Brokers' Digest 7 May 18

DBS Group Holdings (May 2: $30.61)
- Maintain neutral.  1Q 2018 net profit stood at $1.51 billion, which was up 27% q-o-q and 21%
y-o-y.
- We lift our 2018F net profit by 6% to $5.67 billion, mainly on a higher NIM assumption.  We raise our 2018F net interest income growth to 8.7%, from 7.6% previously.  This factors in 2018F loan growth of 8%
- We raise our Gordon growth model-derived price target to $29.60 (from $27, a 4% downside) as we increase our ROE assumption to 12.9% (from 12.7%)

iFAST Corp (May 2: 90 cents)
- Maintain Buy.  iFAST has made significant progress in the last two to three years by broadening the range of investment products and services on its platforms and laying the infrastructure to kick-start its business in China, a market it believes will be key in the future
- Improved revenue and profitability in 1Q2018, mainly owning to an increase in AUA for both B2B business and B2C business in the period, which benefited from new inflow of investments from customers as well as relatively positive market sentiment in the period
- Price target of $1.26 based on the dividend discount model (DDM) valuation methodology, given that it is a cash led business, supplemented by a relatively high dividend payout ratio of about 60%

Manulife US REIT (May 2: 94 US cents)
- Maintain Buy.   Manulife US REIT reported 1Q2018 distributable income of $15.6 million, exceeding our forecast of $15.3 million
- We raise our price target to US$1.02 marginally as we revise the 2018/2019/2020F DPU upwards to 6.1/6.9/7.7 US cents. 
- As highlighted in our April 17 report, we continue to wait for further clarity on the final decision regarding the financing mix of Penn and Phipps, as well as the actual impact on DPU.

Mapletree Logistics Trust (May 2: $1.28)
- Maintain Buy.  Mapletree Logistics Trust (MLT) reported its 4QFY2018 results, which met our expectations, with DPU growing 4.1% y-o-y to 1.937 cents.
- We fine tune our assumptions and now factor in a lower distributions from the divestment gains from 7 Tai Seng Drive.  Our fair value inches down from $1.48 to $1.44

Raffles Medical Group (May 2: $1.16)
- Maintain Buy.  Raffles Medical Group's (RMG) 1Q2018 scorecard was within ours and the street's expectations
- In our opinion, the lower y-o-y projected Patmi levels for FY2018 and FY2019, resulting largely from the expected start-up losses, should have been well-digested by the street as this has been guided by management for a few quarters now.  We maintain our assumptions and fair value estimate of $1.26

SPH REIT (May 2: 99 cents)
- Maintain Hold.  SPH REIT has announced that it has purchased The Rail Mall, its maiden acquisitions post-listing. 
- Given the low debt funding cost, the deal is anticipated to be accretive to the bottom line. 
- We raise our FY2019-FY2020F DPU estimates by about 1% to account for the new contributions from this purchase.  DDM-based price target is raised slightly to $1.07.  SPH REIT offers investors 5.6% to 5.8% FY2018-FY2019 dividend yield

Tianjin Zhongxin Pharmaceutical Group Corp (May 2: US$1.04)
- Maintain Buy.  Outperforming our expectations, Tianjin Zhongxin Pharmaceutical Group's 1Q2018 profit represents 31.8% of our estimate on a normalized basis.
- We tweak our 2018-2020 net profit attributable to shareholders to RMB589.3 million (+3.5%), RMB696.6 million (+3.9%) and RMB748.5 million (+4.5%), respectively.  PER-based price target of US$1.72 (RMB6.29/US$), pegged to peers' average of 14.1 x 2018F PER.

Tuan Sing Holdings (May 2: 42 cents)
- Maintain Buy.  For 1Q2018, Tuan Sing Holdings' (TSH) results were above our expectations as the $8.2 million (+55.6% y-o-y) profit included a $3.5 million gain on disposal.
- Unchanged sum-of-the-parts-based price target of 71 cents, implying a 65.1% upside.  At current prices, TSH is trading at fire-sale levels of 51.4% of book value

Valuetronics Holdings (May 2: 78.5 cents)
- Maintain Buy.  Valuetronics' share price has slumped 25% since its Dutch MNC customer reported a 1Q2018 earnings miss, owing to weak sales at its home lighting division.
- We believe the recent share price correction presents a good buying opportunity at an attractive FY2018F yield of 6.6%, as we believe the recent selling is overdone.  We lower our price target to 96 cents, assuming a lower FY2019F PER of 10x (from 11x), owing to the weaker sentiment globally for the electronics and semi-conductor sector

(Source:  TheEdgeSingapore May 7 2018)

Brokers' Digest April 23 2018

CSE Global (April 18: 42.5 cents)

• Maintain Hold.  New major shareholder Serba Dinamik (SDH) heralds new contract opportunities, but more details are needed for further earnings rerating
• SDH’s main presence is in Malaysia and the MiddleEast and it provides engineering solutions mainly to downstream oil and gas and power generation industries
• We lift our price target to 44 cents, now based on 13.5x CY2019F PER versus 12x previously

