| CIMB SECURITIES | UOB KAYHIAN |
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Sembcorp Marine Post NDR - hopeful on orders
■ We hosted SMM’s management for a non-deal roadshow (NDR) in Kuala Lumpur. We see the opportunity to accumulate ahead of positive newsflow on orders. ■ SMM is likely to achieve, if not exceed, our order target of S$3bn in 2018F, helped by sizeable production/gas projects, including Gravifloat (>US$1bn). ■ Operating leverage may only pick up in 2H18, but gross profit should improve in 1H18, without the kitchen-sinking provisions that were made in 4Q17. ■ Stronger-than-expected orders and potential write-back of provisions from Sete Brasil jobs are catalysts. Maintain Add and TP based on 20-year average of 2.5x P/BV.
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Property – Singapore On The Prowl For Land
Collective sales is on course to surpass that from the 2006/7 cycle as landbankstarved developers seek to re-plenish inventories, pricing in a 10-30% appreciation in property prices, amid limited options under the GLS programme (remained flat in 2018). Oversupply risk is under control with the enbloc pipeline well within the market’s absorption capacity (two years of supply). Displacement demand from enblocers and return of foreign buyers will be key drivers of the property upcycle ahead. Maintain OVERWEIGHT. City Developments and Wing Tai are our key picks.
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| OCBC SECURITIES | |
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CapitaLand Retail China Trust: Same… but different?
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Check out our compilation of Target Prices
