Keppel Corp (KEP SP)
Asset Value Waiting To Be Unlocked
Maintain BUY and SOP-based SGD7.33 TP from SGD7.92, 23% upside, plus 4% yield. We like Keppel for its potential for prime landbank-value unlocking in China and Vietnam. Its O&M division would see recovery in contract flows, with FPSO conversion jobs expected to pick up in 2019, after securing SGD1.8bn of 2019 O&M orderbook YTD (exceeding SGD1.7bn for FY18).
City Developments (CIT SP)
Revised Takeover Offer For M&C
Remain NEUTRAL with an unchanged TP of SGD9.20, 8% upside and 2% yield. CDL’s revised takeover offer to acquire the remaining 35% stake and take full ownership of its London-listed subsidiary Millennium & Copthorne hotels (M&C) is likely to gain approval from minority shareholders. The move is a long-term positive and should help CDL to better reposition its ageing hotel assets but will also result in a significant increase in its near-term capex. We make no changes to our estimates, pending further updates.
|UOB KAYHIAN||DBS VICKERS|
REITs – Singapore
Potential Cut In Interest Rates If Trade Conflict Escalates
The FED will closely monitor the implications of trade negotiations and will act appropriately to sustain economic expansion. Yield for 10Y government bonds receded by 56bp to 2.12% in the US but remained unchanged at 2.04% in Singapore during 1H19. Our sensitivity analysis indicates that target prices of S-REITs will rise 5.1% for a 25bp drop in RFR. Maintain OVERWEIGHT.
Thai Beverage Public Company (THBEV SP) : BUY
Dominant regional beverage player in the making
• Affirmed regionalisation strategy during non-deal roadshow to Europe
• Strong cashflow support from Thai domestic spirits; growth from Myanmar and Vietnam
• Still targeting to be #1 beer brand in Thailand; NonAlcoholic Beverage to achieve EBIT breakeven by Sep 2020
• Maintain BUY and S$0.91 TP
Check out our compilation of Target Prices