| PHILLIP SECURITIES | OCBC |
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Mapletree Industrial Trust Price weakness presents attractive valuation
Price has corrected c.6% post-Trump victory Pricing-in of rate hike expectations, but valuations are attractive Debt management profile is top in class Near-term visibility of DPU growth from completion of BTS project Accumulate on price weakness Upgrade to "Accumulate" rating with unchanged DDM valuation of S$1.74
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Consumer sector: Adapting in the face of stronger competition Amid persistent operating challenges and increased competition for the consumer sector, the government has outlined various strategic roadmaps with emphasis on innovation and productivity measures, and including increasing the e-commerce share of total retail receipts. We note that strategies by companies under our coverage often mirror this focus as well in a bid to support earnings growth for the longer term. While valuations for the sector have generally been at reasonable levels, due to a mixed macro outlook across the region for the nearer term and stronger competition, we are keeping our NEUTRAL stance on the consumer sector. At this juncture, we are leaning towards Sheng Siong Group [BUY, S$1.15] as our preferred pick for its defensive and cash generative business, value positioning in the market, decent dividends, and management execution strength.
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| DBS VICKERS | |
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Keppel DC REIT Destiny in its own hands BUY with S$1.33 TP. Keppel DC REIT (KDC REIT) remains one of the few REITs in Singapore that is projected to deliver a solid 5% CAGR in distributions supported by positive market dynamics. Low gearing of c.30% and low cost of capital empower the REIT with financial capacity to acquire accretive assets. Maintain BUY with a revised TP of S$1.33 after rolling forward valuations and pricing in recently announced acquisition of Keppel DC Singapore 3 (KDC SG 3).
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| MAYBANK KIM ENG | UOB KayHian |
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Jumbo Group Ltd (JUMBO SP) Banking on Overseas Markets for Growth 4Q16 within; maintain BUY, TP SGD0.78 4Q16 core EPS was in line, with full year at 98% of our FY16E. Maintain BUY and TP of SGD0.78, expecting catalysts from franchise & JV opportunities. Following an 18% earnings jump in FY16, we forecast 22%/12% growth for FY17-8E. We expect continued upside overseas, especially from China. At 21x FY17E P/E vs peers’ 23x, we see good value for a stock that generates 25% ROE with an attractive franchise and growth strategy. Our TP is still based on blended 21x FY17E P/E and DCF (WACC 7.4%, LTG 1%) to incorporate its longer-term growth prospects.
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United Engineers (UEM SP) Take Profit Due To Uncertainty; Downgrade To HOLD With China planning to tighten control over overseas investments and due to the increased macro uncertainty following Trump’s win, buyers in the proposed UE disposal deal may now expect lower prices. As such, the likelihood of the deal not materialising in the near future has increased significantly and we opt to include a 10% margin of safety. We advise investors to take profit and accumulate at lower levels. Downgrade to HOLD and reduce target price to S$2.75, based on 0.9x book value. Entry price: S$2.50.
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