SG Budget

SG Budget: Maybank KE expects budget to have no material impact on the stock market. Healthcare - is a marginal winner, with private sector to gain from the enhancement of subsidies in the Community Healthcare Assist Scheme (CHAS) scheme. 3 stocks under MKE coverage should gain as majority of their clinics are CHAS registered. Increase in CPF will be channeled to Medisave account, which will also benefit private healthcare providers. MKE has Top Buys for 2 healthcare stocks: Q&M: TP $0.48. FY14e P/E of 27x should fall to 22x as acquisitions in China propels earnings. China-listed peers at 35x Raffles: TP $3.80. Defensive earnings with organic expansion with estimated capacity growth of 30%. Expansion plans well on track, should help drive mid-term growth. Telco – Under the $500m program, 50% of monthly recurring cost of fiber subscription plan will be subsidized, capped at $120/month for 24 months. Building owners will be subsidized for up to 80% of new in-building fibre broadband infrastructure, capped at $200m/ building. Telcos are expected to gain the most from the both these initiatives, as fiber growth has been slow. Subsidies should accelerate both demand and supply sides of the equation. M1 is MKE’s Top telco Buy with TP $3.86, the biggest beneficiary of tiered data with fastest earnings growth, and potential to improve payout to 100% from 80%, raising yield to 6% at current price.