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UOB KAYHIAN |
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Jumbo Group Limited Time to tuck in
■ Stronger profit contributions from Jumbo’s Singapore outlets could offset the weakness in the China market in FY9/19-20F. ■ Jumbo is actively expanding its overseas footprint via JV and franchising too. ■ Jumbo may return to net profit growth in 4QFY19 as its Riverwalk store resumes operations. We resume coverage with an Add and TP of S$0.47.
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Office REITs ‒ Singapore
Tight Vacancies Cushion Impact From Macro Headwinds Macro headwinds have intensified. Office REITs took the precaution to renew office leases early. For their Singapore portfolios, CCT, KREIT and SUN have only 5%, 1.6% and 1.5% of office NLA due for renewals in 2H19 respectively. Tight vacancies and limited supply for Grade A offices within the core CBD have also cushioned the negative impact from macro headwinds. Downgrade to MARKET WEIGHT. We have HOLD recommendations for CCT, KREIT and SUN.
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MAYBANK KIM ENG |
RHB |
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AEM Holdings (AEM SP) Estimating hybrid project’s potential
Potential 26% upside to current TP; BUY We estimate the blended FY20-21E fair value of: i) potential contributions from its hybrid project for a key customer; ii) some frontloading of HDMT test handlers (TH) to FY20E; and iii) an expanded total addressable market (TAM) of HDMT TH, as its key customer introduces 7nm chips in 2021. Our ROE-g/COE-g fair-value outcome is SGD1.77, 26% higher than our current TP. We see positive revenue guidance as a catalyst while a sharp demand drop for its key customer’s chips is a key risk. Maintain BUY and ROE-g/COE-g TP of SGD1.40.
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Consumer Spending Drops On Possible Recession
Downgrade to NEUTRAL; Top Picks are Sheng Siong and Delfi. 2Q19 results were disappointing. Delfi, Genting Singapore (GENS) and Sheng Siong reported in-line numbers, while Food Empire and Thai Beverage (Thaibev) beat our estimates. BreadTalk, Dairy Farm, Jumbo and MindChamps underperformed our projections. We have since downgraded Thaibev to TAKE PROFIT from Buy, and it is no longer a sector top pick. Sheng Siong and Delfi remain the preferred picks for the sector.
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Check out our compilation of Target Prices
