| OCBC | CIMB |
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SG Hospitality: A closer look at Chinese visitors growth An important driver of demand growth last year, Chinese arrivals by air have nonetheless shown a trend of increasingly modest growth numbers from the start of 2016. This, coupled with a relatively more robust growth seen in Chinese arrivals by land, has resulted in the latter now making up a more substantial proportion of total Chinese travelers. One possible explanation for the above may be an ongoing change in flight patterns from China to the region in the past three years. All-in-all, 2017 looks to be another tough operating year with the supply injection and moderating growth in Chinese arrivals, but presents a good opportunity for dollar-cost averaging. We are positive on OUE Hospitality Trust (OUEHT) [BUY; FV: S$0.73], Ascott Residence Trust (ART) [BUY; FV: S$1.24], and CDL Hospitality Trusts (CDLHT) [BUY; FV: S$1.48]. Maintain NEUTRAL on the sector. |
China Aviation Oil Charting new heights ■ CAO is a well-backed, integrated supplier and trader of jet and other fuels, with strong baseline net profit driven by China’s burgeoning international aviation market. ■ Further capacity enhancement in Shanghai Pudong airport and expansion in global markets, especially the US, could propel earnings further. ■ We initiate with Add and target price of S$2.00, based on 13x CY18F P/E (c.20% discount to peer average CY18F PER of 16.6x). ■ Stock offers net cash/share of 23.4 UScts and CY17F yield of 2.7%, on a balance sheet that has negligible debt, giving it freedom to capitalise on M&A opportunities.
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City Developments Watch Out For Acquisitions In 2017 CDL’s share price has rebounded 7% YTD outpacing the STI Index. We expect outperformance to continue with acquisitions acting as the key rerating catalyst. Its UK portfolio (11% of assets) is also set to receive a boost from better-than-expected performance of UK economy. We further expect a higher recurring income with the South Beach mixed development becoming fully operational. Maintain BUY with a higher TP of SGD9.70 (from SGD9.40, 10% upside). CDL remains our Top Pick.
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| UOB KAY HIAN | DBS VICKERS |
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Raffles Medical Group (RFMD SP) Chugging Along Steadily Raffles Medical Group (RFMD SP) Chugging Along Steadily Our recent visits to RMG’s Medical Centres at Orchard and Holland V suggest that these facilities are tracking expectations and would complement its Singapore presence. We make no change to our 2016-18 estimates (3-year EPS CAGR of 13.9%) and re-iterate BUY with a DCF-based target price of S$1.70 (maintained).
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CNMC Goldmine Holdings (CNMC SP) : BUY 4Q16 hiccup a minor blip CNMC expects to report net loss for upcoming 4Q16 results Losses due to unrealised forex losses and decline in revenue from lower ore grades Beyond this blip, we remain optimistic of CNMC’s earnings outlook in 2017 Maintain BUY; TP of S$0.65
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