| UOB KAYHIAN |
UOB KAYHIAN |
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NetLink NBN Trust (NETLINK SP) A Safe Haven, Stock Offers Sustainable Dividend Yield Of 5.1%
Residential connections are expected to taper off a high base in 1HFY20 with the completion of Starhub’s fibre migration programme. This will provide a stable 2HFY20 net profit base of S$20m/quarter and paves the way for a 5.1% dividend yield. The stock offers good earnings visibility. We raise FY20-22 net profit forecasts by 6%, 8% and 2% on positive operating leverage (90% of cost is fixed) and higher NBAP connections in view of the 5G roll-out. Maintain BUY with a higher target price of S$1.05.
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Wilmar International (WIL SP) 4Q19 Results Preview: Good Earnings To Provide Best Comfort To Investors
Wilmar is scheduled to issue its 4Q19 results on 20 Feb 20. We are expecting 4Q19 core net profit of US$350m-370m, bringing full-year core net profit to US$1.20b-1.21b, in line with our estimate but 3-4% above consensus forecast. Earnings were again supported by a resilient performance from tropical oils in 4Q19, while lower oilseeds and grains margins would have been well compensated for by good volume growth on early CNY demand. Maintain BUY. Target price: S$4.75.
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| MAYBANK KIM ENG | RHB |
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Venture (VMS SP) Venturing into a 2H20 recovery
Earnings inflection in sight; upgrade to BUY VMS’ customers appear more positive towards 2020 than 2019, from both company specific factors (e.g. new products) and their assessment of end-markets. As such, we raise FY20-21E EPS by 6-8% (broadly in line with FactSet consensus), and raise ROE-g/COE-g TP to SGD18.23, now based on 2.0x FY20E P/B (prev: 1.8x). Referencing history, sustained improvement in macro conditions may present upside risk to consensus EPS estimates. VMS is trading at an undemanding 12.7x FY20E P/E and 4% yield.
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Starhill Global REIT (SGREIT SP) Steady Quarter But Near-Term Headwinds Ahead
Maintain NEUTRAL with new TP of SGD 0.76 from SGD0.78, 6% upside. Starhill Global REIT’s flattish 2Q DPU came in line with our and market expectations. Revenue and NPI declined by 5% and 6% YoY respectively due to asset enhancement works but was largely offset by management fees in units as guided previously. While its Singapore retail portfolio is showing signs of a turnaround, we expect tenant sales to see a near-term hit due to the expected sharp slowdown of Chinese visitors.
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