CIMB | OCBC |
Property Devt & Invt Upward revision in DC charges
■ The higher development charges (DC) for Sep 17-Feb 18 imply a hike in total land cost. ■ Additional supply from en-bloc redevelopments to be felt in the medium term. ■ Maintain Overweight on the sector; our top picks: UOL, City Dev, Capitaland, Wing Tai. Higher residential development charge rates ● The latest development charges (DC) for Sep 17-Feb 18 show unchanged or higher DC rates for all property sectors. Whilst hotel and industrial rates remained unchanged from 6 months ago, non-landed residential rates jumped by a sizable average 13.8% over the same period, with the highest rise of 29% applied to the Tampines Rd, Hougang, Punggol and Sengkang areas, as a result of strong pricing during the recent en-bloc transactions.
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Singapore Airlines: Headwinds getting stronger
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UOB KAYHIAN | |
Alpha Picks: Updating Picks For September We add Wing Tai and Cityneon as our new conviction calls and remove ISDN.
WHAT’S NEW Reviewing August picks. Our alpha picks had a mixed performance in August. Tianjin was a standout performer, rising 13% mom in August, whereas Memtech was disappointing as the stock declined 5% mom. We keep our faith in Memtech as we expect near-term earnings momentum to remain intact with a potential dividend surprise when 4Q17 results are released. SATS was flat whereas Thai Bev declined 2.6% mom compared to the FSSTI’s 1.6% mom decline in August.
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DBS VICKERS | RHB |
Wilmar International (WIL SP) : HOLD
Takes 50% stake in Aalst Chocolate • Wilmar acquires 50% equity stake in Aalst Chocolate, a Singapore-based manufacturer of premium chocolate • Acquisition done via purchase of shares from existing shareholders and subscription of new shares • Financial terms not disclosed, likely to be funded internally • Synergies with Wilmar’s sugar business, deepening Wilmar’s foothold in downstream consumer products, maintain HOLD and TP of S$3.52
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Manulife US REIT Another Bite Of The “Big Apple”
Manulife US REIT (Manulife) announced its second acquisition, 10 Exchange Place (Exchange) in New Jersey from its sponsor. The freehold Class A property is well located, with prominent frontage along the Hudson river waterfront and offers excellent connectivity to New York city. It’s pro-forma (FY16) NPI yield of 5.7% has upside potential from rental growth as average rents are well below market. The acquisition further diversifies its portfolio both geographically and in terms of tenant mix. Funding would be via rights issue and debt. Maintain BUY and TP of USD0.98, with a 13% upside from theoretical ex-rights price of USD0.87.
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Check out our compilation of Target Prices