CIMB | OCBC |
Property Devt & Invt More collective sales on the cards
■ Normanton Park’s collective sale will be closely watched. ■ Site could yield 1,290 new units, with an estimated breakeven cost of c.$1,300psf. ■ Maintain overweight on developers; top picks: UOL, Capitaland, City Dev, Wing Tai. Normanton Park put up for collective sale ● According to Business Times, Normanton Park (NP) has been put up for a collective sale with a reserve price of S$800m. Located near Science Park and Kent Ridge, NP is a privatised housing estate originally built in 1977 on a 660,999 sq ft land parcel. It currently contains 488 apartments which can be rebuilt to potentially house 1,290 homes of an average 100 sqm floor area each. This will be the second attempt to sell NP since its failed first bid in 2015.
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Sembcorp Industries: Upgrade on valuation grounds
SCI’s management is currently in the process of undertaking a strategic review of the group’s businesses, and this is expected to be completed by 4Q17. There can be various scenarios which can happen, but we also note management’s comment that while it seeks to take a prudent approach in whatever it does, it also wants to be agile and capture opportunities when the market recovers. That said, whatever the results of the strategic review, we believe it will be done in the interests of shareholders. Meanwhile, since we downgraded our rating to Hold on 4 Aug, SCI’s share price has corrected by 7.2% compared to the STI’s 2.4% drop. The stock also closed at a recent low of S$2.94 on Monday. With the price correction, we now see a 15% upside (excl. dividends) from our fair value estimate of S$3.43 and upgrade our rating to BUY.
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ComfortDelGro Corporation Looking To Form a Strategic Alliance With Uber
What’s new ComfortDelGro has entered into an exclusive agreement with Uber Technologies to discuss the formation of a strategic alliance in Singapore. This may lead to collaboration in relation to the management of fleet vehicles and booking software solutions in Singapore. ComfortDelGro believes the alliance may help strengthen its position as a major mobility service provider in Singapore. Additional details on the potential alliance would be provided, once a definitive agreement is reached between the two entities. Although we foresee some benefits for both Uber (fending off rising competition from Grab) and ComfortDelGro (it could arrest the decline in fleet size and utilisation rate), the impact to the latter’s earnings can only be assessed once it provides greater clarity on the nature of the collaboration. Maintain BUY, with a SGD2.60 TP (20% upside).
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Patchy recovery
• 2Q17 results season : FY18F earnings cut 0.7%, positive revisions only for property and technology • STI - 3Q high seen at 3355 on PE valuation cap and macro uncertainties; downside to 3200, base case 3100 if correction extends • Yield stocks outperformed - MAGIC, FCT & Manulife REIT • Property stocks underpinned by enbloc newsflow • Top slice UOB
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Check out our compilation of Target Prices