ANALYSTS SAY: Buy, Sell, Hold (12 Sept 2017)

HRnetGroup Ltd (HRNET SP)

Positioned for Region’s Growth

In the world’s largest labour market HRnetGroup (HRnet) is one of the largest Asia Pacific-based recruitment companies outside Japan operating in 10 cities and serving over 2,000 clients across eight industry segments. Independent research firm Frost & Sullivan estimates the APAC region will be the largest labour market in the world and amongst the fastest growing too with recruitment industry revenues forecast to grow at 9.4% CAGR in 2016-2021.

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Sembcorp Marine

Adding work in Brazilian yard

■ YTD orders touched c.S$270m as SMM announced a US$145m hull carry over works contract from Tupi B.V. for the FPSO P-68 project.

■ The hull is an addition to the current contract that SMM secured in 2012 from Petrobras for the construction and integration of FPSO P-68.

■ We are keeping our S$1.5bn order wins target, hoping to hear of more offshore conversion/Gravifloat contracts.

■ Maintain Add and target price, still based on 1.5x FY17F P/BV, the average trading band in 1996-2003, a period of weak oil prices and pre-rig boom.

■ Contract wins and divesting of delayed rigs could be a key catalyst.

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Banyan Tree Holdings (BTH SP)

Sunny Turnaround Just Ahead

A global hospitality giant and born-and-bred Singapore brand, BT is executing a comprehensive strategy for a sunny turnaround. We believe the Accor and Vanke deals as well as its own internal improvements will bring about revenue growth, improved margins and a healthy balance sheet. This puts the BT turnaround story firmly in place with 35.4% 2016-19 EBITDA CAGR and deep book value. Initiate coverage with BUY and SOTP-based target price of S$0.93.

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Cache Logistics Trust: Trading at 7.7% FY18F yield

The ex-rights trading for Cache Logistics Trust’s (CACHE)

rights issue began last Fri and our ex-rights fair value estimate is S$0.78. Our fair

value in turn implies an intrinsic value of S$0.148 for the rights entitlements, given the rights issue price of S$0.632 per unit. The
commencement of trading of rights entitlements is scheduled to be 9am on 15 Sept, Fri. As mentioned earlier, we are positive on the
significant decrease in leverage though we believe that valuations for CACHE are not
compelling now. Against yesterday’s closing price,
CACHE is trading at a FY17F dividend yield of 8.1% and a FY18F yield of 7.7%. In terms of CACHE’s operational outlook, we remain concerned about the challenging industry conditions. While CACHE
has minimal renewal risk for the 2H17, ~21% of leases by gross rental income is up for renewal in 2018. CACHE’s debt headroom of S$218.1m,
however, does open up possibilities for yield-accretive acquisitions. We maintain our HOLD rating on CACHE with an ex-rights fair value of
S$0.78.

Singapore Property

Remedy for en-bloc fever?

• Sharp 13.8% hike in DC rates for non-landed residential developments could further reduce profitability by 1-4% for recent en-bloc transactions

• Larger en-bloc sites such as Serangoon Ville, Eunosville and Rio Casa could launch early to mitigate potential risks of ABSD and QC charges in the future

• Moderates en bloc momentum

• Picks UOL and City Dev

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