| UOB KayHian |
MAYBANK KIM ENG |
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Health Management International (HMI SP) Homecoming; Our Key Mid-cap Healthcare Pick
HMI’s latest venture into ambulatory care rides upon the latest growth trend in outpatient procedures. The centre builds upon the group’s regional focus and expansion on the local front. We trimmed our FY19-20 net profit forecasts by up to 3.6% due to higher interest expenses. Maintain BUY with a revised DCF-based target price of S$0.82. (from S$0.83)
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MindChamps PreSchool (MCHAMPS SP) Planting seeds for future growth Largest operator of premium range preschool centres in Singapore
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| MAYBANK KIM ENG | OCBC |
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StarHub (STH SP) Value Has Emerged
Much is priced in. Upgrade to BUY Even after reducing our forecasts and TP (Fig 1), StarHub is offering respectable upside to value investors and thus we upgrade to a BUY with a SGD1.96 DCF (WACC 5.7%, LTG -1%) based TP. At current levels, the share price is implying extreme scenarios of pay TV revenues going to zero or that wireless service revenues drop a further c15% from our estimates. With the impact of TPG (TPM AU, Not Rated) still to be felt we acknowledge short-term risk but believe the stock has more than priced in long-term profit erosion.
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City Developments Limited: Bearing the brunt of policy headwinds
City Developments Limited: Bearing the brunt of policy headwindsWe expect City Developments Limited (CDL) to be one of the worst hit among the developers under our coverage after the latest set of cooling measures announced on 5 Jul. Based on our previous forecasts prior to the announcement of the tightening measures, CDL’s Singapore residential projects formed ~30% of our GAV forecast. We apply a significantly higher RNAV discount of 40% (previously 5%), as our previous thesis of CDL being a key beneficiary to the Singapore residential market upcycle given its large land bank would now likely work against them after these new measures. We also scale back our ASP and sales volume assumptions for CDL’s Singapore residential projects, and thus derive a lower fair value estimate of S$9.59 (previously S$15.78). Although CDL’s share price slumped 15.6% to S$9.46 on 6 Jul 2018 after the cooling measures were announced, we believe the negative investor and buyer sentiments may curtain a meaningful rebound in its share price in the near future. Downgrade to HOLD. |
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PHILLIP SECURITIES |
DBS VICKERS |
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Singapore Property Sector A surprise fresh set of cooling measures SINGAPORE | REAL ESTATE | SECTOR UPDATE
New cooling measures: Higher Additional Buyer’s Stamp Duty and LTV tightening. Negative short-term impact on transaction volumes and prices but makes for a more sustainable upcycle with more gradual price increases. Property price increases have been backed by income growth which has outpaced home price increases. We maintain our OVERWEIGHT view on Singapore Property Sector even as we reduce assumed selling prices for selected projects and increase sector RNAV-discount.
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Singapore Banks Property cooling measures strikes again!
• New property cooling measures (wef 6 Jul 2018) will dampen loan growth; downside to 2018-19 loan growth • Previous property cooling measures caused loan growth to half from a high of 16% after a year; banks’ share prices did not correct sharply as business loans stayed strong • Downgrade banks to HOLD; TPs for UOB and OCBC lowered to S$28.30 and S$12.20 respectively on earnings revision of c. -1% to -5% over FY18-19F
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Check out our compilation of Target Prices