| PHILLIP SECURITIES | MAYBANK KIM ENG |
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Firing On All Cylinders as Economy Improves Steadily SINGAPORE | BANKING | 2Q17 RESULTS Wealth Management fee income growth of 45% y-o-y was boosted by the acquisition of Barclay’s WM.
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Ascendas REIT (AREIT SP) Steady as she goes 1Q18 in line, best-leveraged to sector recovery AREIT’s 1Q18 results were in line with our estimates, with DPU of SGD4.05cts up 4.3% YoY and 5.3% QoQ. This was driven by its Singapore and Australia acquisitions and higher portfolio occupancy, while strength in its business parks and integrated development underpinned a +1.7% rental reversion against softer sector fundamentals. We have kept our forecasts largely unchanged. AREIT remains the best-leveraged industrial REIT play into a sector recovery, as the tapering-off of new supply in 2017 should benefit its well-entrenched business parks and hi-spec industrial properties. With debt headroom estimated at 14-27% of its market cap, we see DPU upside from potential acquisitions. Reiterate BUY with unchanged DDM-based TP of SGD2.90.
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| CIMB | |
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Sembcorp Marine 2Q17: Forex swing ■ 2Q17 net profit of S$5.6m missed our S$30m profit forecast due to S$34m forex loss and S$5.5m provision for JV. Excluding these, net profit would have been a beat. ■ Brazilian real has recovered post end-Jun; this could be a positive swing for 3Q17. ■ Management expects orders to be better than 2016 but not committing to S$2bn-3bn. (YTD:S$75m). We cut order target to S$1.5bn from S$2.5bn on conservative grounds. ■ FY17-19F EPS reduced by 14-16% to account for order cuts and provision for JV. ■ Maintain Add and target price trimmed to S$1.87, still based on 1.5x FY17F P/BV. Interim DPS of S$0.01 declared, representing c.46% payout. |
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| OCBC | DBS VICKERS |
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Sembcorp Marine: Hopeful of new orders
Sembcorp Marine (SMM) saw a 27.8% YoY drop in revenue to S$655.5m and a 51.2% fall in net profit to S$5.6m in 2Q17, dragged by foreign exchange losses of S$34.4m in the quarter. On a QoQ basis, revenue was 14% lower while estimated core net profit was higher at S$39.6m in 2Q17 vs. a core net loss of S$3.6m in 1Q17. Transocean has requested SMM to actively resume work for its two drillships, and has paid a further 5% on both units. As for rigs that have been technically completed and accepted but whose deliveries have been deferred, a number of new potential customers have emerged. Meanwhile, additional work scope requested by the customer for the P-68 FPSO may result in new work worth at least US$100m. The group has also declared an interim dividend of S$0.01/share, vs. S$0.015/share last year. After tweaking our estimates, our FV slips slightly from S$2.01 to S$1.98, but as we still see a 15% upside over a 12-month time frame, we maintain our BUY rating on the stock.
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CapitaLand Retail China Trust (CRCT SP) : BUY 2Q results in line, MZLY turnaround, bye-bye Anzhen
• DPU 2.62 Scts, 0.4% higher y-o-y; in line. • Minzhongleyuan coming out of the woods • Divestment of Anzhen at 13% higher than valuation – testament to the REIT’s premium to book • Raise TP to S$1.70 after rolling earnings forward
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