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)