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)