Keppel DC REIT (April 18: $1.43)

• Maintain Hold.  Keppel DC REIT (KDCREIT) reported its 1Q2018 results, which met our expectations.
• Given limited debt headroom, coupled with its end-2018 asset under management target of $2 billion and long-term aggregate leverage target of 30%, we believe there are potential dilution risks in the near future
• We do not find current valuations appealing, with a FY2018F distribution yield of 5.3% and P/BV ratio of 1.5x, as at closing price of $1.46 on April 16
• Fair value estimate of $1.50

Keppel Infrastructure Trust (April 18: 54.5 cents)

• Maintain Buy.  Keppel Infrastructure Trust (KIT) maintained its record of steady DPU of 0.93 cent in 1Q2018, as expected
• Share price dampened, owing to negative news flow from the Basslink asset.  We believe KIT is sufficiently ring-fenced from possible legal penalties at Basslink
• Based on our dividend discount model-based valuation methodology, we derive a valuation of 60 cents for KIT

Kimly (April 18: 34.5 cents)

• Buy (initiating coverage).  Kimly operates and manages coffee shops and food courts locally, which have a defensive nature accompanied by rich cash flows
• Management intends to declare an annual dividend of not less than 50% of net profits attributable to shareholders as dividends, which suggests a yield of 2.9% for FY2018F
• We think that the new outlets it invested in during 2017 and coming up in 2018 are likely to be profitable in 2019-2020
• DCF- derived price target of 43 cents

Lippo Malls Indonesia Retail Trust (April 18: 33 cents)

• Downgrade to Sell.  Lippo Malls Indonesia Retail Trust (LMIRT) announced that Indonesia has passed new tax regulations on income received/earned from land and building leases in the country, which is effective from Jan 2
• Assuming the new regulations were in effect as at Jan 1, 2017 instead, the REIT manager calculates that FY2017 DPU would have been 7.2% lower at 3.19 cents
• We believe the multiple challenges that have come to light will continue to plague the REIT’s operations, despite respectable efforts on the part of management
• Our fair value decreases 23.5%, from 40.5 cents to 31 cents

M1 (April 18: $1.78)

• Maintain Hold.  M1’s 1Q2018 revenue rose 0.5% y-o-y to $254.1 million, driven mainly by fixed services and mobile postpaid revenues, but partly offset by weaker handset sales and international call services
• Over the medium to longer term, we do expect M1 to scale up its ICT capabilities and solutions to capture opportunities relating to IoT and Smart Nation initiatives.
• We keep our forecasts and fair value estimate of $1.70

Manulife US REIT ( April 18: 92.5 US cents)

• Maintain Buy. Manulife US REIT  announced the acquisition of 1750 Pennsylvania Avenue (Penn) in Washington DC and Phipps Tower (Phipps) in Atlanta for an aggregate purchase cost of US$387 million
• The net property income (NPI) yields for the acquisitions of Penn and Phipps are 5.2% and 5.9% respectively
• While we note that there is some concern o the REIT’s rapid pace of acquisition led growth, we believe that acquisitions have not compromised unitholders’ interests and would ultimately benefit them
• Price target revised to US$1 (98 US cents previously)

SATS (April 18: $5.45)

• Maintain Buy.  SATS and Capital Airports Holding will inject a US$28 million equity in Beijing Aviation Ground Services (BGS),  but the shareholding structure is inequitable
• SATS is very likely to book unrecognised losses of $7 million to $9 million from BGS in FY2019, arising from the increased investment. 
• We lower our FY2019 net profit estimate by 4.4% after factoring in lower associate earnings arising from the $8 million loss assumption
• Our price target is consequently lowered to $5.80

Soildbuild Business Space REIT (April 18: 65.5 cents)

• Maintain Hold.  Gross revenues for 1Q2018 stood at $19.4 million, representing a y-o-y decline of $2.5 million (or 11.5%)
• We estimate revenue impact from the divestment of KTL Offshore to be about $2 million for FY2018F.  For 1Q2018, distributable income of $14 million was 10.4% lower versus 1Q2017’s
• Occupancy fell lower to 87.5%, outlook remains challenged
• Price target of 62 cents

(Source:  TheEdgeSingapore April 23 2018)

Brokers' Digest April 16 2018

AEM Holdings (April 11: $6.29)

•          Maintain ADD.  As at April 1, AEM said its sales orders received for delivery in FY2018 increased to $192 million.  This represent a rise of 67% over the last sales order update of $115 million on Feb 1, and a 30% incrase over the sales order of $148 million received on April 1, 2017 for delivery in FY2017
•           AEM highlighted that sales could seasonally peak in 2QFY2018 and 3QFY2018
•           Price target of $8.19, based on 10x (15.3% discount to sector average) FY2019F EPS

Cromwell European Real Estate Investment Trust (April 11: €0.60)

