| UOB KAYHIAN | MAYBANK KIM ENG |
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Sembcorp Industries (SCI SP) Modi’s Election Victory Could Accelerate PPA Awards Narendra Modi’s BJ party victory in Uttar Pradesh paves the way for them to secure majority control in the Indian Parliament. A majority representation would be a positive for continued efforts to reform the power sector. PPA awards could also accelerate, which would be beneficial to SCI’s SGPL plant. This would provide earnings visibility, though the earliest earnings pick-up is in 2018. SCI remains our preferred long-term utilities play. Lower target price to S$3.78. Maintain BUY.
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Singapore Economics Inflation Inches Up on Transport Cost, MAS Likely to Stay on Neutral Headline inflation edges higher on transport costs, while core inflation falls on moderating services inflation. Headline inflation rose to +0.7% in Feb-17 from a year ago (from +0.6% in Jan-17) on the back of higher private road transport cost (+7.1%) including petrol pump prices and Electronic Road Pricing (ERP) charges. Core inflation (which excludes accommodation and private transport) moderated to +1.2% in Feb-17 from the +1.5% in Jan-17.
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| OCBC | |
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Health Management Intl: Healthy growth momentum Health Management International (HMI) has a proven track record in management execution, developed an edge for themselves with a unique business model for their Malaysia hospitals and displayed consistent growth in core earnings. Amid a favourable sector outlook, we believe the group is on a healthy growth momentum, backed by a multistrategy approach grounded on broadening scope of specialties, expansion of facilities, capacity building, and efficiency initiatives. Regency Specialist Hospital will also start works on a new medical block extension that is slated to double its existing capacity when completed in 2020. In particular, the consolidation of its ownership in both hospitals is a positive move in our view, as it offers clarity to investors on earnings. We initiate coverage on HMI with a BUY and DCF-derived fair value estimate of S$0.80. |
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| CIMB | |
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■ Maintain Add and TP based on 13x FY18 P/E (c.16% discount to peer average).
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