| PHILLIP SECURITIES | MAYBANK KIM ENG |
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Cogent Holdings Ltd Seize the opportunity SINGAPORE | INDUSTRIALS | UPDATE
Resignation of GM does not materially affect ongoing business Progress made on Jurong Island Chemical Logistics Facility project Price weakness presents an opportunity to accumulate - reiterate BUY
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Suntec REIT (SUN SP) Retail headwinds showing Maintain HOLD with TP lowered to SGD1.77 3Q16 was a miss due to a lower than expected retail performance. We trim DPU by 2.5% and lower TP 2% to SGD1.77 based on an unchanged target yield of 5.5%. We believe persistent headwinds to Suntec’s retail business will continue to weigh on income and stock sentiment. Maintain HOLD. KREIT (BUY, TP SGD1.21) and CCT (BUY, SGD1.81) could outperform Suntec REIT due to better income stability from more favourable office lease expiry profiles and WALE. |
| CIMB | |
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Ascott Residence Trust Continued headwinds ■ 3Q/9MFY16 DPU of 2.15/5.85 Scts within expectations and forming 27%/75% of our full-year forecast. ■ Driven by acquisitions, 3Q REVPAU rose 2% yoy. On a same-store basis, REVPAU was down 11% yoy. ■ Singapore, Belgium, China, Philippines, the UK and France delivered poorer performance, offset by acquisition growth in Australia and strong US showing. ■ Inorganic growth prospects could continue to underpin forward earnings outlook. ■ Maintain Hold with an unchanged target price of S$1.18
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| OCBC INVESTMENT RESEARCH | |
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Keppel Corporation: Pay cut across the board Keppel Corp (KEP) reported a 40.2% YoY fall in revenue to S$1.5b and a 38.1% drop in net profit to S$224.5m in 3Q16, such that 9M16 net profit of S$640.9m accounted for 69% and 62% of ours and the street’s full year forecasts, respectively. The drag came from Offshore & Marine, whose net profit was only S$11m in 3Q16. Property’s net profit was S$157m in 3Q16, accounting for 70% of the group’s total net profit. Senior management across all of Keppel have taken a reduction in their monthly salary, and the group will increasingly also look into early termination of contracts and selective retrenchment. The group is also looking into the possibility of mothballing some yards. We tweak our fair value estimate from S$5.68 to S$5.71 to incorporate changes in the value of KEP’s property segment and the group’s listed entities but maintain our HOLD rating; we would turn buyers around S$5.30.
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