•          Buy (initiating coverage).  With an improving European economy, CERT is well positioned to benefit from an uplift in rents.  In addition, with European property yield spreads being above the historical 10-year average, CERT is poised to gain from increases in property values
•           While there is a lack of familiarity with CPG by some investors, we believe well-known real estate fund manager ARA Asset Management’s taking a 19.5% interest in CPG should give investors confidence in CPG’s execution capability
•           DCF based price target of €0.63

Frasers Commercial Trust (April 11: $1.44)

•          Upgrade to Buy.   While Grade-A CBD Core landlords in Singapore are the immediate beneficiaries from the broader office recovery, we believe that their Grade-B CBD Core peers should also enjoy some upside, albeit belatedly
•           Separately, we believe FCOT’s FY2018F yield of 7% is still quite a distance away from the 5.5% yield seen during the start of the last rental recovery cycle in 1HFY2013
•           Fair value estimate of $1.51

Genting Singapore (April 11: $1.13)

•           Maintain Buy.  Since Genting Singapore reported 4QFY2017 Ebita fell 20% q-o-q, its share price has tumbled 14%
•           Currently, Genting Singaporeis tarding at only 9x FY2018 enterprise value/Ebitda or -1 standard deviation to the 12-month forward EV/Ebitda mean.  The last time the sotck traded at these valuations was when the company suffered larget derivative losses, foreign-exchange losses and impairments of trade receivables
•           Unchanged price target of $1.46, based on 12x FY2018 EV/Ebitda

Moya Holdings Asia (April 11: 9.9 cents)

•           Maintain Buy.  Moya’s founding shareholder, Moya Holding, sold out its stake.  First, it did so to its majority shareholder, Tamaris Infrastructure, on Jan 25 at 10 cents a share.  It followed with sale to Gateway Partners on April 6 at 11 cents a share or a 10% permium
•           With further cost savings, volume expansion and the recovery of its non-revenue water providing strong organic growth and possibly additional acquisitions in the pipeline to further boost its earnings we think the outlook is bright for Moya
•           Unchanged price target of 15 cents

Perennial Real Estate Holdings (April 11: 86 cents)

•           Buy.  PREH has announced that that group has entered into a 40:60 joint venture with Qingjian Group to develop a freehold residential site of up to 720 units, with a gross development value of up to $1 billion
•           While Qingjian can be seen as sharing the project risk with PERH, we do note that the consortium has placed two bids for the Holland Village Government Land Sales site.  If awarded, it will add significant exposure to the Singapore property market
•           Price target of $1.05 (23% upside)

SPH REIT (April 11: 98.6 cents)

•           Hold.  Our forecasts are unchanged for SPH REIT, following 2QFY2018 results that were in line with our expectations and consensus
•           We estiamate a potential Seletar Mall acquisition adds 10% to 12% to FY2018DPU, assuming the purchase of a 100% stake that is fully debt-funded, given its low gearing of 25.4%
•           SPH REIT is looking to firm up strong local partnerships in Australia as it focuses on overseas diversification
•           Dividend discount model-based price target of $1

StarHub (April 11: $2.29)

•           Upgarde to Hold.  Starhub adopted the new revenue recognition standard Singapore Financial Reporting System (I) 15 effective from Jan 1, with full retrospective approach for active contracts from January 2017
•           Having corrected about 20% YTD (April 9, 2018 close), Starhub’s share price in the near term will be supported by a decent 7% forward yield
•           Unchanged fair value of $2.20

Wilmar International (April 11: $3.18)

•           Maintain Buy.  China has retaliated against the US imposition of tariffs on its exports, by imposing 25% tariff on soybeans imported from the US.  If the tariff takes effect, the long-term impact on Wilmar will be negative-to-neutral
•           Price target of $3.45 (12% upside) on Wilmar, as the group may see some short-term upside with the decline in soybean future prices

(Source:  TheEdgeSingapore, April 16 2018)

Brokers' Digest April 9 2018

 CapitaLand Retail China Trust (April 3: $1.57)

•         Upgrade to Buy.   As at the closing price on March 27, CRCT is trading at a 6.8% FY 2018F yield.
•           Going forward we expect retail sales growth in China to remain healthy for both online and offline stores
•           We have kept our forecasts for CRCT largely intact and our fair value remains at $1.66

ComfortDelgro Group (April 3: $2.05)

•           Maintain Buy.  Grab announced that it had acquired Uber’s Southeast Asia operations and Uber will take a 27.5% stake in Grab.
•           We are keeping our earnings forecasts for now, as the situation remains fluid and we had not factored in the potential upside from the proposed ComfortDelgro and Uber alliance
•           Our price target of $2.25 is based on a long-term 10 year PER average of 16.6 x

Dairy Farm Int’l Holdings (April 3: US$8.13)

•           Maintain Buy.  We turn more positive on DFI’s recent deal with Robinson’s Retail Holdings (RRHI) to spin off Rustan Supercenter for an 18% stake in RRHI.
•           We see earnings turnaround going forward, as a stock catalyst and swapping Rustan for RRHI shares are part of this process.
•           Our price target of US$9.77 is derived from the sum-of-the-parts valuation methodology

