| PHILLIP SECURIITES | OCBC |
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Health Management International Heading for another leg up SINGAPORE | HEALTHCARE| INITIATION Increased capacity, stronger patient demand, and higher revenue intensity to boost revenue growth at 11.5% CAGR over the next five years. Quality medical services and improved economies of scale will lead to margin expansion. Robust margin coupled with consolidation of hospitals ownership could translate to 38.0% CAGR in PATMI over the next five years. Initiate with “Buy” rating and SGD0.83 TP, implying a 36.6% upside.
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Tat Hong Holdings: Competition remains keen Following Tat Hong’s latest quarterly results, we highlight that the group’s Tower Crane Rental division in China remains the bright spot, as the group saw higher utilization rates as a result from participation in new projects across several sectors such as commercial building, infrastructure, transport and power generation sectors While there have been sign of more infrastructure spending coming back, strong competition remains in the industry, particularly in their key markets, Australia and Singapore. For full year FY17, management expects results to be negatively impacted by likely impairments and on-going restructuring costs. The outlook for the group remains mixed across its business divisions with tower crane rental business as the steady performer, while we expect cost containment efforts to continue. We maintain our HOLD rating with an unchanged S$0.40 fair value estimate. |
| CIMB | |
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Wing Tai Holdings Turnaround in sight ■ Earnings are likely to trough in FY17 and resume upward trajectory from FY18. ■ Growth to be led by residential activities in Singapore, China and Malaysia. ■ Recurrent income base likely to be bolstered by the completion of the Shanghai mixed development by FY19. ■ Improved retail contributions underpinned by rationalisation exercise and better performance from Uniqlo. ■ Upgrade to Add with higher RNAV-based TP of S$2.05.
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| UOB KAYHIAN | RHB |
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Offshore & Marine – Singapore Sector Remains Cashflow-stressed; Clear Survivors Emerge FY16 saw impairments totalling US$1.7b, largely driven by small-mid cap OSV owners impairing the value of their assets. Shipyards saw a plunge in impairments and it appears the worst is over, contingent on orders returning strongly with oil price stability. A review of companies’ core margins highlights several candidates that will clearly survive the downturn. We downgrade Triyards to HOLD. Prefer asset owners like Ezion to play the recovery. Maintain MARKET WEIGHT.
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REITS The REITs Pulsebeat: Stay Selective We continue to remain cautiously optimistic on S-REITs despite threats of Fed rate hikes. We believe the sector has factored in two rate hikes this year, with the average yield spread being 30 bps higher than its 10-year average. S-REITs still offer the highest yields (average: 6.4%) as well as yield spreads among its global peers. We see room for yield compression as Singapore grows in stature as a REIT hub from a steady pipeline of REIT IPOs. We advocate a bottom-up approach in selecting REITs. Our Top Picks are Ascendas REIT, CapitaLand Commercial Trust and Manulife US REIT.
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