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MAYBANK KIM ENG |
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CapitaLand Commercial Trust Forging ahead with AEIs and acquisition in Germany SINGAPORE | REAL ESTATE (REIT) | 2Q19 RESULTS
2Q19 NPI and DPU in line with our estimates. Positive rental reversions ranging 4.4% to 27.5% above the average expiring rent. Outlook positive as leases expiring in 2019/20 are below current market rents. 2 AEIs, seven-year lease of 21 Collyer Quay to We Work and acquisition of Main Airport Centre in Frankfurt, Germany announced. Maintain NEUTRAL, higher TP of S$2.18 reflects our downward revision of COE from 6.76% to 6.34% due to the lower interest rate environment, and incorporates higher revenues from AEIs, new shares from placement, and the proposed acquisition of MAC.
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Venture (VMS SP) Silver Linings Playbook
2Q19 may miss; but maintain BUY Looking past 2019E, multiple levers of growth appear intact and VMS is a beneficiary of the US-China trade war, as around 85% of production is outside China. However, 2Q19 may miss amid customers’ product transitions, and a potential share price fall may provide an even more attractive entry. History suggests the stock is well supported at longterm mean dividend yield of 5.3%, which implies SGD13.20 on FY19E basis. We await 2Q19 results to reassess our forecasts. Maintain BUY and ROE-g/COE-g TP of SGD19.74 (based on 2.2x FY19E P/B).
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CGS CIMB |
RHB |
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Banks 2Q19F preview: NIM growth at their peaks
■ A normalisation in trading and wealth management income is likely to weigh on 2Q19F earnings but repricing efforts should raise NIMs 1-2bp qoq. ■ Forward guidance on NIMs (pending Fed rate cut), growth (-ve trade noise), wealth strategy (HK unrest) and capital management will drive share prices. ■ Maintain Neutral. Bank valuations are supported by benign credit conditions but catalysts are limited. Our preference is for UOB, OCBC, then DBS.
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ComfortDelGro (CD SP) Positive On Long-Term Outlook
Maintain NEUTRAL and DCF-based SGD2.65 TP, 5% downside. We remain confident of CD’s earnings growth, aided by contributions from recent acquisitions, and its public transport unit’s growth. Any reduction in Singapore rail losses amidst higher transport fares or government grants received could lift earnings and our TP. We leave our estimates unchanged as details have been sparse. We like the defensive nature of CD’s earnings. Still, the stock looks fairly priced – trading at 18.3x 2019F P/E (5-year average: 15 x).
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