M1 (April 3: $1.74)

•           Upgrade to Hold.  Following TPG’s teaser announcement on March 19 to offer free SIMs, unlimited voice and 3GB/month data for senior citizens for 24 months, the Singapore focused M1 share price has de-rated by 2% and has underperformed the Straits Times Index (STI) by 25% on a 12 month basis
•           We assume M1’s wireless service revenues will decrease by a 3% compound annual growth rate over 2017-2020E.
•           Price target of $1.63

Mapletree Greater China Commercial Trust (April 3: $1.16)

•           Upgrade to Add.  MAGIC announced it is acquiring a 98.47% stake in a portfolio of six Japan commercial properties from MFOJ, a private real estate fund managed by its sponsor
•           We tweak our FY2019-2020F DPU estimates up by 0.4% to 2% to include the new contributions
•           Our dividend discount model-based price target is lifted to $1.30, with the additional income and a change in our blended cost of equity to 8.5% (from 8.9% previously)

Sembcorp Marine (April 3: $2.20)

•           Maintain Buy.  Sembcorp Marine has announced that it has secured the engineering, procurement and construction contract for the hull and living quarters of a new build floating production, storage and offloading vessel from Energean’s engineering, procurement, construction, installation and commissioning contractor – Technip FMC
•           We believe the order flow could be stronger than expected, given the robust pipeline
•           Price target of $2.90, based on 2.4x FY2018 P/BV

Sheng Siong Group (April 3: 94.5 cents)

•           Buy.  Excessive concerns about e-commerce disruptions led to Sheng Siong Group’s (SSG) 12 month underperformance of 10% against the STI
•           We expect 4% y-o-y revenue growth for FY2018E.  We resume coverage with a “buy” rating, expecting catalysts from: (1) further improvements in consumer spending, (2) SSG’s further market share wins from convenience stores and traditional market grocers (3) a potential surge in new stores in 2018 and (4) continued good sets of results, supporting high ROEs and dividends
•           Our DCF price target is $1.20

Tianjin Zhongxin Pharmaceutical Group (April 3: 99.5 US cents)

•           Buoyed by strong margin expansion, TJZX 4Q2017 Patmi surged 63.7% y-o-y to RMB118.2 million, bringing full year Patmi to RMB473.3 million, which is a 4.5% above our forecast
•           We tweak our 2018-2019 attributable net profit to RMB569.4 million and RBM670.6 million, respectively
•           Price target of US$1.66, pegged to peers’ average of 14.1x2018F PER and based on an exchange rate of RMB6.29 per US$

Y Ventures Group (April 3: 57.5 cents)

•           Buy (initiating coverage). Y Ventures Group distributes products from third party brands over some of the largest e-commerce platforms across 10 countries
•           YVEN stands out for its provision of value-added data analytics service to brand partners, allowing them to adapt their products to the market needs.
•           Ebita projected to grow at 92% CAGR over FY2018F-FY2020F.  Price target of 77 cents, based on 20x FY2019F enterprise value (EV)/Ebitda, at a 15% discount to larger peers’ 23x, owing to YVEN’s smaller scale.

(Source:  TheEdgeSingapore April 9 2018)

Broker's Digest 19 Mar 2018

City Developments (March 13: $13.52)

- Maintain Buy.  City Developments is the developer with the largest amount of unsold inventory on the books

- The strong pre-sales of the upcoming launch - The Tapestry - will be a catalyst for further re-rating.

- Price target of $15.40, based on a parity to revised net asset value (RNAV), which implies 1.2x P/NAV

Dairy Farm Int'l Holdings (March 13: US$8)

- Downgrade to Hold.  CY2017 sales grew by a merger 0.8%, while core earnings before interest and taxes narrowed by 3.9% y-o-y

- The main culprits for the lower revenue and Ebit were the Southeast Asia supermarket and hypermarket businesses.

- We cut our FY2018/FY2019F EPS by 5.9%.0.8% to reflect slower sales growth and lower margins.  We also introduce our FY2020F forecasts.

- A lower price target of US$8.40 (from US$9.18) on a lower PER of 21x (from 23.7x)

Jubilee Industries Holdings (March 13: 4.2 cents)

- Add (initiating coverage).  Jubilee is set to swing back into full-year positive net profit after two years of net losses post-restructuring, based on our estimates.

-Overall gross margin improved to 6.4% in 1HFY2018 from 4% in 2HFY2017 as a result of leaner manufacturing and better product mix with higher margin and commission

- Our price target of 5.1 cents is derived from sum-of-the-parts valuation

Netlink NBN Trust (March 13: 82 cents)

- Buy (initiating coverage).  With the increasing usage of fibre broadband services for day-to-day activities, driven by growing demand for connectivity and rapid broad-based growth in data consumption, we believe NLT BNN has a resilient business model

- All considered, given its stable earnings outlook coupled with policy to distribute 100% of its cash available for distribution, we value NLT NBN based on a dividend discount model.  Fair value estimate of 91 cents

Keppel Corp (March 13: $7.90)

- Buy.  Following the letter of intent signed at end-February, Keppel has firmed up the contract with Awilco worth US$425 million

- The contract accounts for 19% of our order win assumption of $3 billion this year.

