ANALYSTS SAY: Buy, Sell, Hold (2 Apr '18)

United Engineers

Overlooked, for now, but not forgotten

■ Strong asset backing with a sizeable portfolio of rental and hospitality assets.

■ Benefiting from the broadening office rental upcycle.

■ Potential unlocking value from low-hanging AEI opportunities within its portfolio.

■ Higher development carrying cost post PPA exercise, but projects remain profitable.

■ Maintain Add with a slightly lower TP of S$2.94.

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Tianjin Zhongxin Pharmaceutical Group Corporation (TIAN SP)

4Q17: Results Above Expectations, Anticipating A Stellar 2018

4Q17 profit beat expectations, surging 63.7% yoy and exceeding our 17 forecast by 4.5%. This is the first quarter where benefits from the long-awaited price hike for its key drug have kicked in, and results should sustain. In view of the: a) favourable industry outlook, b) ongoing price hike for TJZX's key drug, and c) fresh initiatives by the new management team, we anticipate a stellar 2018 and beyond. Maintain BUY with target price raised to US$1.66, pegged to peer average of 14.1x 2018F PE.

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Viva Industrial Trust: Extension of period of exclusivity

Last Friday, the manager of Viva Industrial Trust (VIT) announced that it has agreed with the ESR-REIT Manager to extend the period of exclusivity till the earlier of 30 April 2018 or the date of a definitive implementation agreement between the parties. Should an agreement on the merger be reached, we believe that the share swap ratio will likely be at least dividend-neutral in order to entice the VIT unitholders to accept the offer. On the other hand, should the relevant parties fail to reach an agreement, we expect the uncertainty associated with ongoing discussions to be alleviated, which may in turn help the unit price recover to prior levels. We maintain BUY on VIT with a fair value of S$0.93.

Singapore market monitor

Essential Bites – What we Learnt

Invest ASEAN 2018 – post conference takeaways

Fifteen Singapore companies attended our regional Invest ASEAN 2018 conference meeting with a cumulative c330 institutional investors in various group meetings over the two day event. While a bit tricky to aggregate the outlook for corporates spread across a disparate range of sectors, the mood amongst senior management from the attendees was generally optimistic, perceptibly more so compared to last year’s event, notwithstanding the macro issues of rising interest rates, inflation and the sabre rattling for a trade war. We highlight the key discussion points and takeaways from the corporate meetings in this note.

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