| MAYBANK KIM ENG |
CGS CIMB |
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Ascendas REIT (AREIT SP) A Strong Start
In-line quarter, adjusting for recent deals; BUY AREIT delivered a strong 1Q19 with core DPU up 4.0% YoY, in line with our estimate and slightly ahead of the street. We fine-tuned estimates to adjust for its recently announced deals. We continue to see AREIT as the best proxy to recovering sector fundamentals given its concentrated business parks and high-specs portfolio. Following its UK entry, we see further momentum on portfolio diversification efforts to drive upside to our 3.8% 3-year DPU CAGR estimate. Valuations based on our DDM SGD3.05 TP (WACC: 7.0%, LTG: 1.5%) remain undemanding given its scale, liquidity and visible growth strategy. BUY.
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| PHILLIP SECURITIES | OCBC SECURITIES |
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Land Transport Sector Taxi turnaround in sight SINGAPORE | TRANSPORT SERVICES | UPDATE
Maintain Overweight on the Land Transport sector, on the positive industry restructuring and the worst being over for the Taxi industry Maintain Accumulate on ComfortDelGro; unchanged target price of $2.69
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Singapore REITs: Increase defensiveness among defensives
We have pushed back our expectations for a pick-up in Singapore hotels’ RevPAR from this year to early 2019, following the latest set of results. We are wary of the ongoing competitive pressures from the new hotel supply. As we now expect relatively muted DPU growth outlook for 2H18 as well as the rising interest rate environment, we find hospitality REITs less attractive than before in terms of valuations. As such, we have downgraded a number of the hospitality REITs under our coverage during this earnings season. We recommend investors to seek more defensive shelter in their investment approach towards the REITs sector. We believe REITs with strong balance sheets, long WALEs and/or exposure to more resilient sectors such as suburban retail would fit in our selection criteria. As such, investors holding hospitality REITs can consider switching into Frasers Centrepoint Trust (FCT) [BUY; FV: S$2.49]; Frasers Logistics & Industrial Trust (FLT) [BUY; FV: S$1.21]; Keppel DC REIT (KDCREIT) [BUY; FV: S$1.54] and Mapletree North Asia Commercial Trust (MAGIC) [BUY; FV: S$1.42]. Overall, we maintain NEUTRAL on the S-REITs sector. |
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UOB KAYHIAN |
RHB SECURITIES |
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Wilmar International (WIL SP) 2Q18 Results Preview: Seasonally Weak 2Q Will Not Happen This Year
Wilmar will announce its 2Q18 results on 13 August after market close. We expect Wilmar to deliver a net profit of US$260m-290m. Key trends to look out for are a better contribution from the sugar division due to higher milling sales volume, better oilseeds & grains PBT margins, and the contribution from tropical oil is expected to be better in 2Q18 on the back of higher sales volume and contribution from biodiesel. Maintain BUY. Target price: S$3.90.
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Singapore Medical Attractive Defensive Option
Maintain BUY as SMG is one of the rare few players likely to deliver strong PATMI growth of 40% in FY18F. With the Singapore government keeping a close eye on rising healthcare costs (especially in the private sector), amid a challenging operating environment medical sector players – especially those in the small- to mid-cap space – have de-rated to an average of 21.5x P/E from 25x P/E. As a result, we lower our DCF TP to SGD0.56 from SGD0.68, offering 30% upside, backed by the new small- to mid-cap healthcare sector average of 21.5x.
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Check out our compilation of Target Prices
