Excerpts from DBS report

Awakening from September slumber
• 3Q results season picks – AEM, UMS, CAO, Thai Bev, CMT

400taxisPublic transport operator ComfortDelgro will benefit from more employees returning to work.• Vaccine and reopening air hub– SATS, SIAE, STE, FEHT, ART, CDL HT

• Towards Phase 3 – ComfortDelgro, KREIT, Suntec REIT, MCT, Lendlease, CMT

Mix of earnings, politics and medicine.

(1) STI trades at slightly above average PE as the 3Q results season starts. YE target is lowered to 2750 (from 2850) at 13.8x (+0.5SD) FY21F PE. We maintain that the worst of the earnings cuts has passed. STI likely touched a major low last month at our stated 2440 technical support,

(2) Biden’s average poll score has widened to a 9-pt lead vs Trump’s. A Biden victory would lift sentiment for Asian and Singapore’s small/open economy as he pledges to end the trade war with EU and reconsider China tariffs,

(3) The outcome of the first Phase 3 COVID-19 vaccine trials could be this month with more to follow in coming months. One or more positive outcomes followed shortly by approval for public use will be a major boost for the crippled travel sector.

Picks for upcoming 3Q results season

AEM revised its FY20 revenue guidance upwards to S$480-500m (from S$460-480m) in September.

UMS will benefit from the recovery in supply chain while demand for semiconductors remain strong.

cao planeChina Aviation Oil owns a 33% stake in SPIA, the sole supplier of jet fuel for the second largest airport in the PRC – Shanghai Pudong International Airport. Photo: CAO

China Aviation Oil benefits from China’s domestic air travel recovery to near/at pre-COVID levels. Strong demand from the October Golden Week holiday was an added lift.

We expect Thai Bev’s resilient revenue and EBITDA performance despite COVID-19 to continue into 4Q.

Watch CapitaLand Mall Trust given the strong rebound in traffic to c.82% and c.73% of pre-COVID levels for IMM and Plaza Singapura/The Atrium.


Look beyond a lacklustre 3Q results season and concerns of a second infection wave.

Anticipation of full-scale vaccine production next year and the gradual reopening of air space to include general travel going forward bode well for Singapore’s aviation and hospitality sectors.

Our picks are SATS, SIAE, ST Eng, Far East Hospitality Trust, ART and CDL HT.

At least five vaccine makers are looking to produce 500m to >1bn doses by end-2021 if approved.

Meanwhile, Singapore will look to reopen its air borders without the 14-day stay-home-notice while guarding against inbound COVID-19 risks.

Path towards New Normal.

Singapore will be progressively revealing more information about the transition into Phase 3 soon.

Beneficiaries are:
(1) Suntec Convention Centre’s capacity to hold large MICE events is positive for Suntec REIT, and

(2) Centrally located retail properties CMT, MCT and Lendlease, office REIT Keppel REIT and public transport ComfortDelgro will benefit from more employees returning to work.

Full report here. 

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Counter NameLastChange
AEM Holdings2.740-0.040
Avi-Tech Electronics0.2650.010
Best World1.780-0.030
Broadway Ind0.0870.003
China Sunsine0.380-0.010
Delfi Limited1.040-0.010
Food Empire1.410-0.040
Fortress Minerals0.250-0.010
Geo Energy Res0.410-0.005
GSS Energy0.029-
Hong Leong Finance2.5600.020
Hongkong Land (USD)3.3300.070
ISDN Holdings0.345-
IX Biopharma0.039-0.004
Jiutian Chemical0.026-
KSH Holdings0.2450.005
Leader Env0.053-
Medtecs Intl0.139-0.002
Nordic Group0.350-
Oxley Holdings0.092-0.001
REX International0.123-0.004
Sinostar PEC0.140-
Southern Alliance Mining0.585-
Straco Corp.0.515-
Sunpower Group0.210-
The Trendlines0.085-0.001
Totm Technologies0.025-0.002
Uni-Asia Group0.875-0.025
Wilmar Intl3.2600.020
Yangzijiang Shipbldg1.670-0.020

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