Excerpts from DBS report

Analyst: Alfie Yeo

The easing of social distancing measures from April will boost Singapore-listed stocks exposed to the domestic consumption story.

•  Social distancing measures to ease from April

•  Anticipate livelier economic activities as more people return to the workplace

•  Stocks exposed to domestic consumption expected to benefit

•  Maintain BUY for CD, Koufu, SSG and DFI

More relaxed social distancing measures. Singapore’s COVID-19 multi-ministry task force is raising the work-in-office cap to 75% and split teams are no longer needed from 5 April.

Changes include the allowance of social and recreational gatherings organised by employers but limited to eight people, increased capacity limits for marriage solemnisations, wedding receptions and live performances, pilot business-to-business events approved by the Singapore Tourism Board, piloted seated spectator sports, wakes and funerals.

Expect pick-up in economic activities. This relaxation of social distancing rules allows for more economic activities to take place. F&B dining and public transport demand is set to increase as the workforce returns to workplaces and more events take place.

Our anticipated recovery scenario for F&B is right on track while grocery demand is set to normalise. With Changi and tourist arrivals still lacklustre, tourist-dependent plays would take a longer time to recover to pre-COVID levels of operations.

Positive for CD, Koufu, SSG, DFI. We are positive on ComfortDelGro (CD) for increased public transport usage, especially on taxi rental rates and Downtown Line (DTL) demand.

We are also positive on Koufu as the workforce returns to office. Kiosks and food courts at office buildings and malls will benefit from higher footfall.

About 9% of food courts are in office buildings and around 30% are in malls.

SS montage 1
Grocery retailers’ valuations remain attractive despite anticipated tapering of grocery demand.

Dairy Farm’s (DFI) core forward price-to-earnings (PE) is <10x after stripping out the value of Yonghui and Robinsons Retail Holdings Inc, while Sheng Siong Group (SSG) is priced attractively at 20x forward PE, below our target PE of 25x.

We are negative on JUMBO as tourists have yet to return to Singapore in greater numbers, which may still take some time to return to pre-COVID levels.

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Counter NameLastChange
AEM Holdings2.480-0.020
Best World2.4700.020
Boustead Singapore0.955-0.005
Broadway Ind0.1390.012
China Aviation Oil (S)0.9500.010
China Sunsine0.410-
Delfi Limited0.9250.005
Food Empire1.360-
Fortress Minerals0.320-
Geo Energy Res0.325-0.010
Hong Leong Finance2.490-
Hongkong Land (USD)2.990-0.050
ISDN Holdings0.3100.005
IX Biopharma0.052-
KSH Holdings0.250-
Leader Env0.049-0.001
Ley Choon0.044-0.001
Marco Polo Marine0.0690.003
Mermaid Maritime0.1470.010
Nordic Group0.365-
Oxley Holdings0.090-
REX International0.1460.002
Southern Alliance Mining0.485-
Straco Corp.0.4950.005
Sunpower Group0.220-
The Trendlines0.070-0.002
Totm Technologies0.025-
Uni-Asia Group0.820-
Wilmar Intl3.5400.010
Yangzijiang Shipbldg1.770-0.050

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