| CIMB | UOB KAYHIAN |
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Perennial Real Estate Holdings Dragged by revaluations and impairment losses ■ FY16 net profit impacted by impairments and revaluation losses in China and Singapore. ■ Lower rental from Singapore due to lower occupancy with the start of AEI. ■ China earnings growth to be 2H loaded with the anticipated commencement of eldercare home business, likely in 3Q17. ■ Perennial International Health and Medical Hub is now 60% pre-leased, expected to start from 3Q17. ■ Maintain Add with slightly lower target price of S$1.08.
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Singapore Airlines (SIA SP) 3QFY17 Analyst Briefing Takeaways: Too Early For Optimism SIA’s longer-dated Brent hedges are at attractive levels close to spot, and this could give SIA a competitive edge if fuel prices rise substantially. However, both SIA and SilkAir’s yield declines worsened qoq, and cargo profits are not expected to be sustainable. For now, we will await clearer signs of lower airline capacity additions and further consolidation in the container shipping space for a meaningful recovery. Maintain HOLD with a higher target price of S$10.40. Suggested entry price: S$9.60.
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| OCBC | |
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Singtel: On track to meet our expectations Singtel’s 3QFY17 operating revenue fell 1.5% YoY to S$4.4b, impacted by its Australia consumer business (-9.8%) on decline in mobile termination rates, but partly offset by its stronger Singapore consumer business (+3.5%) and higher advertising revenue from its Digital Life business (+21.6%). 3QFY17 EBITDA was stable at S$1.2b but would have declined 2.2% in constant currency terms with heightened competition in Australia. Even after including 3QFY17’s exceptional loss of S$22m, NPAT grew 1.8% to S$973m while underlying NPAT rose 4.2% to S$994m driven mainly by a 6.1% growth in underlying profit contributions from its associates. For 9MFY17, operating revenue fell 3.6% YoY to S$12.4b due to rates change in Australia. EBITDA declined 1.6% YoY to S$3.7b mainly due to intense competition in Australia, but is within our expectations as it met 75.2% of our FY17 forecast. Underlying net profit grew 3.6% YoY to S$2.9b on stronger contributions from associates. Looking ahead, Singtel expects FY17 consolidated revenue to decline by low single digit while EBITDA should be stable. Capex is expected to remain at S$2.4b on cash basis and group free cashflow is expected to be ~S$1.5b. Pending more details from the analyst briefing later, reiterate BUY but with an unchanged S$4.27 FV for now. |
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| DBS VICKERS | |
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Frasers Hospitality Trust Hospitable outlook Enhance liquidity to boost investor interest. We maintain our BUY call on Frasers Hospitality Trust (FHT) with a TP of S$0.75. While FHT has a portfolio of quality of hotels in key gateway cities and has a successful acquisition track record such as the purchase of Sofitel Sydney Wentworth, investor interest at times has been muted. We believe the increased free float post the recent rights issue should help allay investor concerns about its trading liquidity, thereby compressing FHT’s yield over time. In the meantime, FHT offers an attractive 7.7% yield with earnings upside from acquisitions.
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