ANALYSTS SAY: Buy, Sell, Hold (26 Jan '18)

Singapore Medical Group (SMG SP)

A Premier Healthcare Platform From Cradle To Grave

SMG has transformed into a premier healthcare platform that aims to capture a premium audience for its ecosystem which will serve patients from cradle to grave. As a proxy to emerging markets and a platform spanning a wide range of medical specialties, we expect 2018 to be a year to remember as SMG reaps the fruits of acute deals made in prior years. Initiate with BUY on this high-growth medical platform gem with a street-high target price of S$0.83.

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UOB: Re-rating giving its share price a boost

The recent re-rating of the banking sector has seen Asian banks enjoying higher valuations from the recent trough in 2016, especially Singapore banks which saw the main drag from the oil and gas sector in 2016. At the low, most Singapore banks were trading below historical 1x book, but bank stocks have since rebounded to about 1.4-1.5x currently. Outlook for the region is still fairly optimistic and we expect Singapore banks to be in a good position to ride this trend. We expect broad-based growth in both the Net Interest Income and Non-interest Income for 2018. Fee Income should also enjoy a boost from better Wealth Management earnings and Credit Card operations. We are projecting earnings growth of 10.8% in FY18 and 14.7% for FY19. With the recent re-rating, we have also raised our valuation peg to 1.3x FY18 book. This increases our fair value estimate from S$25.36 to S$30.10. We are upgrading our rating from HOLD to BUY.

Ascendas REIT

Operationally stable

SINGAPORE | REAL ESTATE (REIT) | 3Q18 RESULTS

 Gross revenue and DPU in line with our forecast

 Positive renewal rate in Singapore kept the Total Portfolio renewal rate positive, outweighing the negative renewal rate in Australia

 Slight dip in occupancy for both Singapore and Australia portfolios

 Proposed acquisition of speculative build property in Australia

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Golden Energy & Resources

On a Trajectory To Increase Production

We fine-tune our assumptions on coal prices and increase GEAR’s FY18FFY19F earnings by 8.3% and 3.5%, respectively. On top of that, we believe the company is on track to deliver FY18 coal production target of 18m tonnes (vs 14m tonnes in FY17). Maintain BUY with a revised TP of SGD0.68 (from SGD0.71. 42% upside), which implies our FY18F P/E of 13.1x. A key main catalyst is a sizable increase in earnings ahead due to the substantial increase in coal production.

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 MAYBANK KIM ENG

CapitaLand Commercial Trust (CCT SP)

Awaiting Better Entry Limited upside after stellar run; maintain HOLD

FY17 distributable income is in line, at 105% of our forecast. Reflecting a strengthening office market, rents ticked up sequentially in 4Q17. While we continue to see potential value creation from its active asset management of Asia Square Tower 2 and Golden Shoe Carpark’s redevelopment, we believe these have been priced in after its 30% runup over the past year. Maintain HOLD and SGD1.80 TP, still at a yield target of 5.00%. For exposure to Singapore’s recovering office market, we recommend developer landlords with large prime-office exposure, such as UOL and GUOL.

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