- Price target of $10.20.  Keppel is a safer bet to ride on both offshore and marine recovery and property re-rating while offering a decent dividend yield of 3%

Mermaid Maritime (March 13: 14.8 cents)

- Maintain Hold.  Mermaid's order book has declined q-o-q to about US$148 million as of 4Q2017.

- Overall we think Mermaid's risk reward trade-off is neutral at this point: the lacklustre near-term outlook and downside risks are offset by undemanding valuation levels

- We based our valuation of Mermaid's core subsea business on a P/BV peg of 0.6x and ascribe zero value to associate AOD, giving us a price target of 14 cents.

Perennial Real Estate Holdings (March 13: 87.5 cents)

- Maintain Add.  PREH announced that it will purchase the remaining 50% stake in The Capitol Singapore from Chesham Properties.

- We view the deal positively as it signals the resolution of the deadlock on the project and progress  can now be made to unlock value and returns from this iconic development.

- Our RNAV estimate is raised by 5% to $1.97 as the acquisition cost is below the current market replacement cost.  Our FY2019-FY2020F EPS is raised by 2% to 18% to factor in the additional income post-consolidation and better asset performance

- A slightly higher price target of $1.18 pegged to a 40% discount to RNAV

Raffles Medical Group (March 13: $1.19)

- Maintain Buy.  We forecast RMG's net profits to decline gradually and are expected to trough in 2019 upon the opening of its Shanghai hospital.  Thereafter, we expect a gradual recovery and the utilisation of its new hospitals in Chongqing and Shanghai to rise after their opening in 4Q2018 and 2H2019 respectively

-For investors with a longer-term horizon, RMG's relative underperformance over the past year is an accumulation opportunity.  DCF-based price target of $1.32

Singapore Tech Engineering (March 13: $3.51)

- Upgrade to Buy. After three lacklustre years owing to tough market conditions and restructuring costs, growth catalysts are falling in place.

- We adjusted FY2018/FY2019/FY2020F profit by 5%.+7%/+14% and raised our DCF-based price target by 31% to $4.15 from $3.17

(Source:  TheEdgeSingapore March 19 2018)

Brokers' Digest 26 Feb 2018

Avi-Tech Electronics (Feb 21: 50.5 cents)

- Maintain BUY

- Avi-Tech reported great 1HF2018 results, with revenue growing 19.5% y-o-y and operating income surging 14.9% y-o-y.

- We remain positive on Avi-Tech's outlook, which is likely to benefit from increased electronics in the automotive sector

- DCF based price target of 59 cents (23% upside).  This implies a 12xFY2018F PER.  It also provides an attractive FY2018F dividend yield of 6.9%

Far East Hospitality Trust (Feb 21: 72.5 cents)

- Maintain BUY

- Far East Hospitality Trust's results were within expectations

- We continue to see 2018 as a period of recovery from this low base, though we tweak our RevPAR growth rates for FY2018 downwards. 

- After adjustments, our fair value decreases from 77 cents to 75 cents

Lippo Malls Indo Retail Trust (Feb 21: 39 cents)

- Downgrade to Hold

- Lippo Malls Indo Retail's Trust's 4Q2017 results were within expectations.

- We recognize that the negative sentiment related to a potential rights issue will continue to weigh on the trust, as investors may be unwilling to accumulate additional units in the interim.

- We have decided to apply a 10% haircut to arrive at a fair value of 40.5 cents, down from previous fair value of 46 cents

Oversea-Chinese Banking Corp (Feb 21: $13)

- Maintain Add

- FY2017 net profit was in line with consensus

- Similar to peers, OCBC took advantage of the upcoming FRS 109 and cleaned up its oil and gas loan book

- We raise our FY2018-2019F EPS by 3.3% to 6.1% on higher non-NII and lower credit costs.  A higher Gordon Growth Model based price target of $14

Roxy-Pacific Holdings (Feb 21: 57 cents)

- Maintain Buy

- We believe Roxy, being one of the earliest to landbank in the current market cycle, has six free-hold residential developments in Singapore that will be ready for launch in 2018, with two to three to be launched within 1Q2018

- Price target of 69 cents is based on a 30% discount to RNAV of 98 cents

Singapore Airlines (Feb 21: $11.29)

- Maintain Hold

- Singapore's Finance Minister announced in Budget 2018 that all facilities producing 25,000 tonnes or more of greenhouse gas emissions in a year will have to pay carbon tax from 2020

- In our view, the most direct impact will be higher fuel costs, as producers of jet fuel are likely to pass on the cost of carbon tax to the airlines.  We believe the impact will be mitigated for two reasons: an active fuel hedging strategy helps reduce volatility of fuel costs, and in progress renewal of fleet to more fuel efficient aircraft such as the A350s

- Unchanged fair value of $10.85

StarHub (Feb 21: $2.55)

