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RHB |
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ST Engineering (STE SP) Strong End To 2019; Reiterate BUY
Reiterate BUY, new SGD4.90 TP from SGD4.55, 17% upside with c.4% yield. ST Engineering – our country Top Pick – is well-positioned to deliver 10% profit growth in 2019-2022, aided by a record-high orderbook, contributions from new acquisitions, and through continuing investments to expand its capabilities in Aerospace and Electronics. The diversified, defensive nature of its business should enable STE to weather the nearterm impact of the COVID-19 outbreak. Continuing strong order wins and earnings-accretive acquisitions remain key re-rating catalysts.
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APAC Realty (APAC SP) Volumes Holding Up Despite COVID-19 Fears
Maintain BUY and TP of SGD 0.60, 28% upside with c.4% yield. FY19 net profit was slightly below our (93%) but met consensus estimates. Sales at new launches and the secondary market have so far been holding up despite fears of pullback due to the COVID-19 outbreak. Our base case assumption is that impact, if any, from COVID-19 would be short term in nature. We continue to expect recovery in both primary and secondary volumes. Dividend yield of c.4% offers downside support.
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| RHB | RHB |
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Raffles Medical (RFMD SP) Under The Weather; Maintain NEUTRAL
Maintain NEUTRAL, new TP of SGD0.96 from SGD1.02, 6% downside with 2.5% FY20F yield. Raffles Medical’s FY19 earnings are largely in line with our estimate. However, we have become more cautious on its nearterm outlook, as existing operations are likely to be impacted by the COVID-19 outbreak. The opening of the Shanghai hospital (RHSH) will also be delayed, until the situation in China normalises. We cut FY20-21F earnings by 14%/12%, which results in a lower DCF-derived TP.
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Singapore Medical (SMG SP) Steady 4Q19 But Clouded By Short-Term Uncertainty
Maintain NEUTRAL with a P/E-derived TP of SGD0.35, from SGD0.36, offering a 9.4% upside and c.3% yield. 4QFY19 revenue grew 16.5% YoY to SGD 25.9m on the back of an organic growth. FY19 revenue grew 11.3% YoY and hit a record SGD94.7m, driven by growth across Health and Diagnostic & Aesthetics (“D&A”) segments. Full-year PATMI of SGD13.7m, was up 5.7% YoY, exceeding our forecast by 5.8%. As such, we lift our earnings by 5-6% for FY20F-22F.
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