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CGS CIMB |
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Singapore Telcos 5G: Warming up but still in neutral gear
5G frequency assignments in 1H20 Following the feedback on the 5G consultation process, the IMDA has indicated year-end for a call for proposal (CFP) from interested parties with the assignment of frequency and licenses by 1H20. In our view, it is still early days of development of the 5G ecosystem to expect commercial viability for the more advanced features and/or for 5G adoption to lead to some market price repair. Maintain NEUTRAL outlook. Netlink NBN Trust remains our key pick for shelter against the wireless price storm while StarHub has priced in industry fallout the most and offers value.
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Keppel DC REIT Time to click pause
■ Downgrade to Hold from Add with a TP of S$1.67 as positive industry fundamentals and potential catalysts have been fully priced in. ■ Occupancy stays at 93.2% and could go up upon completion of AEI at Dublin 2 while gearing was reduced to 31.9% due to partial repayment. ■ 2Q/1H19 DPU of 1.93/3.85 Scts (+6.0%/6.4% yoy) was in line at 24/48% of our and consensus’ FY19 forecasts due to acquisitions in FY18.
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UOB KAYHIAN |
RHB |
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StarHub (STH SP) Not Quite Out Of The Woods Yet
StarHub’s SIM-only plan Giga is an attempt to address a price-sensitive market not captured by its traditional distribution channel. We understand the take-up has been encouraging despite overall competitive pressure on mobile service revenue. Management guides flat to 2% yoy decline in top-line and EBITDA margin of 30-32% for 2019. We take a cautious stance as StarHub is susceptible to further price erosion given intense market competition. Maintain SELL. Target price: S$1.45.
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Oversea-Chinese Banking Corp (OCBC SP) Likely 2Q19 QoQ NIM Expansion But Priced In
Still NEUTRAL with unchanged SGD12.20 TP based on 1.12x 2020F P/BV, 6% upside plus 3.8% FY19F yield. This report spells out our expectations for OCBC’s 2Q19 results, which will be released on 2 Aug before trading hours. Expected 2Q19 marginal sequential growth for both loans and NIMs are positives, but these are largely priced in.
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Check out our compilation of Target Prices