- Maintain Fully Valued

-  4Q2017 service revenues of $571.7 million were in line with expectations

- On valuation, StarHub is expensive at a forward PER of 21x (versus sector average of 15x) and 10.2x EV/Ebita (versus sector average of 8.5x)

- While StarHub maintained an annual DPS of 16 cents in 2017 (5.6% yield), its annual DPS could be cut to 14 cents in FY2019F.  DCF based price target of $2.20

Thai Beverage (Feb 21: 83.5 cents)

- Maintain Hold

- 1QFY9/2018 core net profit of THB5.3 billion was below expectations at 18.8%/18.3% of our/consensus FY2018 estimates

- We cut FY2018-FY2020F EPS by 0.6% to 1.7%, as we factored in higher selling expenses

- A lower sum of the parts (SOTP)- based price target of 98 cents (from $1) as we revalue ThaiBev's stake in Sabeco

United Overseas Bank (Feb 21: $27.60)

- Maintain Buy

- UOB's FY 2017 net profit came in at $3.4 billion (+9% y-o-y)

- We have made marginal tweaks to our FY2018-FY2019F earnings after incorporating actual FY2017 numbers.

- Our price target of $29.50 is based on the Gordon Growth Model, equivalent to 1.3x FY2018 P/BV, almost at its 10-year average P/BV multiple

(Source:  TheEdgeSingapore February 26 2018)

Brokers' Digest 19 February 2018

CEI (Feb 12: $1)

- Downgrade to HOLD

- FY2017 revenue grew 5% y-o-y, but gross profit margin fell slightly to 23.1% versus 23.3% in FY2016, resulting in core net profit coming in 13% below our expectations

- In terms of outlook, CEI expects to continue generating net profit in FY2018F

- We cut our FY2018-FY2019F EPS for weaker margins.  Rolling over to FY2019F, our price target is reduced to $1

CITIC Envirotech (Feb 12: 71 cents)

- Maintain BUY

- Management is exceptionally confident about the company's outlook amid strong government emphasis on environmental protection and we share their confidence

-  With management bidding for multiple mega projects and confident of winning some, we believe CEL can deliver at least another $1 billion in project wins in 2018

- We raise our 2017 to 2019 net profit forecasts by 2.8%, 10.4% and 19.2% respectively

- Discounted cash flow based price target raised to $1.11

DBS Group Holdings (Feb 12: $27.31)

- Maintain OUTPERFORM

- Final dividend of 60 cents (versus 30 cents in 2016) and special dividend of 50 cents were declared, a major positive surprise.

- We have trimmed 2018 net profit estimate by 4% to factor in higher expenses, but kept 2019 net profit estimates unchanged

- We roll forward our price target to $31.10 a share

Frasers Property (Feb 12: $1.93)

- Maintain BUY

- We are the most bullish among consensus and we believe FPL will benefit from the recovery in Singapore office market

- Despite its diminishing landbank in Singapore, we believe any potential landbanking activities will be a positive catalyst

- Price target of $2.35, implying a 1x price to NAV

mm2 Asia (Feb 12: 46.5 cents)

- Maintain BUY

- Net earnings jumped a smaller 53% to $6.4 million on lower margins

- Having a strong presence in the entire value chain of content creation and distribution further cements mm2's status as a leader in the media/entertainment industry

- Price target of 75 cents, as we roll forward valuation to FY2019F

Moya Holdings Asia (Feb 12: 8.8 cents)

- Maintain BUY

- It is now Indonesia's largest water treatment operator

- We advise investors to accumulate the stock after the recent share price correction

- Unchanged DCF-backed price target of 17 cents (91% upside)

Neo Group (Feb 12: 66.5 cents)

- Maintain NEUTRAL

- Neo Group has managed to turn in a profit in 3QFY2018, in line with our expectations

- The group has an interest cost of 3% to 3.5%.  Given the huge borrowings, the interest payment easily represents 50% of our FY2018F Patmi

- The group still needs at least two to three years of spectacular results to bring down its net gearing ratio to a more reasonable level.

- Price target of 64 cents (4% downside)

Perennial Real Estate Holdings (Feb 12: 83.5 cents)

- Maintain ADD

- Perennial reported a 25.7% y-o-y drop in 4Q2017 revenue to $16 million, while net profit came in 8% higher y-o-y at $27.6 million

- We expect FY2018F earnings to benefit from additional rental contributions in China, while development contributions are likely to be felt from FY2019F.

- Our price target of $1.12 is based on a 40% discount to revalued NAV.

