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)

Broker's Digest 18 Dec 2017

Bumitama Agri (Dec 13: 74.5 cents)

- Maintain Buy.  Downside risks for CPO prices will not be significant from now

- However we do not expect prices to bounce back strongly either

- Our price target of 95 cents is maintained

CapitaLand Retail China Trust (Dec 13: $1.60)

- Maintain Buy.  Acquired a much younger asset, Rock Square in the first-tier city of Guangzhou.

- Although initial yield is lower in comparison, we believe the asset has greater growth potential

- We have priced in another acquisition of $250 million for the start of FY 2018 with 5% initial net property income yield and 3% per annum growth potential

City Developments (Nov 13: $12.65)

- Maintain ADD.  City developments has revised the offer price for remaining 34.8% in Millennium & Copthorne it does not own

- Once completed, the deal is likely to accrete positively to our revised NAV estimates

- Price target of $13.15 pegged at a 20% discount of RNAV

ComfortDelgro (Dec 13: $1.95)

- Maintain BUY.  ComfortDelgro announced that it was acquiring a 51% stake in Lion City Rental

- This tie up should be positive as both parties leverage their strengths. 

- DCF-based price target of $2.40

First REIT (Dec 13: $1.40)

- Maintain BUY.  Siloam registered a healthy set of top-line and operational results in 3Q2017.

- We continue to expect positive base rental revisions for the REIT's Indonesian assets

- First REIT currently trades at a FY2017F P/BV of 1.38x %, lower than Parkway Life REIT's 1.66x.

- Fair value estimate of $1.44

First Resources (Dec 13: $1.87)

- Maintain NEUTRAL.  We believe the downside risks for CPO prices would not be significant from now on and are likely to remain relatively rangebound.

- We lift FY2018F-FY2019F earnings by3% to 10% to reflect higher CPO price assumptions

- Price target drops to $2.03 (from $2.15) based on a lower 2018 PER of 12 x (from 13 x)

Roxy-Pacific Holdings (Dec 13: 54 cents)

- Buy (initiating coverage). Roxy being one of the earliest to land-bank in the current market cycle, has seven freehold residential developments in Singapore that will be ready to launch in 2018

- In FY2017, Roxy acquired four new commercial buildings in Australia/New Zealand and one hotel property in Japan.  These properties will start contributing in FY2018

- Our price target of 69 cents is based on 30% discount to RNAV of 98 cents

SPH REIT (Dec 13: $1.03)

- Downgrade to HOLD.  SPH REIT's earnings are resilient, support by sticky occupancies, while its low gearing of around 26% empowers the manager to undertake value accretive acquisitions

- Our FY2018 DPU forecast is 8% lower than the consensus average

- DCF-backed price target of $1.07

Wilmar Int'l (Dec 13: $3.15)

- Maintain NEUTRAL.  Downside risks to CPO prices would be quite limited from now.

- However there is a lack of catalysts for a significant share price recovery

- We believe the key positive development for 2018 would be the group's growing consumer pack segment while the China listing is expected to come only in 2019.

- Our SOP based price target dips to $3.31

(Source:  TheEdgeSingapore December 18 2017)