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MAYBANK KIM ENG |
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CapitaLand Mall Trust Good prospects from Funan
■ Positioned as Singapore’s first online-and-offline shopping mall, Funan has differentiated offerings to attract tenants and shoppers. ■ To date, it has received 60-70% signed and advance negotiation leases. ■ We believe Funan has no issue in filling up its occupancy. But we maintain our Hold call on the stock due to limited catalysts.
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Ascendas REIT (AREIT SP) Scaling Up in the UK
Meaningful add-on; BUY AREIT’s UK growth momentum has rapidly gained traction with a second larger portfolio acquisition following its first deal at end-July. These 26 logistics properties should deepen its geographical presence in the West Midlands, the UK’s largest distribution and warehousing hub. The positive asset attributes: (1) freehold land; (2) long WALEs of 9.1 years; and (3) high-quality tenancies which should strengthen AREIT’s overall portfolio profile. This deal was anticipated to follow its 7 Sep SGD452.1m equity fund-raising, and while marginally DPU accretive, reaffirms growth visibility in its overseas diversification efforts. We keep our forecasts unchanged as the deal is expected to be completed in FY3Q19 (Oct-Dec). Reiterate BUY to our DDM-based SGD3.05 TP (COE: 7.0%, LTG: 1.5%).
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| UOB KAYHIAN | UOB KAYHIAN |
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ST Engineering (STE SP) M&A Raises Value Proposition For Shareholders; Expecting 1.3 S cents EPS Accretion For 2019
We raise our fair value for STE to S$4.06 from S$3.80, the difference being the impact of incremental earnings contribution in 2019. Given the huge backlog on the Airbus A320 Neo aircraft, we are now more confident that it will more than offset the decline in production of the more mature nacelles. We also raise our 2019 dividend estimate by 1 S cent to 17 S cents and this provides a forward yield of 4.8%. We deem this attractive for an AAA-rated firm. Maintain BUY. Target: S$4.06.
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StarHub (STH SP) Benefitting From Change In Industry Dynamics
We have seen an improvement in execution at StarHub since Peter K took over the helm as CEO with effect from 9 Jul 18. Our channel checks suggest that customer service has improved. The permutation of possible scenarios has increased because: a) TPG Singapore will be spinned off, and b) Keppel and SPH could gain majority control of M1 through general offer at S$2.06. The valuation discount imposed on StarHub should be rightfully reduced. Maintain BUY and lift target price to S$2.10.
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CGS CIMB |
RHB |
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Chasen Holdings Ltd Record-high revenue in FY18
■ Chasen achieved record-high revenue of S$127.8m in FY3/18. Management is guiding for higher revenue in FY19. ■ The company expects to benefit from the relocation of factories outside of China and on-shoring of manufacturing in the US. ■ Chasen trades at a historical FY18 P/BV of 0.40x with dividend yield of 4.1%.
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United Overseas Bank
More NIM Widening From Rising FFR; Maintain BUY Reiterate BUY and SGD33.30 TP, 24% upside. The most critical catalyst is the rising US FFR trend – the FOMC raised the rate 25bps on 26 Sep and indicated the possibility of another four more hikes by end-2019. After July’s property cooling measures, subsequent good sales in new property launches should allay fears of slowing mortgage loan growth. We believe UOB’s plan for a digital bank will also be positive for long-term growth.
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