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OCBC |
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Manulife US REIT Staying resilient
■ MUST’s 1H20 DPU of 3.05 UScts, in line, at 49.8% of our FY20F forecast. ■ MUST enjoyed stable portfolio occupancy in 1H20 and expects to benefit from interest cost savings from debt refinancing starting 2H20. ■ Reiterate Add with an unchanged DDM-based TP of US$1.05.
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Sheng Siong Group (SSG SP) - A strong quarter; declares higher DPS
Sheng Siong Group’s (SSG) 2Q20 result was above our estimates due to stronger-than-expected sales. 2Q20 revenue rose 75.8% YoY to S$418.7m, while PATMI surged 150.4% YoY to S$46.1m, mainly attributable to elevated demand during the Circuit Breaker period as consumers loaded up on its products and goods. An interim dividend of 3.5 S cents per share was declared, as compared to 1.75 S cents per share in 2Q19. SSG opened 2 new stores in 1H 2020 and is expected to open 3 new stores in 2H 2020 in Singapore. With these additional stores, SSG’s total store count will increase to 66 (64 in Singapore and 2 in China). Looking ahead, we believe new stores growth will remain SSG’s key growth driver and strategy. We expect demand to taper off in 2H from the strong sales level in 2Q 2020, but demand should still remain healthy. We adjusted our FY20/FY21 earnings by +32%/13%, and our fair value increases from S$1.64 to S$1.85. With the sharp outperformance since March, and on valuation grounds, we are downgrading from Buy to HOLD. |
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OCBC |
CGS CIMB |
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Singapore Airlines (SIA SP) - Outlook remains hazy
Singapore Airlines (SIA)’s 1QFY21 results were significantly below Bloomberg’s consensus and our forecasts. 1QFY21 revenue fell 79.3% YoY to S$851m, dragged by sharp drop in passenger traffic and flown revenue, partially offset by improvement in cargo flown revenue. PATMI reversed from a profit of S$200m in 1QFY20 to a record loss of S$1.1b in 1QFY21 on the back of weak global travel demand and liquidation cost for NokScoot (S$127m). All passenger airlines in the group took a heavy hit from Covid-19 with operating losses ranging from S$102m (SilkAir) to S$667m (SIA parent) in 1QFY21. SIA expects passenger capacity to reach less than 50% of its pre-Covid-19 levels by end of FY21 and sees international travel to take a longer-than-expected recovery trajectory. With a prolonged Covid-19, we believe that earnings visibility remains low in the near-tern and expect 2-3 years for recovery to pre-pandemic levels. After adjustments, our fair value estimate decreases from S$4.00 to S$3.50. HOLD.
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AEM Holdings Ltd AEM ups FY20F revenue guidance again
■ AEM’s 1H20 net profit was above our expectation at 64% of our full-year forecast. ■ The company has raised FY20F revenue guidance again to S$460m-480m versus its May guidance of S$430m-445m. ■ We reiterate our Add call with a higher TP as we factor in the new guidance
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