| PHILLIP SECURITIES | OCBC |
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Chip Eng Seng Corporation Ltd
Solid execution in Singapore property development
Chip Eng Seng Corporation’s (CES) revenue and net income exceeded our estimate amid higher sales of units in Singapore property projects Weaker performance in Australia property development as cooling measures softened demand New HDB contract worth S$110.8 million was awarded and has boosted construction order book to S$457.2 million from S$568.2 million Construction of a PPVC plant in Tuas Basin to generate long term cost savings and create new revenue stream
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Frasers Logistics & Industrial Trust: Robust performance Frasers Logistics & Industrial Trust (FLT) reported its 2QFY17 results which beat its IPO prospectus forecast and was also slightly above our expectations. DPU of 1.75 S cents exceeded FLT’s forecast by 6.7% due largely to lower-than-expected finance costs. Operationally, FLT’s portfolio occupancy remained high at 99.3% (unchanged QoQ), while WALE is healthy at 6.7 years. Although negative rental reversions came in at 4.85% for 2QFY17 and 1.68% for 1HFY17, this is understandable as FLT’s average fixed rental escalation of ~3.2% per annum is typically higher than market rental growth and hence the rental rates are usually reverted back to market rates upon the signing of renewal and new leases. Looking ahead, we expect FLT’s portfolio to remain resilient, as it only has 0.2% and 3.6% of lease expiries (by gross rental income) for the remainder of FY17 and FY18, respectively. We raise our FY17 and FY18 DPU forecasts by 2.8% and 3.3%, respectively. Maintain BUY with a higher fair value estimate of S$1.12 (previously S$1.08).
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CIMB |
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Thai Beverage 2QFY17 preview – eyes on beer margins and sales pickup ■ Thaibev is poised to release its 2QFY17 results after market closes on 11 May. ■ Key points to focus on: 1) beer margins, 2) sales recovery. With current consensus expectations relatively conservative, we think 2Q results could be a beat. ■ Maintain Add with an unchanged SOP-based TP of S$1.07.
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| DBS | RHB |
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Riverstone Holdings Expanding on growth ambitions Upgrade to BUY as we raise TP to S$1.07; Earnings catalysed by strong cleanroom demand and new three-year expansion plan. Riverstone surprised in 1Q17, as the uptick in cleanroom demand (+20% y-o-y – which carry higher margins, held up profits better than expected. With demand in the cleanroom segment mainly stemming from the semiconductor and mobile tablet sectors, we see Riverstone as an indirect beneficiary of the current semiconductor upcycle. We arrive at a higher TP of S$1.07 after rolling forward our earnings base to FY18F and raising our profit estimates by +8%/+5% for FY17F/FY18F on 1) increase in total production capacity of 10 bn pieces p.a. by end-2019 (+22% from earlier guidance of 8.2 bn pieces p.a. by end-2018, 2) higher cleanroom glove mix, and 3) higher margins.
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Jadason Enterprises A Gem With An Explosive NPAT Growth We initiate coverage on Jadason with a BUY recommendation and DCFbased TP of SGD0.15 (103% upside). As a PCB drilling and mass lamination service provider, it is a key proxy to the uptrend in the semiconductor space. The company has even expanded its customer base as well as product mix, with growing demand from existing and new customers. Moreover, it has also secured a new major U.S smartphone project via an existing customer in its lucrative drilling and manufacturing division. This would bump its segment revenue by 30% for the new product launch slated for 2H17. Following a turnaround in FY16, we expect it to enjoy bumper profits in FY17F-18F.
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