ANALYSTS SAY: Buy, Sell, Hold (24 July '18)

OCBC SECURITIES

Raffles Medical Group (RFMD SP)

2Q18 Results Preview: No Surprises Expected; Making A Strategic Move

We do not expect any surprises in RMG’s upcoming 2Q18 results to be announced on 6 August. The recent move to launch Raffles Shield is a positive strategic move and the opening of the CQ hospital is progressing well. There is no change to our 2018-20 earnings estimates. Maintain BUY with a lower DCF-based target price of S$1.28 (previously S$1.32) as we raise our risk-free rate assumption by 0.25ppt to 2.75% and increase terminal growth rate to 2.5% (previously 2.0%).

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Hutchison Port Holdings Trust: Volatile, but too cheap already

In our last report on Hutchison Port Holdings Trust (HPHT) dated 17 Jul, we expected a relatively weak 2Q18 set of results and encouraged investors to wait before collecting units. HPHT’s 2Q results were indeed weak and largely within expectations. Following the lowered DPU guidance by management, we expect share price softness today. The market treats HPHT as a proxy to trade tensions, and we continue to expect high volatility heading into the US mid-term elections. Nonetheless, we believe the stock is oversold. We currently place a 70% probability on HPHT’s YICT throughput falling 10% in 2019, an assumption we deem to be sufficiently conservative given that YICT’s outbound cargoes to the US only account for ~30-40% of its total throughput. After adjustments, our fair value drops from US$0.37 to US$0.36 which is 31% above 23 Jul’s close. Maintain BUY.

Sembcorp Marine Ltd

A depressed performance

SINGAPORE | OIL & GAS | 2Q18 RESULTS

 2Q18 revenue exceeded our expectation but net profit missed due to loss on the sale of a semi-submersible.

 Gloomy guidance for 2H18 due to low work volume and operating loss.

 Recent orders are all from the Floaters segment and order book is decreasing.

 We maintain our rating REDUCE with a lower TP of S$1.78, based on FY18e BVPS of SG$1.1 and the 5-year average PBR of 1.6x. It is worth mentioning that the historical PBR low was around 1.0x.

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First Sponsor Group

Eerste to the City of Freedom 

• Beneficiary of post-Brexit relocation to the Netherlands

• Building its recurring income portfolio with upside from completion of development properties

• Wild card from its growing third-party financing arm

• Initiate coverage with BUY; TP of S$1.62 on fully diluted basis

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RHB SECURITIES

DBS VICKERS

Singapore

Broad-based Pick-up In June Inflation

 Singapore’s CPI inched up to 0.6% YoY in June (Bloomberg consensus: +0.6%) from +0.4% in the preceding month due to a broad-based increase in overall prices of goods & services. Core CPI edged up to 1.7% YoY, from +1.5% in May.

 Overall, June numbers are consistent with our estimate for inflation to trend higher in 2H18. We expect Singapore’s CPI to rise to 1.3% YoY in 2018, up from +0.6% in 2017. However, domestic inflation will remain moderate, as retail rents have remained relatively subdued.

 After increasing the slope of S$NEER in April, we expect MAS to maintain the status quo in the next monetary policy review in October.

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Hongkong Land (HKL SP) : BUY

FY18 interim result preview

 Underlying profit is expected to be 2% higher with growing rental receipts

 Residential sales earnings should remain a key swing factor on earnings

 BUY with US$8.57 TP

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