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OCBC |
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First REIT Attractive yield
■ 3Q/9MFY18 results were slightly below our projection. ■ New acquisitions underpin revenue growth, gearing of 34.9% provides debt headroom for inorganic growth opportunities. ■ Upgrade to Add from Hold, TP tweaked down slightly to S$1.36.
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Singapore Airlines: Are we in a crisis like 2008?
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| UOB KAYHIAN | PHILLIP SECURITIES |
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DBS Group Holdings (DBS SP) 3Q18 Results Preview: Double-digit Growth In Net Interest Income
We expect DBS to achieve 16% yoy growth in net interest income due to NIM expansion of 13bp yoy and a sequential recovery in net trading income due to wider spreads as a result of increased volatility in regional currencies. Higher income helped DBS absorb the pick-up in credit costs. We forecast net profit of S$1,386m, up 3.9% qoq and up 72.8% yoy (3Q17 was a low base on huge provisions for exposure to the O&G sector). Upgrade to BUY with a new target price at S$29.50.
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Keppel DC REIT Portfolio remains stable SINGAPORE | REAL ESTATE (REIT) | 3Q18 RESULTS
3Q18 revenue was 5.3% higher than expected, due to higher rental top up which is recognised periodically 3Q18 DPU was 4.1% lower than expected, due to Capex Reserves set aside for KDC SGP 3 and KDC SGP 5 9M18 revenue and DPU met 79% and 73% respectively, of consensus FY18 expectation Maintain Accumulate; unchanged target price of $1.45
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DBS VICKERS |
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StarHub
What is the street missing out? Street FY19F/20F earnings projections have bottomed out. The street is overly concerned about profitability of new businesses and under estimating the magnitude of cost savings over FY18- 20. The street is also missing out on an annual cost savings of ~S$30m due to shutdown of StarHub’s co-axial cable network after 2020. Besides, the street is not paying attention to potential network sharing which may further boost free cash flow. StarHub is attractive near -2SD of its historical EV/EBITDA and PE average and offers sustainable yield exceeding ~5.5%.
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Check out our compilation of Target Prices
