PSLE: Wider bands instead of aggregate score
New MediShield Life scheme to cover S'poreans for life
Govt to make HDB flats more affordable (Source: The Business Times) NOMURA Securities says...
BIOSENSORS INTERNATIONAL | BUY | TP: S$1.70
The recent share price pullback is a buying opportunity as the current share price is comparable to the S$0.888 per share that Hony Capital paid to acquire its strategic stake in Biosensors back in Oct 2010
In spite of the 11% drop in group revenues in 1Q14, Biosensors maintains revenue growth guidance of 15%, implying strong revenue recovery for the rest of the year
The shares look oversold and we reiterate our Buy rating
Although Biosensors dropped sales in China due to the inventory drawdown across its distribution channels, sales are likely to recover as its distributors replenish their stock
Management believes recovery is in sight for its licensing revenues from Japan as it increases marketing and sales efforts with greater collaboration with Terumo
Earnings recovery from 2Q14 will allay concerns about weakness in its China and Japan businesses while newly acquired Spectrum Dynamics will add to revenues
Continued strength from its DES business in APAC and EEMEA will also underpin sentiment
We trim our earnings by 15% for FY14F and 9% for FY15-16F to reflect the weak 1Q14 results and lower group margins
On our new forecasts, the group is trading at a PE of 12X FY14 and price book of 0.9X
We trim our price target to S$1.70 on lower valuation for its China business
DMG OSK Securities says ...
JAYA HOLDINGS | NEUTRAL | TP: S$0.61
Jaya's FY13 results surprised owing to USD17.6m in net one-offs, excluding which its core earnings of USD28.4m were in line, just 3% shy of our prior USD29.3m forecast
4QFY13 was a bumper quarter, with fleet utilisation at a record 91% while charter revenue came in at USD29.8m and gross margin at 40%
The USD24.7m in pretax income can be split into USD17.2m from one-off gains and losses, and core earnings of USD7.5m
The 3.5 cent dividend is a positive, but we see a direct parallel in Vard Holdings (VARD SP; BUY; TP SGD1.10), which had paid out a higher than normal dividend when its major shareholder was looking to exit the company
To be fair, this dividend should be sustained by Jaya's recurring earnings, although the payout ratio appears high
The disposals of the Jaya Scout and Jaya Pioneer surprised us as both were profitable, with the latter being the fleet's crown jewel
Their sale boosted Jaya's 4Q13 profit but at the expense of recurring income for FY14F and beyond
There has been more vessel delivery delays since our 16 May report, Delays In Vessel Deliveries Hurt Future Growth
This prompts us to lower our FY14F/15F forecasts by 3%/17% respectively
Jaya has fallen by 14% since we initiated coverage three months ago, and its FY13 results are a mix of good and bad news
We think its valuations can be supported by its high yield, but significant growth is still elusive
Upgrade to NEUTRAL, with a TP of SGD0.61, as we roll over to 9.5x FY14F EPS
OCBC Securities says...
MIDAS HOLDINGS | BUY | TP: S$0.65
Midas Holdings' 2Q13 results came in above our expectations, with revenue and PATMI soaring 29.2% and 834.1% YoY to CNY284.0m and CNY14.9m, respectively
Midas started to supply aluminium alloy extrusion profiles for freight wagons to its existing customers (previously focused on passenger train cars)
This helped to boost its topline growth, although gross margin dipped 9.0ppt YoY to 22.5% due to lower margins for freight wagons
The spike in earnings was largely due to a turnaround from its associated company, Nanjing SR Puzhen Rail Transport (NPRT), which contributed a share of profit of CNY3.1m in 2Q13 as compared to a hefty CNY14.1m share of loss in 2Q12
While we note that profit from operations actually fell 15.2% YoY to CNY35.9m, it was still ahead of our forecast
For 1H13, revenue grew 8.0% to CNY486.4m, while PATMI fell 40.8% to CNY10.0m due to a net loss in 1Q13
This constituted 53.4% and 28.6% of our FY13 projections, respectively
We are expecting 2H13 PATMI to improve significantly on a HoH basis
An interim DPS of 0.25 S cents was declared, similar to 1H12 and our forecast
As at 30 Jun 2013, the order book for Midas and NPRT stood at CNY700m and CNY9b, respectively
Positive industry news flow raises optimism China Railway Corporation (CRC) recently increased its railway fixed assets investment target by CNY10b to CNY660b in 2013, of which ~CNY530b is expected to be spent on railway infrastructure and the balance on rolling stock procurement
There are expectations that new high-speed train tenders may be resumed soon by CRC, and we understand that the major train manufacturers (customers of Midas) have already been making preparations in anticipation of this
Increase valuation peg and reiterate BUY
We raise our FY13 revenue and PATMI forecasts by 12.6% and 16.0%, respectively
Our FY14 estimates are unchanged
Ascribing a higher P/B target peg of 1.3x (equivalent to its 5-year average forward P/B) due to a more positive industry outlook and rolling forward our valuations to blended FY13/14F BVPS, we raise our fair value estimate on Midas from S$0.54 to S$0.65 |
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