Singapore Telecommunications (Feb 12: $3.36)

- Maintain BUY

- Singtel's 9MFY2018 operating revenue grew 6.5% y-o-y to $13.21 billion, largely driven by Australia consumer and Digital Life

- Looking ahead, we reiterate our positive view on Singtel's longer-term outlook, given its focus to grow its cybersecurity, ICT solutions capabilities, digital advertising and other digital related businesses

- However, on fairly muted contributions from associates ahead, we adjust our forecasts slightly downwards and reduce our fair value from $4.19 to $4.15

(Source:  TheEdgeSingapore February 19 2018)

BROKER's DIGEST January 29 2018

AEM Holdings (Jan 24: $4.31)

- MAINTAIN ADD

- AEM has raised its FY2017 pre-tax profit guidance to a range of between $35 million and $37 million

- We raised our EPS forecasts by 16.2% for FY2017 and 33.6%/31.3% for FY2018/19

- Given the higher earnings forecasts, our price target is raised to $5.97

Cache Logistics Trust (Jan 24: 86.5 cents)

- MAINTAIN HOLD

- With Cache reportedly looking at acquiring a sizeable logistics portfolio in Australia, if successful, this might prove to be the turning point

- Our price target is adjusted upwards to 90 cents on the back of lower cost-of-equity assumptions, with potential upside if debt headroom is deployed into acquisitions

Frasers Centrepoint Trust (Jan 24: $2.31)

- BUY

- 1QFY2018 DPU of $3, up 3.8% y-o-y, was in line with both consensus and our estimates

- We believe the shares have not fully priced in the stronger rental reversions and possible upside from acquisitions

- We raise our DDM-based price target by 4% to $2.55 after revising up DPUs.

Frasers Commercial Trust (Jan 24: $1.51)

- MAINTAIN BUY

- Consensus has a "hold" call, owing to concerns that FCOT is ex-growth

- The news that HP will stagger its exit from Alexandra Technopark finally removes the HP lease uncertainty as an overhand on FCOT.

- We maintain our DCF-based price target of $1.71, with 10% capital upside and attractive 6.4% yield

Frencken Group (Jan 24: 64.5 cents)

- Buy (initiating coverage)

- A high tech manufacturer with a diversified portfolio of blue-chip customers in various industries, Frencken represents an excellent proxy to Europe's economic recovery

- We believe Frencken's dividend will continue and we expect attractive yields of 3.5% and 3.8% for FY2017 and FY2018, respectively

- PER-based price target of 79 cents, implying 33.9% upside

Keppel DC REIT (Jan 24: $1.46)

- DOWNGRADE TO HOLD

- KDCREIT's 4QFY2017 results met our expectations

- After fine-tuning our assumptions, we lower our FY2018 and FY2019 DPU forecasts by 1.3% and 3.6%, respectively

- However our fair value inches up from $1.50 to $1.51

M1 (Jan 24: $1.87)

- MAINTAIN NEUTRAL

- M1's 4QFY2017 core earnings fell 6% q-o-q on seasonally higher handset cost and depreciation expense

- We make no change to our forecast but roll over our valuation base year. 

- A slightly higher DCF-derived price target of $1.95 (from $1.90, 4.3% upside)

Sembcorp Marine (Jan 24: $2.52)

- UPGRADE TO BUY

- Our investment thesis assumes: (a) SembMarine sees a revival of new orders to $4 billion in 2018, ending a two-year slump; and (b) the company's balance sheet risks are resolve and net gearing falls to less than 30% by 2018, from 131% in 3QFY2017

- At our price target of $3.06, the stock would trade at 2.4x FY2018E P/BV, slightly above its long-term mean P/BV of 2.3x.

Singapore Exchange (Jan 24: $8.40)

- MAINTAIN OUTPERFORM

- SGX reported 2QFY2018 net profit of $88 million, down 3% q-o-q and flat y-o-y, 6% behind our estimates but broadly in line with consensus

- With good momentum in both securities and derivatives business, we expect SGX to return to earnings growth after five years.  Price target of $8.70

(Source:  TheEdgeSingapore January 29 2018)

Brokers Digest 22 Jan 2018

City Developments (Jan 17: $13.40)

- MAINTAIN BUY

- Given stronger market conditions, we update our model for firmer average price (ASP) assumptions and lower our discount to revalued NAV from 20% to 10%

 - Our fair value estimate increases from $13.50 to $15.30

Food Empire Holdings (Jan 17: 69 cents)

- MAINTAIN BUY

- Based on our estimate, the group has an exposure of around US$10 million to Caffe Bene, representing 4% of its market capitalisation

- Price target of 69 cents

Keppel-KBS US REIT (Jan 17: 91 US cents)

- BUY (initiating coverage)

- Keppel-KBS US REIT's DPU is expected to grow 6% over FY2018 and FY2019

- DCF-based price target of 95 US cents

Oversea-Chinese Banking Corp (Jan 17: $13.18)

- MAINTAIN BUY

- We expect OCBC to register positive loan growth of 1.5% q-o-q in 4QY2017

- We have tweaked our earnings model to incorporate the transition to FRS 109.  Our price target of $14.88 is based on 1.58x 2018F P/BV, which is derived from the Gordon Growth Model

SATS (Jan 17: $5.77)

- DOWNGRADE TO HOLD

- As highlighted before, strong traffic growth at Changi Airport, which we believe will benefit SATS as the dominant ground handling provider at Changi Airport

- Over the longer term, we remain positive over SATS' outlook.  Consequently, we raise our FY2018F to FY2022F EPS by 2% to 8% and increase our fair value to $5.50

Singapore Airlines (Jan 17: $11.03)

- MAINTAIN BUY

- The parent airline's passenger load factor rose 1.9ppt y-o-y in December 2017 as pax traffic increased 3.1% y-o-y with little change in seat capacity

- No change to our earnings estimates.  Price target of $11.90.

