ANALYSTS SAY: Buy, Sell, Hold (17 Oct 2016)

MayBank Kim Eng

DeClout Ltd (DLL SP) Value creating incubator Tech aggregator with value unlocking track record

Listed on the SGX since 2012, DeClout is an incubator of IT infrastructure services and Vertical Domain Cloud (VDC) businesses.

Key management have had track records of successfully growing and spinning off tech companies. In its relatively short listing history, DeClout’s biggest success in value unlocking has been the Jul 2016 listing of Procurri (PROC SP, CP SGD0.46, UNRATED), an IT hardware distribution business, which generated ROI of >200% or an unrealized gain of >SGD50m at IPO. This is a first in SGX history for an SGX Catalist Board firm spinning off of a subsidiary to the Main Board. Declout’s current portfolio of firms provides hardware distribution and maintenance (Procurri), ICT solutions (Acclivis & Beacon), e-commerce platform (Corous 360), and e-logistics platform (vCargo Cloud).

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UOB KayHian

Singapore Press Holdings (SPH SP) 4QFY16: Earnings To Weaken Further With Economy;

Dividends Will Decline Reported FY16 headline profit of S$265m was within expectations. Dividend for FY16 was lower as expected, though from 20 S cents to 18 S cents. The core media business will likely weaken further as the Singapore economy falters, given its correlation to it. Further dividend cuts are likely as a result. We cut core earnings by another 6-8%, on continued weakness from the media business. We update DCF assumptions and our target price falls to S$3.29. Downgrade to SELL.

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OCBC

ST Engineering: Secures S$520m of new aerospace contracts

Singapore Technologies Engineering (STE) announced last Friday that its aerospace arm, ST Aerospace, has secured new contracts worth S$520m in 3Q16. These projects range from line and airframe maintenance to component repair and overhauls. The total contract value includes the passenger-to-freighter conversion of four Airbus A330-300 for DHL Express as announced in Jul 16. And among the line and heavy maintenance contracts was a five-year agreement with an international airline to provide heavy maintenance support for the airline’s B767 and B777 aircraft fleet. Recall that STE was sitting on an order book of S$11.6b as at end 2Q16, of which it expects to deliver about S$2.5b over 2H16. That said, these new contracts are not expected to have material impact on STE for FY16. Maintain HOLD on STE, with an unchanged FV of S$3.13 for now. Note that STE is expected to announce its 3Q16 results before trading hours on 10 Nov 2016.

CIMB

RHT Health Trust Completes divestment; special distribution of 24.8 Scts

■ Completes sale of CCDs and CCPS to Fortis Healthcare.

■ Special distribution of 24.8 Scts to unitholders.

■ Maintain Add and DDM-based target price of S$1.11. Completion of sale

● RHT has announced that the proposed disposal of 51% of the compulsorily convertible debentures (CCDs) in Fortis Hospotel Ltd and 100% of the compulsorily convertible preference shares (CCPS) in Escorts Heart Institute and Research Centre Ltd to Fortis Healthcare Ltd have been completed on 14 Oct 2016. The gross consideration totalled Rs14,566.7m (S$301m) while the net proceeds from the disposal amounted to Rs9,602.7m (S$198.5m).

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