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MAYBANK KIM ENG |
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ISOTeam (ISO SP) A Good Start Into 2020; Stay BUY
Keep BUY and DCF-based SGD0.31 TP, 35% upside with 2% FY20F (Jun) yield. ISOTeam has finally completed the long-awaited acquisition of Pure Group (Pure), as well as taking over the assets in Singapore Mobike. The company has also proposed 84m in new ordinary shares, with an aggregate of 50m placement shares allocated at SGD0.24 per piece.
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Singapore Banks The great ASEAN migration
SG banks may win from ASEAN supply chain shifts Our research suggests that Chinese supply chains relocating to ASEAN is intensifying, catalysed by trade war uncertainties and woes in HK. This is driven by MNCs and large/mid Chinese corporates as they look to hedge supply risks and overcome tariffs. We think they will look for regional banking counterparties with strong balance sheets and access to USD funding. The SG banks offer this. Their better regional integration and wide suite of tech-enabled services should also put them ahead of domestic ASEAN banks. UOB will benefit the most, followed by OCBC given their larger ASEAN footprint and operational integration.
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| UOB KAYHIAN | OCBC |
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Thai Beverage (THBEV SP) Curbing Vietnam’s Enthusiasm
A new drink-driving law in Vietnam has dampened expectations in the high-growth market for Thai Beverage, with local reports of beer sales being heavily affected since the new regulation was enacted on 1 Jan 20. We see more severe effects for Sabeco if Vietnam’s regulatory rules encompass wider public restrictions. Maintain HOLD and SOTP-based target price of $0.90. Entry price: S$0.75.
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CAPITALAND COMMERCIAL TRUST (CCT SP) | ACCEPT THE OFFER
BIG IS BETTER - 4Q19 DPU +2.7 YoY - Cap rates compressed by 5 bps for office assets - Proposed merger with CMT a positive
Office rentals in Singapore continue to gain traction, albeit with growth moderating. This is especially pertinent for CapitaLand Commercial Trust’s (CCT) predominantly Grade A CBD Core asset profile. CCT has a strong sponsor in CapitaLand Limited, which has a 29% stake in the trust. It also has a diverse tenant mix, with no particular sector constituting more than 20% of the total portfolio. |
Check out our compilation of Target Prices
