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UOL Group Strong Singapore core ■ Good take-up at the Clement Canopy and robust residential sell-through rate translates into S$1.05bn of locked in presales as at Mar 17. ■ Stable rental and hotel income to underpin recurrent income base. ■ Low gearing of 24% and capital redeployment into completed assets minimise development risks. ■ UOL remains our top pick amongst Singapore developers, TP intact at S$7.96.
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Thai Beverage (THBEV SP) The Awakening Giant THBEV’s performance is expected to be on an upward trend with expected earnings growth of 9% CAGR over FY16-19. The spirits business is expected to maintain its dominant market position while its beer business’ market share is expected to continue improving from the Chang beer rebranding. Initiate with BUY and SOTPbased target price of S$1.09.
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OCBC |
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Singtel: Industry outlook supportive of key growth drivers We remain positive over Singtel’s growing exposure to high growth areas – cyber security, digital marketing and data analytics. According to market watcher Gartner, worldwide spending on information security is expected to grow 7.6% YoY to US$90b in CY17 and reach US$113b by 2020. Gartner also expects worldwide business intelligence and analytics market to grow 7.3% YoY to US$18.3b in CY17, and reach US$22.8b by end of 2020. According to a survey conducted by Gartner, the top three specific digital technologies that are expected to have the most potential to transform organizations over the next five years are advanced analytics, internet of things (IoT) and digital security. Hence, we believe Singtel is well poised to benefit from these trends through its exposure to cyber security unit, digital marketing entity, and advanced analytics and intelligence. Given the impending IPO of NetLink Trust, we believe the potential special dividend arising from this would help limit investors’ downside risks. Given the aforementioned reasons, we reiterate BUY and S$4.25 fair value estimate on Singtel given its long-term growth prospects and resilient earnings on the back of its diversified portfolio of businesses. |
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First Resources Sustained By Decent FFB Output We believe it is time to lock in some profits for the sector, as we expect CPO prices to be on a downtrend from hereon, given the abundant supply coming into the market in 2H17, as well as the fourth bumper crop of soybean coming out of South America from April onwards. This is on top of the still-lacklustre demand from China and India. The wildcards are Indonesian biodiesel mandates and weather risks. We maintain our NEUTRAL recommendation. Our lower TP of SGD1.80 (from SGD1.90, 9% downside) implies an EV/ha of USD11,500/ha, in line with its peers.
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