| CIMB | DBS VICKERS |
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Golden Agri-Resources 3Q boost from tax credit and biological assets gain ■ 9M16’s core profit was broadly in line, making up 34% of our full-year forecasts. ■ The tax credit of US$242m and biological gains lifted reported net profit for 9M16. ■ It maintained its guidance for its FFB output to fall by 15-20% for FY16. ■ It projects CPO price to be maintained with potential upside at the end of the year. ■ Maintain Reduce with higher TP of S$0.38 (FY17 P/E of 15x) due to rollover effect.
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ComfortDelgro Growth despite translation headwinds Maintain BUY, TP lowered slightly to S$3.09. The recent share price weakness further reinforces our recommendation on the counter despite the market’s perceived challenges for the group. We reiterate our BUY recommendation on ComfortDelgro (CD) as valuations of 16.6x/ 15.3x FY16F/ 17F PE are below its historical 5-year average. With lower capex requirements, we believe there is potential for a higher dividend payout.
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| OCBC SECURITIES | |
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Singapore REITs: Uncertainties postelection; time to bargain hunt The S-REITs under our coverage have concluded their 3QCY16 results reporting. Out of the 24 S-REITs we cover, 21 met our expectations, two fell short and only one exceeded. Overall DPU growth for the REITs under our coverage came in at -0.8% on a YoY basis. However, if we take into account significant one-off items, adjusted DPU would instead have declined by 0.4% YoY, based on our estimates. The outlook for the S-REITs sector has become more cloudy post Donald Trump’s victory in the U.S. presidential election. Although bond yields have spiked, the sharp correction in the share prices of the S-REITs sector have culminated in valuations remaining undemanding, in our view. We maintain OVERWEIGHT on the S-REITs sector for now, and believe investors should bargain hunt on quality REITs, especially those which have underperformed the sector. Our preferred picks are Frasers Centrepoint Trust [BUY; FV: S$2.33], Keppel DC REIT [BUY; FV: S$1.35], Ascendas REIT [BUY; FV: S$2.67], Frasers Logistics & Industrial Trust [BUY; FV: S$1.10] and Mapletree Greater China Commercial Trust [BUY; FV: S$1.15].
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| MAYBANK KIM ENG | UOB KAYHIAN |
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Sarine Technologies (SARINE SP) New Drivers May Soon Emerge 3Q16 at low-end of expectations.
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KSH Holdings (KSHH SP) 2QFY17: In-line Results; Landmark Contract Win Amid Intact Fundamentals 2QFY17 results came in within our expectation. The net profit drop was largely due to lumpy recognition in FY16, but it should play catch-up in 2H16. Construction revenue grew on improved margins, while KSH announced a S$139.1m landmark contract win. The robust underlying construction orderbook and pre-sold property project balance provide strong earnings visibility for the next two years. Maintain BUY and target price of S$0.69. KSH is trading at 5.5% FY17F yield and 0.7x FY17F P/B, boasting FY17F net cash of S$76.0m (30.3% of market cap).
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