|UOB KAYHIAN||PHILLIP SECURITIES|
Memtech International (MTEC SP)
3Q17 Results Preview: To Have Performed Well
We expect Memtech to post a decent 3Q17 performance. We are optimistic on Memtech’s outlook with: a) output from China’s factories growing at the fastest pace in five years, b) EVs taking centrestage as fossil fuel cars are set to be phased out, and c) Tesla Model 3 demand to exceed 700,000 units/year. Memtech benefits from Tesla’s production surge and positive Beats sales. Maintain BUY with a higher target price of S$1.33, pending the results release.
City Developments Limited Putting the cash hoard to good use
Privatisation to be RNAV-accretive, if the deal goes through. Our revised RNAV will be S$15.90 per share. Post-acquisition, M&C will make up 27% of CDL’s total GAV.
Offer price, despite a 24% premium to last close price, offers attractive value for CDL as it is pegged at 0.7x P/BV. And the hotels are valued at cost in the books.
Potential selling price for a new project on Amber Park en bloc site suggests a 38% upside from current market prices in the vicinity.
City Developments Limited: Possible offer for listed hotel subsidiary
|MAYBANK KIM ENG|
Singapore Post Ltd (SPOST SP)
SingPost Centre to deliver technology-enabled experience
Healthy occupancy rate on opening
SingPost opened its new retail mall, SingPost Centre on 9 Oct 2017, after 2 years of redevelopment. This has doubled its gross retail floor space to 269k sf and net lettable area to 178k sf. It has achieved a healthy occupancy rate of 80.4%, helped by its convenient location, next to Paya Lebar MRT interchange station. The mall also highlights SingPost’s embracement of how technology is changing the retail landscape. We expect an additional rental income of SGD22m, which translates to c.SGD13m earnings at steady state of 90% occupancy. For FY18E, SingPost Centre should contribute SGD3m of earnings (3% of total) and SGD13m of earnings (10% of total) for FY19E. Maintain HOLD and DCF-based TP of SGD1.22, pending clearer direction from the strategic review of its business strategy. Risks: weaker traditional mail and e-commerce drag.
Check out our compilation of Target Prices