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CGS CIMB |
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Synagie Corp Ltd Automating e-commerce for global FMCG brands
■ Synagie is one of the fastest-growing providers of e-commerce services in Singapore. It offers one-stop services to global FMCG clients such as Kimberly-Clark. ■ We expect Synagie to ride on robust e-commerce growth prospects; Frost & Sullivan projects online BBB industry in SEA to expand by 25.2% CAGR in 2017-22F. ■ Revenue growth drivers for Synagie could come from its expansion in other product categories, beyond its core BBB segment and outside Singapore. ■ Synagie currently trades below its IPO price of S$0.27 and at CY19F price-to-sales (P/S) ratio of 2.2x, a 60% discount to its global e-commerce peer average of 5.4x. ■ We initiate coverage on Synagie with an Add call and target price of S$0.34.
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Starhub Fortifying the cyber security business
■ StarHub’s move to merge its cyber security business with Temasek’s may put it in a stronger position to capture future opportunities in a fast-growing market. ■ Near-term earnings accretion may be mild. Marginal impact on net debt/EBITDA. ■ Maintain Add with an unchanged TP of S$1.85.
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| MAYBANK KIM ENG | OCBC |
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Singapore Property Subdued Bids Underscore Caution
First land tender to close after tightening; NEUTRAL Government land tenders for three residential sites - two private and one executive-condominium - closed yesterday. These are the first land tenders to close after further tightening property measures on 6 Jul. The subdued bids received underscore developers’ caution on the Singapore market and our caution on their stocks. Despite undemanding valuations, we remain NEUTRAL given overhang from policy tightening. For sector exposure, prefer UOL, CapitaLand and Ho Bee.
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OUE Limited: No land, no problem
As a recap, OUE’s recent 2Q18 revenue fell 19.6% YoY to S$150.6m, due largely to the absence of contribution from the development property division. All-in, PATMI fell 24.6% YoY to S$5.3m, which was affected by higher finance expenses on higher borrowings. With the AEI completed and asset stabilized, we believe that OUE Downtown’s offices could be a candidate for divestment to OUE Commercial REIT. With the potential for healthy rental reversions ahead, improving sentiment in the CBD office market and firm cap rates, we think that it makes sense for OUE to explore capital recycling at this point of the cycle. OUE had been cautious in its land bids as the group was concerned about thinning property development margins, even prior to the latest set of property cooling measures. In our opinion, this has turned out to be an astute move. Thus, we do not think that the depressed forward price-to-book multiple of 0.34x, which is a steep discount of 1.5 S.D. below the 5-year mean, is warranted. We maintain our BUY rating and our fair value estimate of S$2.25. |
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DBS VICKERS |
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Singapore Property New policies dampen GLS tenders
• Subdued interests seen in 2 GLS tenders, although EC site was well received. All 3 tenders closed yesterday. • New land owners – UE nabs first GLS landbank in a long time; CSC obtained site with fewest bidders; Hoi Hup and Sunway continue to acquire EC land sites. • Mixed indicators from land prices submitted but Dairy Farm site price 22% lower than Hillview Rise GLS site in May18. • Estimated breakeven prices close to average price of recent transactions in respective vicinities.
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Check out our compilation of Target Prices
