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Food Empire Holdings (FEH SP)

Time For Re-rating On Outstanding Earnings Performance


We expect a re-rating on the back of strong earnings despite a challenging environment where Singapore consumer peers are suffering. The group’s aggressive stock buyback, mostly carried out in 4Q20 to Jan 21, underlines its confidence in its business outlook. We raise our 2020-22 EPS forecasts by 4-12% on the back of stable demand. At current price, the stock trades at a compelling 9.7x 2021F PE. Maintain BUY with an 8% higher target price of S$0.95.


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Singapore REITs Monthly

Recovering with the economy



 STI outperformed FTSE S-REIT Index in January, as investors rotated to cyclical sectors to tap recovery prospects. Biggest gainers were Industrial REITs, climbing 3.0% MoM. Healthcare was the biggest loser, pulled down by First REIT (FIRT SP, Not Rated) which shed 40.2% MoM due to its impending rights issue.

 Sector yield spread over benchmark 10-year SGS (10YSGS) was 303bps, at -0.7SD. More acquisitions expected in low-interest-rate environment.

 Remain OVERWEIGHT with sector catalysts expected from pick-up in economy activity, interest savings and acquisitions. Prefer Retail and Hospitality. Top picks are and Manulife US REIT (MUST SP, BUY, TP US$0.92) and Ascendas REIT (AREIT SP, BUY, TP S$3.61). These counters look attractive at current valuations and will remain resilient despite the weaker sector outlook, in our view.


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Fortress Minerals Ltd.

Ore production almost doubled this quarter



 3Q21 results were better than expectations. Revenue was up 150.9% YoY, PATMI up 477.9% YoY. 9M21 PATMI formed 77.5% of our FY21e forecast.

 3Q21 sales volume increased a stellar 93.8% YoY on the back of increased domestic demand for steel.

 Maintain BUY with a higher TP of S$0.47, up from S$0.28. We raise FY21e PATMI by 69.2% to capture its 3Q outperformance. Our TP remains pegged to 11x FY21e, the industry average. Catalysts are expected from a 50% jump in production in FY21e and iron ore prices (Platts Iron Ore Index, IODEX 65% Fe CFR North China) remaining above US$110/DMT. The company announced a proposed US$30mn acquisition of Malaysia iron ore and copper producer.


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Jiutian Chemical Group Ltd

Riding on DMF cyclical upswing


■ Jiutian is China’s second-largest DMF producer and is benefiting from favourable industry dynamics in FY20 which have boosted ASPs.

■ We expect Jiutian to report record net profit of Rmb199m in FY20F on the back of elevated DMF ASPs and lower raw material prices.

■ We initiate coverage on Jiutian with an Add rating as it rides on a cyclical upturn in DMF pricing. Our TP of S$0.145 is based on 5.7x FY22F P/E.


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LionelLim8.16Check out our compilation of Target Prices

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Counter NameLastChange
AEM Holdings2.3800.080
Avi-Tech Electronics0.265-
Best World1.7100.010
Broadway Ind0.095-0.001
China Sunsine0.390-
Delfi Limited0.9400.010
Food Empire1.4300.010
Fortress Minerals0.260-0.020
Geo Energy Res0.355-0.005
GSS Energy0.027-
Hong Leong Finance2.4800.010
Hongkong Land (USD)3.060-0.090
ISDN Holdings0.320-
IX Biopharma0.0460.005
Jiutian Chemical0.024-
KSH Holdings0.250-
Leader Env0.050-
Medtecs Intl0.1320.001
Nordic Group0.335-
Oxley Holdings0.0910.001
REX International0.138-0.008
Sinostar PEC0.135-
Southern Alliance Mining0.600-
Straco Corp.0.500-
Sunpower Group0.220-
The Trendlines0.085-
Totm Technologies0.021-
Uni-Asia Group0.800-0.015
Wilmar Intl3.330-0.030
Yangzijiang Shipbldg1.770-0.010

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