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UOB KAYHIAN |
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China Sunsine Chemical Holdings Key takeaways from China visit
■ We visited Sunsine’s production facilities last week, and were impressed by the high automation and environmental protection standards adopted. ■ Slight delay to planned 20kt rubber accelerator capacity expansion, but longer-term development plan intact with 680 mu land secured. ■ Near-term pressure remains, with 3Q19F results likely to be weak due to lower ASP. Maintain Hold and TP of S$1.10.
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Alpha Picks: Outperformed In 3Q19; Add Yangzijang
While the FSSTI retreated 6.1% in 3Q19, our alpha picks gained 2.0% in the quarter, led by our small/mid-cap picks (Fu Yu: +11.5%, Koufu: +5.8%) and our short call on SATS (-11.2%). For September, our portfolio rose 0.9% mom, surpassing the FSSTI’s gain of 0.4% mom; notable outperformers for the month were Fu Yu and CDREIT. For October, we add Yanzijiang as we believe the recent share price weakness is unwarranted and it is currently trading at an inexpensive valuation of 0.56x 2019F P/B.
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DBS VICKERS |
RHB |
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Singapore Property Storm in a teacup
• Coworking is here to stay with financially stronger operators likely to survive • Coworking has been driving office demand in past few years; absorption of new office supply now in question • CCT most exposed to WeWork and coworking operators; there is time to restrategise • Stocks with minimal exposure to coworking operators are UOL and Keppel REIT (KREIT)
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Fu Yu Corp (FUYU SP) Still Top Pick Despite One-Off Expenses
BUY this small/mid-cap manufacturing Top Pick, TP of SGD0.24 implies 9% upside with 8% FY19F yield. Fu Yu recorded a steady 1H19, as PATMI grew 10.7% YoY. Despite a one-off expense of SGD5.5m from the closure of its Shanghai plant, we expect continued revenue and margin expansion on new projects in the auto, consumer and medical spaces. As over 80% of revenue is in USD, it should also benefit from the strengthening of the greenback.
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Check out our compilation of Target Prices
