| CIMB | OCBC |
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Perennial Real Estate Holdings Increases stake in Chinatown Point ■ Buys additional 40% stake in Chinatown Point for cash consideration of S$61.8m ■ Price translates to a 5.2% NPI yield, accretive to earnings ■ Maintain Add with an unchanged TP of S$1.11 Raises stake in Chinatown Point ● PREH announced that it has, together with SPH, acquired 60% of Chinatown Point for a consideration of S$92.6m. PREH’s 40% share will raise its existing stake to 45.15%, making it the largest owner of the property. Chinatown Point has a 208,798sf retail podium and 4,230sf of strata office space. It has a committed occupancy of 97% and enjoys a strong shopper traffic of 2.4m/mth.
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Oil & Gas sector: 2017 to be as newsflow heavy After enduring a dramatic fall in stock prices in 2H14, further drops in 2015, and lacklustre performance in 2016, could it be time for a recovery for the Oil and Gas sector in 2017? Currently, many companies are now trading at about 0.5x book or lower, pricing in most negatives. However, investors must understand that there are different subsectors in the industry, and when you recover depends on where you are on the value chain. In 2017, we could also see more corporate finance activities; possible privatisation candidates include PACC Offshore Services Holdings, Mermaid Maritime, PEC Ltd, Baker Tech, Dyna-Mac Holdings and possibly Pacific Radiance at a later point in time. In this report, we also update on our earlier stock take of companies’ financial positions and debt servicing abilities. Maintain NEUTRAL on the broader sector given the dim outlook and depressed valuations; our preferred pick for now is Sembcorp Industries given its more diversified business operations and undervaluation of its utilities segment. |
| NRA CAPITAL | |
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HKSE listing plans progressively unfolding. ISDN has received clearance from SGX for the proposed listing of up to 40m new shares in Hong Kong. The listing is now pending shareholders’ approval at an EGM on 16 December and also approval by the Hong Kong Stock Exchange. Barring unforeseen circumstance, we would expect the dual listing to take place within the next few months or so. The key variable factor now is the issue price which will serve as a catalyst for the share price in Singapore. |
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| PHILLIP SECURITIES | UOB KAYHIAN |
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Nam Lee Pressed Metal Industries Dragged down by 4Q, but no change in thesis of being a yield play S$129.4mn FY16 revenue missed our forecast of S$143.3mn by 9.7% S$28.0mn FY16 gross profit missed our forecast of S$32.9mn by 14.9% S$9.1mn FY16 PATMI missed our forecast of S$12.4mn by 26.6% 1.0/1.0 cent final/special dividend declared, 53% payout (FY15: 1.0/1.5 cents, 47% payout)
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SATS (SATS SP) Strong Long-term Growth Prospects But Positives Priced In SATS has outperformed the STI by 24% ytd (2015: +40%) due to its ability to generate ROIC at above its cost of capital, strong cash generation and strong balance sheet relative to other industrials. Going forward, the stock is likely to market-perform as most of the positives have been priced in. Future outperformance will likely be driven by stronger-than-expected throughput growth at Changi and earnings growth from JVs and associates. Maintain HOLD. Target price: S$4.50. Entry price: S$4.25.
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