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OCBC SECURITIES |
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Valuetronics Holdings Ltd Seeking relief on tariffs and flood
■ We recently spoke to management on the impact of flooding and the trade war. No change to our forecasts and Add call, with attractive 6.9% yield. ■ Danshui plant has reopened, with production expected to gradually ramp up. ■ Impact of new tariffs could constitute no more than 10% of total revenue.
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Raffles Medical Group: Insurance tie-up with CTIG
Last month, RMG announced that the group has signed a MOU with China Taiping Insurance Group (CTIG) to jointly provide medical/ healthcare insurance solutions as well as healthcare management services and explore health-related real estate opportunities. In our view, this collaboration is a strategic and logical move for RMG, given the group’s existing clinics in China, as well as the upcoming opening of Raffles Hospital Chongqing and Raffles Hospital Shanghai in 4Q18 and 2H19, respectively. There should also be benefits to RMG back home as well, with CTIG looking at ways to proactively provide risk protection and services for Chinese businesses overseas. Separately, recall also that at the last National Day Rally speech, Prime Minister Lee Hsien Loong touched on a number of key points pertaining to healthcare in Singapore. Interestingly, RMG’s share price fell 4.7% the next day, despite the general policy direction at making healthcare more affordable for more segments of society. In our opinion, while the specific announcement pertaining to the establishment of 6 more polyclinics by 2023 might have been of some concern, the move is no surprise, given that a similar announcement was already made in the March 2018 Committee of Supply debate. As such, we think the new supply of healthcare provision has and should already been well internalized by the market. We maintain our FV estimate of S$1.26 for now. Maintain BUY. |
| RHB SECURITIES | PHILLIP SECURITIES |
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CapitaLand A Busy 2018 Thus Far; Maintain BUY
Maintain BUY, TP of SGD4.00, 19% upside. Despite a challenging global real estate landscape CapitaLand has been fairly active in capital recycling efforts this year, with ~SGD3.9bn in divestments/investments YTD. Its recent foray into US multi-family assets further diversifies its asset class and geographical exposure. The yield-accretive acquisitions should boost recurring income, and have the potential to be spun off into its fund management or REIT platforms. Dividend yield remains attractive, at 4%, and its share price remains well-supported by buybacks.
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Sembcorp Industries Ltd Renewing portfolio and a spark in India SINGAPORE | CONGLOMERATE | UPDATE
Singapore runs an integrated utilities facility with stable earning despite general weakness from the power segment. An additional source of income from the sale of renewable credit to Facebook Utilities’ China benefited from seasonality in 1H18. Utilities’ India is turning around due to improvement in the power market.
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Check out our compilation of Target Prices
