| MAYBANK KIM ENG | CIMB |
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Singapore Post Ltd (SPOST SP) Site Visit of New Logistics Hub Enhanced capacity & efficiency to cater for growth We attended a site visit hosted by SingPost to showcase the capability of its new regional eCommerce Logistics Hub. We walked out positive on the increased capacity and efficiency, which could offer greater value propositions to customers regionally. Key takeaways: 1) SingPost can stay ahead of disruption by being more efficient, offering more flexibility and upskilling its people; 2) Strengthened collaboration with Alibaba provides a common platform to grow eCommerce logistics capability. Maintain BUY and DCF-based TP of SGD1.77 (WACC 8.7%, LTG 1%). |
SIA Engineering No super dividend despite super cash ■ 2Q17 core net profit was below expectations. 1H17 net profit formed 40% of our FY3/17 forecast and 34% of Bloomberg consensus. ■ We were negatively surprised by the interim dividend cut to 4Scts (1H16: 6Scts), given the completion of divestment gain from HAESL. Net cash stood at S$508m. ■ Pending analysts briefing, we maintain Add and target price based on DCF valuation. |
| OCBC SECURITIES | |
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Frasers Logistics & Industrial Trust: Off to a good start
Outlook still robust Maintain BUY with slightly higher S$1.10 FV Frasers Logistics & Industrial Trust (FLT) reported its maiden results for the period since its listing on 20 Jun 2016 to 30 Sep 2016. Gross revenue of A$43.1m and DPU of 1.84 S cents came in 0.8% and 2.8% higher than its forecasts as disclosed in its Prospectus, respectively. FLT’s occupancy rate stood at 99.2%, as at 30 Sep 2016, versus 98.3% initially during its IPO. The valuation of its portfolio increased A$24.4m, or 1.5% since IPO, to A$1,677.7m, as at 30 Sep 2016, with its portfolio cap rate compressing slightly from 7.00% to 6.96%. Looking ahead, the low interest rate environment in Australia, population growth and infrastructure spending by the government are expected to drive tenant demand for industrial space. We reiterate our BUY rating on FLT with a slightly higher fair value of S$1.10 (previously S$1.09). FLT offers investors a compelling FY17F distribution yield of 7.0%, backed by its defensive portfolio WALE of 6.6 years and good quality assets.
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| DBS VICKERS | UOB KAYHIAN |
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StarHub Lower grant could hurt earnings StarHub will see moderate impact from potential entry of a new mobile player. We project a 7% drop in industry-wide mobile revenues between 2015 and 2022, while the new entrant could capture 7% of revenue share. With only c.50% of revenues coming from mobile and due to more fixed-mobile-TV bundling, StarHub will be less impacted than M1. We expect StarHub’s mobile revenues to decrease by 15% (8% drop in total revenue) and earnings to contract by 16% in 2022 versus 2015.
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Wilmar International (WIL SP) 3Q16 Results Preview: Performance Should Be Back On Track Wilmar is expected to announce its 3Q16 results on 10 Nov 16 after market close, and we are not expecting any negative surprises. We estimate 3Q16 core profit at US$350m-400m (vs 3Q15’s US$359m). Oilseeds & grains should swing back to profit as per guidance given during the 2Q16 briefing in Aug 16. Higher contributions are expected to come from Tropical oils (better margins) and Sugar (crushing season started). Maintain SELL. Target price: S$3.05.
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Check out our compilation of Target Prices
