| CIMB | UOB KAYHIAN |
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Memtech International 2Q17 preview: gaining yoy, qoq strength ■ MTEC will report its 2Q17 results on 10 Aug, after market close. ■ We expect MTEC to record yoy and qoq improvement in its 2Q17F core net profit, vs. 2Q16’s net loss of US$1.5m and 1Q17’s earnings of US$1.7m. ■ AU and CE to drive double-digit revenue and earnings growth with better margins. ■ MTEC remains as one of our tech top picks in Singapore, given its technical knowhow, healthy financials, multi-year earnings growth and 3-5% dividend yield. ■ We raise our FY17-19F EPS by 0.8-4.7% and our TP to S$1.16; maintain Add.
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Sembcorp Industries (SCI SP) 2Q17: India Aside, Core Utilities Earnings See Sustainable Improvement SCI reported 2Q17 core net earnings of S$133.6m, within expectations. The earnings improvement stemmed from a better-than-expected performance from Singapore. Urban Development land sales momentum remained strong. A turnaround in India is expected to take another 2-3 years to pan out. The strategic review remains on track for completion in 4Q17 and hints at a focus on utilities. Reduce 2017-19 earnings forecasts by 2-14%. Maintain BUY with a lower target price of S$3.57.
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| OCBC | |
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DBS: 2Q net earnings of S$1.13b was below consensus DBS posted 2Q17 net earnings of S$1.13b, +8% YoY and -9% QoQ, but this was slightly below market expectations of S$1.16b based on a Bloomberg poll. Net Interest Income showed a 3% YoY and QOQ improvement, but Non-interest Income fell. Allowances also came off to S$304m, down from S$550m in the previous quarter 1H17 net earnings amounted to S$2375m, +5% YoY. Net Interest Margin (NIM) held steady at 1.74%, same as the last quarter. However, NPL ratio edged up from 1.4% in 1Q17 to 1.5% in 2Q17. In line with its peers, Wealth also performed well, contributing S$245m in 2Q17, up from S$222m in 1Q17, and making up 34% of total Fee & Commission Income. Management has declared a 1H dividend of 33 cents, up from 30 cents last year. We will provide more details after the briefing later in the morning. We currently have a HOLD rating on the stock.
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| PHILLIP SECURITIES | MAYBANK KIM ENG |
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A new era through partnerships SINGAPORE | REAL ESTATE (HOSPITALITY) | INITIATION Potential 9c/share gain on disposal of China assets provide upside to dividends. Initiate coverage with BUY rating and S$0.77 target price, implying a 36% upside.
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CapitaLand (CAPL SP) A Solid Print Maintain HOLD and SGD3.75 TP Driven by active portfolio reconstitution and fair value gains, CAPL reported a solid 89% increase in headline net profit for 1H17. We deem core earnings as in line. Strong China performance continues to be the pillar of strength for the group with residential sales and operating statistics at the malls outperforming Singapore. 1H17 ROE of 5.5% is on track to meet its 8% target this year. With a mere 2% asset exposure to Singapore’s residential market, we believe CAPL is not a proxy to an impending home price rebound in the country. Maintain HOLD and SGD3.75 TP, based on 29% discount to RNAV of SGD5.25
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