SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.</strong>&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
<p>Company Note</p>
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<h2>Overseas Education Ltd</h2>
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<h3>Students not coming in; downgrade to Hold</h3>
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<li>We expect OEL’s student enrolment to decline to 2,400 in AY20/21 and 2,300 in AY21/22 on job market weakness and recent restrictions on foreign hiring.</li>
<li>While 1H20 core net profit rose 51.2% yoy due to lower opex, we project a weaker 2HF on lower topline, mitigated by some savings in personnel costs.</li>
<li>Downgrade to Hold with S$0.26 TP and c.10% yield. We think the lacklustre earnings outlook is priced in at 16x FY21F P/E (1 s.d. below historical mean).</li>
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<p><strong>Expect lower enrolment numbers for AY20/21 and AY21/22<br></strong>Singapore’s unemployment rate spiked to 2.9% in 2Q20 with retrenchments doubling qoq to 6,700. The soft labour market, coupled with recent tightening of foreign work pass policies and border restrictions, is likely to make it tougher for new expats to enter Singapore, and convert earlier enquiries into enrolment at OEL. Other international schools like Singapore American School and Global Indian International also reported a slowdown in physical enrolment with more severe impact expected in 2021 (source: The Business Times). According to relocation specialist SIRVA, relocation inquiries to Singapore fell 23% yoy in 7M20.</p>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.
Company Note




Overseas Education Ltd




Students not coming in; downgrade to Hold






We expect OEL’s student enrolment to decline to 2,400 in AY20/21 and 2,300 in AY21/22 on job market weakness and recent restrictions on foreign hiring.
While 1H20 core net profit rose 51.2% yoy due to lower opex, we project a weaker 2HF on lower topline, mitigated by some savings in personnel costs.
Downgrade to Hold with S$0.26 TP and c.10% yield. We think the lacklustre earnings outlook is priced in at 16x FY21F P/E (1 s.d. below historical mean).







Expect lower enrolment numbers for AY20/21 and AY21/22 Singapore’s unemployment rate spiked to 2.9% in 2Q20 with retrenchments doubling qoq to 6,700. The soft labour market, coupled with recent tightening of foreign work pass policies and border restrictions, is likely to make it tougher for new expats to enter Singapore, and convert earlier enquiries into enrolment at OEL. Other international schools like Singapore American School and Global Indian International also reported a slowdown in physical enrolment with more severe impact expected in 2021 (source: The Business Times). According to relocation specialist SIRVA, relocation inquiries to Singapore fell 23% yoy in 7M20.




















Non-SGX Report: Overseas Education Ltd: Students Not Coming In; Downgrade to Hold

Singapore

OEL (Holdings) Limited operates as a holding company. The Company, through its subsidiaries, provides medical services and children's health education. OEL (Holdings) serves health care industry in Singapore.

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Oel Holdings (OELH SP)

Non-SGX Report: Overseas Education Ltd: Students Not Coming In; Downgrade to Hold

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

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