CITY DEVELOPMENTS LIMITED C09.SI City Developments - Acquisition of remaining 50% stake in Nouvel 18
- City Developments (CDL) acquired the remaining 50% stake in Nouvel 18 from its JV partner Wing Tai Land Pte. Ltd. for an aggregate consideration of SGD411m.
- Nouvel 18 located at 18 Anderson road is a 156-unit freehold site and is within walking distance to Orchard road shopping belt. The site was acquired in 2007 for SGD477.7m (SGD1,650 psf ppr) and was completed in Nov 2014. No units has been sold till date.
NERATELECOMMUNICATIONS LTD N01.SI Neratel -1Q16 Results Flash Note
Highlights
- 1Q16 NPAT dropped 33.4% YoY, mainly due to sales declines in both Network Infrastructure and Payment Solutions business segments.
- Both top-line and profitability were also impacted by delays in a significant order from a customer and also a pull back in project implementation due to slow payment by a customer. However, all this will likely be completed and recorded in Nera's 2Q16 numbers.
OUEHT OUE HOSPITALITY TRUST SK7.SI OUE Hospitality Trust: 1Q16 Results Flash Note
Highlights
- 1Q16 DPS declined c.32% YoY, mainly due to rights issued in Mar. Stripping it off, DPS would have fallen c.9% instead.
- Its results were supported by its hotels, offset by the weaker earnings from its retail segment.
- Hospitality segment: RevPAR was up c.1% YoY.
- Retail segment: Ave. occupancy fallen to 83%, mainly due to c.13% of its NLA underwent landlord fitout works.
OXLEY HOLDINGS LIMITED 5UX.SI Oxley Holdings - 3QFY16 net profit a jump of 330% y/y
- Oxley Holdings (OHL SP) reported 3QFY16 net profit of S$51m, a jump of 330% y/y, bringing the group's cumulative profits for the nine months ended March 2016 to $132m.
- During the quarter, the group booked in profits from seven of its residential and mixed development projects in Singapore, as well as a $25.7m gain generated from the sale of its investment property, Chiba Port Square, in Japan.
- The group also declared an interim dividend of 0.4cents/share for the quarter.
STARHUB LTD CC3.SI StarHub - 1QFY16 Results Flash Note
Highlights
- Despite the 4% qoq slippage in 1Q16 service revenue (seasonality- induced), core earnings surged 23% qoq (+21% yoy) on stronger EBITDA (+17% qoq/+13% yoy) from good cost controls and steady depreciation.
- 1Q16 core earnings formed 27% of RHB/consensus estimates- we deem this to be in line due to diminishing NGN adoption grant and the subsequent normalisation of EBITDA margin from the high of 34% in 1Q16.
Ascendas REIT ASCENDAS REAL ESTATE INV TRUST A17U.SI Ascendas REIT: 4QFY16/17 Results Flash Note
- We make no change to our BUY rating, forecast and DDM-derived TP (CoE: 7.5%, Tg: 1.5%) of SGD2.63, FY17 dividend yield of 6.6%.
DAIRY FARM D01.SI Dairy Farm 1Q15 Interim Statement: Profit Recovery In-Line for Our Conviction BUY Call
- Dairy Farm issued their interim statement for 1Q16 (the company only announces half-yearly, but provides some broad outlook statement in the interim), which is broadly in-line with our expectations of a profit recovery in 2016.
SEMBCORP INDUSTRIES LTD U96.SI Sembcorp Industries - All For Utilities
- Sembcorp Industries’ utilities business would be its main earnings driver, with a visible pipeline of project deliveries unt il FY18.
- We think the current weakness in its marine business would be partially cushioned by its utilities segment.
- Maintain BUY and SOP-based TP of SGD4.00 (45% upside).
WILMAR INTERNATIONAL LIMITED F34.SI Wilmar - Challenging Market Perceptions
- The market is wrong, in our view. Wilmar’s share price has been trading within a band of SGD2.52-3.64 since 2012 but we think it is time to re-rate the stock due to the following reasons:
- The oilseeds crushing market has structurally improved;
- Its ability to tap on Chinese consumers’ desire for foreign goods;
- To harness the inherent value in the distribution chain;
- Favourable weather patterns.
SINARMAS LAND LIMITED A26.SI Sinamars Land - Deeply Undervalued
- Sinarmas Land is our Top Pick to ride on the cyclical recovery in Indonesia’s real estate market.
- We expect its FY16 recurring net profit to rebound by 29% YoY, on the back of higher marketing sales in its township projects in Greater Jakarta, as well as higher rental income.
- The stock, which has under-performed in the last year due to poor investor sentiment towards emerging markets, is deeply undervalued at current levels – its stake in BSD alone is equivalent to its current market capitalisation. Everything else comes free.
FU YU CORPORATION LTD F13.SI Fu Yu Corp - Top Pick across the manufacturing space
- We brought Fu Yu Corporation (FUYU SP), our top Pick across the manufacturing space in Singapore on a Non-Deal Roadshow yesterday and here are our key takeaways from it.
