MAYBANK KIM ENG |
PHILLIP SECURITIES |
Far East Hospitality Trust (FEHT SP) Slow Quarter, Stronger 2H
In line; adjusting DPUs for slower recovery FEHT’s 2Q19 DPU of SGD0.91cts, flat QoQ and down 9.9% YoY, was in line with our expectations with 6M19 at 42% of our FY19E forecast. That said, we lower DPUs by 2-3% for a slower 2-5% (from 3-5%) 2019-20E RevPAR recovery. Still, we look towards a stronger 2H with a pick-up in demand. Our DDM-based SGD0.80 TP (COE: 7.4%, LTG: 2.0%) is unchanged (riskfree rate cut to 2.5%). We believe a hotel RevPAR recovery will be backed by tightening supply and continue to see upside potential from its higher Singapore RevPAR sensitivity and sponsor’s ROFR pipeline. BUY.
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DBS Group Holdings Ltd Last NIM Rally SINGAPORE | BANKING | 2Q19 RESULTS
2Q19 Revenue and PATMI grew 15.8% YoY and 20.2% YoY respectively. Exceeding our estimates by 4-5%. Stronger than expected 2Q19 NIM of 1.91%. NIM expanded 6bps YoY and 3bps QoQ as loans were repriced with higher interest rates in Singapore and Hong Kong. Loans growth slowed to 3.7% YoY, with an increase in non-trade corporate loans offset by the continued decline in housing loan growth. Declared a quarterly dividend of 30 cents per share. We forecast 2019 dividend of $1.20/share. Maintain ACCUMULATE at a lower target price of S$27.60. Our TP is based on target price-to-book of 1.4x, derived from the Gordon Growth model (long term ROE assumption: 12.5%, COE: 9.3% (Beta: 1.2x), Growth: 2.0%). We toned down terminal growth from 2.5% to 2.0%.
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UOB KAYHIAN |
CGS CIMB |
BRC Asia (BRC SP) Good Proxy To Singapore’s Infrastructure And Construction Upcycle
BRC has emerged as the largest supplier of steel products after a recent merger and is reaping synergies in procurement and operations. It is also benefitting from Singapore’s booming infrastructure and construction upcycle, with a healthy orderbook of S$750m. BRC’s recent dividend policy of at least 30% payout, or 5 S cents, demonstrates its commitment to shareholders and robust cash flow. Initiate coverage with a BUY and a target price of S$1.75, based on 11.5x FY20F PE.
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Sheng Siong Group 2Q19: Powering market share
■ SSG’s 2Q19 core net profit rose 7.5% to S$18.4m. 1H19 net profit of S$37.8m was a slight beat at 50%/49.2% of our/consensus’ FY19F forecasts. ■ Aggressive store bidding by SSG (tendered for 6 supermarkets) could raise the store count in FY20F. We lift our FY19-21F EPS forecasts by 1-4%. ■ We think SSG will be rewarded for its steady earnings and store growth amid market volatility. We upgrade SSG to Add with a higher TP of S$1.25.
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