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MAYBANK KIM ENG |
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CSE Global (CSE SP) Accretive Acquisition
CSE recently announced a major acquisition. It has entered into a membership interest purchase agreement to acquire Volta for US$25.1m (S$34.8m). This is CSE’s fourth acquisition this year and the largest in recent years. We estimate earnings accretion of 4.8% and 13.0% for 2019-20 respectively. Maintain BUY with a higher PEbased target price of S$0.65 (previously S$0.62) as we factor in earnings contribution from the acquisition.
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Wilmar International (WIL SP) Temporary crush
Crush margins to remain volatile; switch to FR Recall that WIL’s 2Q19 Oilseeds & Grains PBT fell 80% YoY on the back of weak soybean crushing margins. Thankfully, August’s Chinese crush margins rose sharply and so did palm-oil prices. Despite higher input costs, Indonesian bio-diesel margins have also remained positive. These combined should provide for a better 3Q19. Still, we remain cautious as: (a) significant risks exist from escalating trade-war tariffs at the start of the North American soybean harvesting season; and (b) an effective resolution of the African Swine Flu (ASF) remains elusive. Maintain HOLD. We prefer First Resources (FR SP, SGD1.48, BUY, TP: SGD1.80), which should benefit from rising palm-oil prices, its young acreage and low costs.
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DBS VICKERS |
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Singapore Land Transport Fare Review 2019 could see increase of up to 7%
• PTC has commenced its annual Fare Review Exercise; maximum allowable increase is 7% • Implementation likely to be in December, based on 2018 timeline • A mild positive for rail operations, but no impact on buses • Maintain HOLD on CD; public transport improvement could be negated by taxi fleet contraction and currency translation
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Check out our compilation of Target Prices