Singapore Press Holdings (Jan 17: $2.69)

- MAINTAIN HOLD

- Core operating profit for 1QFY2018 was $76.7 million, in line with expectations

- We expect FY2018F DPS to be maintained at 15 cents.  The declining ad spend outlook should be mitigated by staff rationalisation, which would help to support operating earnings and DPS.

- Price target of $2.78

Starhub (Jan 17: $2.95)

- MAINTAIN HOLD

- Our DCF-based price target is raised 12% to $2.80 after (a) fine-tuning our opex/capex assumptions to avoid the risk of being overly conservative, (b) including the potential value creation from its recent acquisitions, and (c) deferring the negative impact from TPG's market entry to FY2019F

- A good entry point is below $2.50 (bear case) and exit point above $3.10 (bull case)

Wilmar Int'l (Jan 17: $3.24)

- MAINTAIN BUY

- We expect Wilmar to report a 4QFY2017 core profit of US$360 million to US$380 million

- We forecast an EPS of 16.5 US cents, 19.8 US cents and 22.7 US cents for FY2017 to FY2019 respectively

- Sum-of-the-parts-based price target of $4.10

(Source:  TheEdgeSingapore January 22 2018)

Brokers' Digest 15 Jan 2018

Capitaland (Jan 10: $3.77)

- BUY. Continue to see value in  CapitaLand

- Price target of $4.35 based on a 10% discount to adjusted RNAV of $4.81 per share

Citic Envirotech (Jan 10: 73.5 cents)

- MAINTAIN BUY.  CEL announced a placement of 83.2 million shares at 85 cents each, with new partners willing to accept at 14.8% premium

- We raise our 2017 to 2019 net profit forecasts by 4.1%, 6.3% and 7.6% respectively

- DCF based price target of $1.09

Cityneon Holdings (Jan 10: $1.02)

- MAINTAIN BUY.  Cityneon has signed a term sheet with Fabulous to set up a digital media signage board at the Marvel exhibit in Las Vegas

- We raise our 2018 and 2019 net profit estimates by 3.3 and 2.5% respectively

- A higher price target of $1.56 (previously $1.50), pegged to peer's average of 15.4x FY2018F PER

Keppel Corp (Jan 10: $7.92)

- MAINTAIN BUY.  Keppel's property segment remains under valued at 0,.9x P/BV, below Singapore's developers' 1x, notwithstanding Keppel's huge historical land bank of 6.5 million sq m at lower cost

- Our price target of $9.80 is based on sum-of-the-parts valuation.  Our price target translates into 1.3x FY2018 P/BV

Mapletree Logistics Trust (Jan 10: $1.35)

- BUY.  Mapletree Logistics Trust has entered into a sale and purchase agreement with a third-party vendor to acquire the remaining 38% strata share value of Shatin No 3 in Hong Kong

-  Funding will come from bank borrowings and internal funds, such that its aggregate leverage ratio is expected to increase to 39% post-transaction

- Fair value estimate of $1.35 for now

OUE Commercial REIT (Jan 10: 74.5 cents)

- MAINTAIN HOLD.  On the back of a nascent recovery for the office market in Singapore in 2017, we see robust sentiments extending into 2018.

- Valuations for OUECT are not particularly cheap at this juncture. 

- OUECT's 12 month blended forward consensus dividend yield has now compressed to 6.4%

- Fair value estimate of 67 cents

OUE Hospitality Trust (Jan 10:  88 cents)

- MAINTAIN HOLD.  The growth in passenger movements at Changi Airport remains strong

- After adjusting our model parameters on the lowered average cost of debt, our fair value increases from 82 cents to 83 cents and we expect a 6.2% FY2018F yield against Jan 4's closing price.

- We still do not find OUEHT's current unit price compelling, though we remain most positive on OUEHT of the four hospitality REITs under our coverage

Singapore Post (Jan 10: $1.24)

- MAINTAIN HOLD.  2017 has been a mixed bag for SingPost

- For FY2018F we forecast flattish underlying earnings with growth in FY2019F

- Fair estimate of $1.26

VENTURE Corp (Jan 10: $22.48)

- Buy (initiating coverage).  Venture is an electronics manufacturing services provider and original design manufacturer with facilities in Singapore, Malaysia and China.

- Our FY2018 EPS is 17% higher than consensus

- We value Venture at 18.8x FY2018E PER, a 1-% premium over its global high-mix, low-volume peers, given our estimated 21% EPS CAGR for FY2017 to FY2019E versus 12%.

- Price target of $27.50

(Source:  The EdgeSingapore January 15 2018)