| CIMB | OCBC |
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Venture Corporation Re-rating likely to continue
■ Venture is witnessing strong earnings momentum in 4Q16-2Q17, driven by customers in test & measurement/medical/others and networking & communications segments. ■ We expect seasonality to persist in FY17F, with Venture experiencing stronger earnings in 2H17F vs. 1H17. ■ Fischer Tech sale proceeds provide potential DPS upside of S$0.10 for FY17F. On top of the base DPS of S$0.50, we estimate FY17F DPS could rise to S$0.60. ■ After rolling over to a higher FY17F EPS and applying a higher P/E multiple of 17.3x (0.5 s.d. above historical 10-year average of 15.2x), our TP rises to S$20.87.
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OUE Commercial REIT: Higher gearing moving forward
OUECT announced that it will be carrying out a redemption of 75m convertible perpetual preferred units (CPPUs) at the issue price of S$1 for each CPPU. While CPPU distributions to the sponsor will drop, OUECT’s finance costs should creep up, given that the redemption will be largely funded by OUECT’s existing loan facilities. On balance, we expect DPUs to soften slightly by 0.2% and 0.8% in FY17 and FY18 against our last forecast, respectively. Separately, we believe that the outlook for the office sector is improving, with the same sentiment also observed from CapitaLand Commercial Trust’s recent acquisition of Asia Square Tower 2 (excluding the hotel component). Nonetheless, we will be waiting for further evidence to corroborate our view as we head into the earnings season. For now, based on our revised DPU forecasts, we maintain our HOLD rating but with a slightly lower fair value estimate of S$0.67
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| UOB KAYHIAN | |
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STRATEGY – SINGAPORE Alpha Picks: Conviction Calls For October We add SingTel and remove Cityneon after the latter’s strong outperformance. WHAT’S NEW Reviewing September picks. Our September alpha picks saw mixed performances. Cityenon was outstanding, rising 15% mom, whereas there was profit taking in Tianjin (- 4.4% mom) after rising 13% in August. SATS and Thai Bev consolidated 5% and 3% respectively but we remain confident of their prospects and see accumulation opportunities at current levels. Both Memtech and Wing Tai outperformed the FSSTI and delivered absolute returns of 2% and 1% respectively.
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| PHILLIP SECURITIES | |
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800 Super Holdings Ltd Diversification to laundry and dry cleaning ♦ Proposed acquisition of a laundry and dry cleaning business ♦ S$5 mn aggregate consideration payable is 4.2 times over NTA ♦ Intention is for Vendors to continue managing the business What is the news? Wizwash Pte Ltd, a wholly-owned subsidiary of 800 Super Holdings Limited (the “Group”) has entered into a call and put option agreement to acquire Iwash Laundry (Senoko) Pte Ltd (“Target”) from Fairlady Jewellers Private Limited (“Fairlady”), Lee Yok Sim (“LYS”), Chua Yun Chean (“CYC”) and Tan Choon Huat (“TCH”) (collectively, the “Vendors”) for S$4,998,960. The sum is to be paid in two tranches. Wizwash Pte Ltd was incorporated on 25 September 2017 with a paid-up capital of S$1 mn.
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Check out our compilation of Target Prices
