OCBC | UOB |
Viva Industrial Trust: Waiting on a merger?
Viva Industrial Trust: Waiting on a merger?Viva Industrial Trust's (VIT) 1Q results were within expectations. DPU dropped 0.9% YoY to 1.838 S cents or 24.4% of our initial full-year forecast. Distribution declared was 0.8% higher YoY due to a S$1.78m top-up consisting of all previously retained distributable income arising from the Jackson Square Rental Support settlement, offset by management fees being paid in cash from the start of 2018 onwards. The period of exclusivity for the discussions on the proposed merger with ESR-REIT has been extended from 15 May to 31 May 2018. We note that according to a Bloomberg article, the firms are waiting final approvals from a Singapore regulator before announcing the deal. After adjustments, our fair value decreases from S$0.93 to S$0.90, mainly due to the management fees being paid in cash. VIT is trading at 7.6% FY18F yield and 6.9% FY19F yield as of 16 May’s close. Subject to further announcements from VIT regarding the potential merger, we downgrade from Buy to HOLD on VIT. |
SIA Engineering (SIE SP) 4QFY18: Beats Street Estimates; SIAEC Expects More Engine Checks
While 4QFY18 JV & associate income fell short of expectations, revenue from engine maintenance segment rose 28% yoy in 2HFY18, the fastest pace in more than five years. In addition, SIAEC expects this segment to grow further in FY19 and plans to grow its line maintenance earnings. Given that the latter is an asset-light business, the operating leverage should be high. At our target price, the stock trades at excash PE of 19.6x. Maintain BUY. Target price: S$3.80.
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CIMB | PHILLIP |
Thai Beverage 2QFY18: Downside risks priced in
■ 1HFY9/18 core net profit of THB11.6bn was below at 42.1%/42.8% of our/consensus FY18F estimates. ■ 2QFY18/1HFY18 core net profit fell 3%/19% yoy on weaker domestic beer volumes despite higher revenues due to the consolidation of SABECO and Grand Royal. ■ Lower interim DPS of THB0.15 was announced; implying a 35.1% payout ratio in 2QFY18 (from THB0.20/40.5% payout in 2QFY17). ■ We lower our FY18-20F net profit as we opt to be conservative on domestic beer sales and overall net margins given the sluggish underlying demand. ■ However, post a 13.6% correction in its share price YTD, we believe downside risks for the stock are now priced in. We upgrade our call to Add.
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Thai Beverage Accretive acquisitions but domestic beer demand drags SINGAPORE | CONSUMER | 2Q18 RESULTS
1H18 Revenue/Core EBITDA met 55%/50% of our full year expectations; Earnings missed on higher than expected finance costs and effective tax rate Strong results from recent acquisitions unable to offset the persistent weakness in Thai Beer market Introduction of a new excise tax of 2% for Elderly Fund since 26 Jan-18 Proposed lower interim dividend of 0.15 baht per share (1H17: 0.20 baht) Maintained BUY with unchanged SOTP-derived TP of S$1.05
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RHB | DBS |
REITS REITs Pulsebeat: Banking On Growth Outlook
Maintain OVERWEIGHT. We remain cautiously optimistic on the sector’s prospects despite market concerns over rising interest rates. Key reason is the improving market outlook for REITs, with a broad-based demand pickup and supply tapering across most sub-segments. On the balance sheetfront, REITs are generally well-prepared; ~80% of debts are hedged to mitigate rising interest costs. Many have also started exploring new markets in their quest to deliver inorganic growth and diversify their presence. Among the sub-sectors, our preference is for hospitality and industrial REITs – we believe they are well-poised to tap into demand growth.
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Singapore Property Room to Upgrade
Demand for new private homes projected to remain above historical average Foreigner purchases which average c.9% of annual demand, is the wild card to fuel a further rise in prices Average property unit prices expected to be S$1.9m-S$2.5m, with smaller unit sizes exacerbating psf pricing
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