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Investment merits |
» CAPITALAND
Mkt Cap (USDm): 10,616
Last Close: 3.38
Target Price: 4.22
Upside (%): 25%
Rating: BUY
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• Improved capital allocation with focused "One CapitaLand" strategy.
• On track to deliver sustainable ROE of 8-12%, with high proportion of recurring income from investment properties.
• Catalysts: Growing contributions from investment properties under development or assets yet to stabilize. Capital recycling initiatives through sale of non-core assets.
• Key Risks: Slowdown in consumption growth and residential sales in key markets Singapore and China.
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» EZION
Mkt Cap (USDm) 1,098
Last Close 0.95 Target Price 2.10 Upside (%) 121%
Rating BUY
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• Earnings visibility from long-term charter contracts for its service rigs and stable renewal rates.
• Depressed valuations at <4x FY16F P/E despite 45% earnings growth this year.
• Catalysts: New contract wins and on-track deliveries of service rigs.
• Key Risks: Delays in rig deliveries |
» GUOCOLEISURE
Mkt Cap (USDm) 966
Last Close 0.97 Target Price 1.43 Upside (%) 47% Rating BUY
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• Proxy to London’s commercial real estate market via a 5000-room hotel inventory in prime, hard-to-replace locations.
• Overhaul and new branding strategy for hotel business under CEO Mike Denoma is bearing fruits, with accelerated earnings growth over next few years.
• Catalysts: Divestment of non-core assets, higher returns from the hotel business.
• Key Risks: Depreciation in GBP, delays in divesting non-core assets.
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» FU YU CORP
Mkt Cap (USDm) 150
Last Close 0.205
Target Price 0.30 Upside (%) 46% Rating BUY
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• We expect Fu Yu’s gross margins to improve significantly to a conservative 13.9% in FY15 from 12.2% in FY14.
• Growth from medical, environment and automobile products
• Fuyu generates steady cash flow of SGD20m-30m annually, and will continue to pile up cash.
• Catalysts: New customers, maiden dividend yield, low valuation
• Key Risks: Customers squeeze them on margins
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» FIRST SPONSOR
Mkt Cap (USDm) 758
Last Close 1.29 Target Price 1.55 Upside (%) 21% Rating BUY
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• Pre-sales from flagship project Millennium Waterfront Chengdu will underpin earnings for the next 2-3 years.
• High-margin property financing business with potential to grow loan book by another 50% to RMB1.5bn.
• Leveraging on strong balance sheet to execute bolt-on, yield accretive acquisitions in the Netherlands.
• Catalysts. Getting money lending license in China, more M&As in Netherlands.
• Key Risks: slower than expected sales in China.
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» IPS SECUREX
Mkt Cap (USDm) 146
Last Close 0.91 Target Price 1.01 Upside (%) 11% Rating BUY
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• Political instability around the region prompting increase in homeland security spending
• Pepperball contract providing a huge bump to earnings
• Catalysts: More Pepperball contracts
• Key Risks: Execution risk |
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