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Banking – Singapore Good Tidings Of Comfort And Joy
Our survery of regulations around the globe indicates a transition from blanket restriction to a bank-by-bank assessment in regulating dividend policy in 2021. It is not a question of whether restrictions of dividends will be eased, but a question of when. Assuming MAS does not interfere with banks’ dividend policy, we expect DBS (BUY/Target: S$26.75) and OCBC (BUY/Target: S$13.48) to provide dividend yields of 4.3% and 5% for 2021F and 5.2% and 5.6% for 2022F respectively. Maintain OVERWEIGHT.
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City Developments (CIT SP) 3Q20 Business Update: Profit Warning Largely Expected
CDL released its 3Q20 business update and a profit warning that was generally in line with expectations. Its Sincere investment in China and its hospitality arm remain drags on the overall business. Meanwhile, Singapore property development and its office portfolio remain reasonably resilient in our view. Maintain BUY. Target price: S$9.20.
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UOB KAYHIAN |
DBS VICKERS |
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BRC Asia (BRC SP) FY20: Building Up For A Strong Rebound. Upgrade To BUY With 38% Upside
BRC’s FY20 net profit of S$20.4m was in line with expectations, although full-year dividends of 6 S cents came in ahead of expectations. Core operations in construction saw a sequential recovery, with gross margins impressively holding up despite lower construction activities. Gross margins will likely remain solid, given the group’s bulk purchasing abilities since its acquisition of Lee Metal. Upgrade to BUY with target price of S$1.88 as we raise our FY21-22F earnings forecasts by 60%, on the back of solid margins and recovery of construction activities.
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Singapore Hospitality Waiting for lift-off
• Travel plans back on the cards in 2021; strong pent up demand from leisure to drive a “V-shaped” recovery • Some business travel disruption as companies adopt more virtual meetings but we expect most corporate travel should resume • Based on a 4-year normalization trend, we project hospitality S-REITs to post 4-year DPU CAGR of 17%-30% • Our picks are ART and CDLHT for their attractive valuations
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Check out our compilation of Target Prices
