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Singapore Year Ahead 

Rainbow Rising


2020 was chaos, but it also birthed opportunities Bad things happened in 2020. We choose to look for positives instead. What happened in the pandemic that improved the long-term prospects of the sectors we cover? We see ‘Rainbows’ as industries digitalize, integrate ESG, innovate with enabling technologies and leverage Singapore’s unique hub status. These should provide opportunities to enhance long-term returns and improve earnings visibility. In the near term, 2021E could remain volatile, gyrated by massive liquidity, regional uncertainty and vaccine logistics. While we increase exposure towards growth and value (esp. amongst mid-to-small caps), we are also keeping a weighting towards defence. Top Picks: AEM, AREIT, CD, FR, FRKN, MLT, SGX, ST, VMS and WIL.


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HRnetGroup Limited

Green shoots emerging


■ Flexible staffing in high demand as employers adopt leaner business model.

■ Asian recruitment companies’ shares rebounded 29.2% CAGR on average post previous crises (non-Asian peers: 10.6-26.8% CAGR on average).

■ Reiterate Add with higher TP of S$0.64 as hiring activities accelerate postCovid. Net cash (zero debt) of S$286m (end-Jun 20) and c.4% dividend yield.


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1H21 Market Strategy: Reopening And Recovery


We are optimistic that the STI will perform well in 2021, given that COVID-19 vaccines may potentially come to the market in 1H21. This comes on the back of our 53% yoy EPS growth estimates for our coverage universe for 2021. With reasonably strong balance sheets, Singapore corporates are well placed for the recovery. In our view, STI valuations are not stretched at present, trading at 2021F PE and P/B of 14x and 0.96x respectively and paying a 4.3% yield. Our year-end 2021 target for the STI is 3,180.


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Singapore Retail REITs

Defend and conquer


• Selected retail S-REITs with “dominant malls” to emerge as winners in the new retail normal

• Capturing the locals’ outbound expenditure can more than compensate for the lack of tourist spend in 2021

• Landlords may benefit as retailers’ ongoing consolidations may be an opportunity to “right-size” tenant exposures

• Top picks are CICT, FCT and LREIT for their “dominant malls”; CRCT for its attractive pipeline


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LionelLim8.16Check out our compilation of Target Prices

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