APAC Realty (Aug 6: 51.5 cents)
- MAINTAIN ADD. 2Q/1H2019 profit declined to $3.2 million/$5.1 million, below our expectation
- 1H2019 DPS of 0.75 cent was lower than our expectation
- Our price target dips to 60 cents, still based on an average of 10x FY2020F PER and DCF valuation
CapitaLand Retail China Trust (Aug 6:
$1.53)
- MAINTAIN HOLD. CRCT plans to raise gross proceeds of about $279.4 million by way of a private placement of 105,043,000 new units at an issue price of $1.469 per new unit
- We believe that the addition of the three malls to CRCT’s portfolio remains a strategically wise transaction
- Fair value estimate of $1.45 for now
Genting Singapore (Aug 6: 87 cents)
- MAINTAIN NEUTRAL. 2Q2019 adjusted Ebitda grew 11% y-o-y to $294 million, bringing 1H2019 adjusted Ebitda to $624 million, which represents 50% of our estimates
- According to management, the 50% increase in casino levy for Singaporeans and permanent residents had a significant impact on mass gaming
- We cut our adjusted Ebitda by 10%/7%/3% for FY2019-FY2021F as we lower our mass volume assumption and normalise the win rate.
- This lowers our price target to 97 cents from $1.02
Hi-P Int’l (Aug 6: $1.21)
- DOWNGRADE TO SELL. 2Q2019 Patmi rose 17% y-o-y despite a 5% drop in revenue, surpassing our expectation of flat y-o-y
- Despite now guiding to lower earnings y-o-y, guidance for revenue was maintained at flat y-o-y.
- We cut revised FY2019-FY2021E EPS by 4% to7% to reflect management’s revised guidance
- Price target falls to $1.15. Downside of 14% to our revised price target
Japfa (Aug 6: 49 cents)
- MAINTAIN HOLD. Japfa’s 2Q2019 headline earinings came in at US$5 million, down 83% y-o-y from US$29.6 million in 2Q2018
- Our sum-of-the-parts (SOTP) based price target, after incorporating a 10% holding company discount, is 53 cents (which implies 12.5x FY2019F PER)
- We see continued challenges in its Indonesia operations in 2H2019 and uncertainties arising from the outbreak of the African swine fever virus in Vietnam
Oversea-Chinese Banking Corp (Aug 6:
$11.02)
- MAINTAIN HOLD. We remain cautious over its non-performing assets coverage, which at 78% remains the lowest among its peers
- OCBC currently trades at about 1.1x FY2020F P/BV, near one standard deviation below its average 10-year forward P/BV multiple
- A higher dividend payout ratio for OCBC, closer to its peers’ 50%, could be a rerating catalyst
- Price target of $11.50
Penguin Int’l (Aug 6: 49.5 cents)
- MAINTAIN ADD. Penguin Int’l (PBS) made great strides, with 2Q2019 revenue jumping 164.1% on 2Q2019 chartering and shipbuilding revenue
- As at 1H2019, PBS was in net cash position of $48.5 million (21.7 cents a share)
- We value PBS at 1x FY2019F P/BV (excluding about $5 million investment in Marco Polo), at a 20% discount to its small to mid-cap peers’ 1.2x aggregate P/BV pre-oil crisis
- Price target of 72 cents
Singapore Exchange (Aug 6: $7.90)
- DOWNGRADE TO HOLD. Singapore Exchange (SGX) reported a strong 4Q2019, with core net profit rising 24% y-o-y and bringing full-year earnings to 103% of our consensus forecasts
- Management guided for higher opex of $465 million to $475 million and lower capex of $45 million to $50 million in FY2020F.
- Final DPS of 7.5 cents brings FY2019 DPS to 30 cents (82% payout), within expectations
- Limited upside supported by a 4% dividend yield
United Overseas Bank (Aug 6: $25.66)
- MAINTAIN BUY. 2Q2019 net profit rose 8% y-o-y and 11% q-o-q
- Management guided for single-digit 2019 fee income growth.
- We raise our 2019F net profit by 1%, but lower our 2020F net profit by 5% on weaker NIM assumption
- Our valuation for UOB is based on long-term ROE assumption from which we derive our price target of $29.50 (12% upside plus 5% yield)
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