- Firstly, management indicated that more dividends likely to be given as long as retained profits and profits generated can support the payout.
- We have also discovered that the share buyback mandate to purchase up to 10% of its total share has been approved and management is in the midst of allocating its budget for the buyback.
CDL HOSPITALITY TRUSTS CDLHT J85.SI CDL Hospitality Trusts (CDREIT SP) - Further Headwinds Ahead
- We expect headwinds to persist for CDL
- Hospitality Trust (CDLHT) this year, mainly due to supply glut and weakness in the tourism sector.
- We maintain SELL with an unchanged TP of SGD1.14, which implies FY16 P/BV ratio of 0.68x.
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IPS SECUREX HOLDINGS LIMITED 41E.SI IPS Securex Holdings (IPSS SP) - Ready To Blast Off In FY16
- As political instability grows around the region, ongoing disputes in certain countries and increasing national security concerns have led to higher government defence budgets around the region. This puts IPS at an advantage to benefit from this situation.
- With such a bright outlook ahead due to additional potential incoming contracts, coupled with a potential special dividend in FY16F, we maintain BUY, with a SGD0.38 TP (23% upside) based on 7.2x FY16 P/E.
HO BEE LAND LIMITED H13.SI Ho Bee Land (HOBEE SP) - Fortune Favours The Brave
- We like Ho Bee for the steady execution of its strategy to grow recurring income.
- BUY with a SGD2.57 TP (29% upside).
- The group has now built up a steady rental income of c.SGD130m, and would benefit from a recovery in the high-end residential market via its remaining inventory in Sentosa.
- Management remains on the lookout to landbank opportunistically in Singapore, and has a strong balance sheet to expand with net gearing at 0.5x.
GLOBAL INVACOM GROUP LIMITED QS9.SI Global Invacom Group (RAD SP) - Gearing Up For a Turnaround In FY16
- We believe share price and EPS have hit rock-bottom and expect a strong FY16 turnaround on a demand surge from new satellite launches, cross-selling of products and new generation items, and Skyware’s turnaround.
- Maintain BUY with a SGD0.40 TP (167% upside, 10x FY16F P/E) on insider purchases and orders resumptions from major clients.
- Currently valued at 1.9x ex-cash FY16F P/E, the stock has also been way oversold.
FRASERS CENTREPOINT TRUST J69U.SI Frasers Centrepoint Trust (FCT SP) - Twinkle Twinkle Northern Star
- We handpicked FCT as our Top BUY within the SREITs sector, as we admire its suburban resilience and strong growth potential in both the short and long term.
- Maintain BUY and DDM-derived SGD2.22 TP (20% upside).
- Given its strong retail dominance within Northern Singapore, we expect the REIT to register positive rental reversion for both CWP and NP, which constitute more than half of the total renewals in FY16.
FIRST RESOURCES LIMITED EB5.SI First Resources (FR SP) - Top Pick For The Plantation Sector
- We believe El Nino’s impact on edible oil supply is likely to be one of the largest ever, given its current strength, and, as such, are raising our CPO price estimate to MYR2,700/tonne for 2016 (from MYR2,500).
- There is no change to our BUY recommendation on this counter, as it remains our overall plantation Top Pick.
- Our TP is at SGD2.69 (35% upside), based on 19x 2016F earnings.
EZION HOLDINGS LIMITED 5ME.SI Ezion Holdings (EZI SP) - Toughing Through These Trying Trough Times
- Ezion’s FY15 earnings are likely to be weaker YoY on some operating drag from eight vessels in dry-dock out of a fleet of 26 (as at Sep 2015).
- The company should see net increases in fleet utilisation as these dry-docked units progressively return to work by 1H16.
- Nine new units are to join the fleet to begin their long-term charters through FY16.
- The stock trades at a 40% discount to BV, even though it would deliver a decent 11% ROE in this trough year
DBS GROUP HOLDINGS LTD D05.SI DBS (DBS SP) - Anchored On Sound Fundamentals
- Reiterate BUY on DBS, with a SGD21.10 TP (28% upside).
- Its SGD34bn exposure to the broad commodities sector and SGD43bn China loan book remain in good shape, pointing to a manageable credit cost of 0 26bps for 2016F (2015F: 23bps).
- Underlying operations are steady with operating income forecasted to improve 7% YoY on decent 5% YoY loan growth, stable NIM and a 9% YoY rise in non-interest income.
- Its fully- loaded Common Equity Tier-1 ratio is at a comfortable 11.9%.
DAIRY FARM D01.SI Dairy Farm (DFI SP) - Banking On a Steady Growth Track Record
- We are cognisant of ongoing challenges in Dairy Farm’s operating environment, heading into FY16. However, the company has a track record of steady growth, with net profit never declining for two years in a row since 2000.
- In the meantime, current dividends are sustainable and would provide a cushion to its share price. Its investment into Yonghui could bring about a more meaningful entry into China.
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