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CGS CIMB |
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China Aviation Oil (CAO SP) China’s Aviation Traffic Continues To Improve
Maintain BUY and SGD1.25 TP, 23% upside and 4.5% 2020F yield. We remain confident of China Aviation Oil’s return to earnings growth in 2021F. Amidst a gradual resumption of international flights and sustained recovery in domestic aviation traffic at Shanghai Pudong Airport, it could report decent earnings in 2020. The recent sharp rise in China’s jet fuel imports should also be positive for CAO’s cost-plus jet fuel supply business. The stock is trading below its net tangible assets per share (NTA/share) of USD0.95 (c.SGD1.30) and ex-cash 2021F P/E of just 2.7x.
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Grand Venture Technology Ltd Delivering precision & innovative solutions
■ Grand Venture Technology Ltd (GVTL) is an established manufacturing solutions provider that was listed on 23 Jan 2019 at an IPO price of S$0.275. ■ According to its IPO prospectus, the purpose of the listing was to facilitate the company’s growth. Only new shares were offered in its IPO exercise. ■ We initiate coverage on GVTL with an Add rating and target price of S$0.262.
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CGS CIMB |
UOB KAYHIAN |
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United Overseas Bank UOBM conference call takeaways
■ We had a conference call with UOB Malaysia’s CFO Chang Yeong Gung and senior economist Julia Goh to discuss business updates amid the MCO. ■ Strong collateral levels (c.80% of total loans) and strong sponsors should mitigate significant asset quality deterioration, but NIM headwinds persist. ■ Reiterate Hold on UOB Ltd, with a GGM-based TP of S$19.04.
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Banking – Singapore Well Positioned To Reward Shareholders With Sustainable And Stable Yields
MAS stated in Apr 20 that it does not see a need to restrict banks’ dividend policies and we do not expect MAS to make a U-turn in its stance. Singapore banks intend to maintain their CET-1 CAR within their comfort range of 12.5-13.5%. We expect any trimming of DPS to be manageable at 10% or less. Maintain OVERWEIGHT. BUY DBS (Target: S$26.22) and OCBC (Target: S$12.18).
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Check out our compilation of Target Prices