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OCBC CSE Global: Staying cautious despite improved oil outlook Solid balance sheet helps Maintain HOLD
Russia earlier this week said that it will support a proposal by Organization of the Petroleum Exporting Countries (OPEC) to limit output in a bid to reverse the slump in oil prices. OPEC is looking to agree to cut around 700,000 barrels/day at its meeting on 30 Nov but it does not necessarily mean all of its members will stick to this agreement at the meeting. Hence, Russia’s support will have little impact if an agreement, whether it is a production freeze or cut, is not reached. Looking ahead, we expect orders from CSE Global Ltd’s (CSE) Oil & Gas (O&G) customers to continue tapering down but growth in infrastructure projects to help mitigate this weakness from the O&G industry. We also think the slowdown in spending within the O&G industry will persist until oil majors see reasonable stability in oil prices. Therefore, as we keep our forecasts unchanged, maintain HOLD on CSE, with the same FV of S$0.43, supported by its strong operating cash flows and solid balance sheet. |
MayBank Kim Eng Sarine Technologies (SARINE SP) 3Q16 not likely to disappoint
3Q16 unlikely to disappoint; maintain BUY Stock has drifted down by 9% over the past month, possibly on fears that its recovery may not be sustained, like last year. We believe that 3Q16 is unlikely to disappoint and expect USD4-6m in net profit. Our confidence stems from: 1) decent rough diamond sales in De Beers’ Sight 7 and Sight 8, 2) supportive India diamond trade data and 3) expectation of seasonally higher manufacturing activities in India before Diwali in Oct. But we are moderating our expectations for the pace of growth of its polished diamond segment and have cut FY16-18E EPS by 3-15%. Our DCF-TP (WACC 13.3%, g 2%) dips from SGD2.07 to SGD2.01. Maintain BUY.
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UOB KayHian Singapore Post (SPOST SP) Shopping’s Over, Time For Delivery With the acquisition period essentially over, SPOST’s strategy going forward will be focused on execution and driving integration. We believe the strategy will be undertaken through a three-pronged approach, which involves defending the core postal business while integrating and creating synergies across its commercial network and at the same time unlocking value through SPC mall - a non-core asset. Maintain BUY with an unchanged SOTP target price of S$1.77.
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DBS Vickers United Engineers Centenarian with Prized Commercial Portfolio
Established centennial Singapore company with key businesses which are subject to a potential take-over as major shareholders look to exit Substantial portion of prized commercial portfolio are on either 999-year leasehold or freehold titles Upside for acquirer comes from active leasing of empty space while more capex is needed to be spent to spruce up an ageing portfolio |
