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MAYBANK SECURITIES |
MAYBANK SECURITIES |
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ELITE UK REIT (ELITE SP) Sustainable dividend yield backed by UK government
Defensive 9% yield; Initiate with BUY Elite UK REIT (ELITE) is a UK-focused commercial REIT with c.99% of rental income generated from entities associated with the UK government. We forecast distributable income to remain stable over FY26-28E, supported by its sustainable c.9% dividend yield, proactive lease renewals ahead of the 2028 expiry cycle and ongoing capital recycling initiatives. We initiate coverage with a BUY and TP of GBP0.44, implying FY26E dividend yield of c.9%. Risks to our call include higher UK interest rates, forex risk related to the UK pound and delays in asset divestments and weaker-thanexpected leasing demand for non-government tenants.
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Sanli Environmental (SANLI SP) A better FY27 ahead
Maintain BUY with a lower TP of SGD0.26 Sanli’s FY26 (ended Mar-26) revenue of SGD139.6m with PATMI of SGD2.2m was slightly below our expectation, mainly due to changes in progression milestones of certain engineering, procurement and constructions (EPC) projects, which could lead to delayed revenue recognition. We expect FY27E to be a better year but margins will likely be impacted by higher raw material prices and legacy project delays. We have reduced our FY27/28 earnings forecasts by 21% and 27%, respectively, and lowered our TP to SGD0.26 pegged to 15.5x FY27/28E P/E. With a substantial SGD748.1m order book, we maintain our BUY rating.
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| MAYBANK SECURITIES | UOB KAYHIAN |
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Sembcorp Industries (SCI SP) Deepening footprint
Expanding presence in UAE power project Emirates Water and Electricity Company (EWEC) has chosen SCI as one of the minority partners for a 2.6GW IPP project. The project is backed by a 29-year PPA and builds upon SCI’s long-standing partnerships in the region. The project is expected to be completed by 2029. We factor in recent operational trends in renewables and gas and related services resulting in 5-8% cut in our core PATMI but raise our TP to SGD6.0 as we roll forward our SOTP model. Maintain HOLD on back of limited earnings growth.
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CSE Global (CSE SP) Selldown Unwarranted; Fundamentals Intact
Highlights • One exit and three vacancies: CSE’s lead ID resignation leaves both ARC and NC chairmanships vacant. The replacement process is a key watchpoint. • CSE’s operating momentum remains intact, with revenue up 29% yoy and order intake growing 75% yoy to S$271m, with a robust orderbook of S$719m. • Maintain BUY with a target price of S$1.79. Expect a weaker 1H26 on new facility start-up costs; investors can look to accumulate further on weakness.
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| CGS INTERNATIONAL | |
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Banks Interest to return
■ Singapore has continued to observe capital inflow and growing loan demand in April, with average SORA QTD stabilising qoq. ■ As such, we believe SG banks’ NIM could expand in FY27F, which could lift NII while also enhancing ROEs. ■ Upgrade sector to Overweight as we see earnings upside from stronger NII, with DBS as our sector top pick given its superior FY26F yield of 5.2%.
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