| UOB |
MAYBANK |
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Plantation – Singapore 1Q18 Results Review: Production And Sales Volume Below Expectations
1Q18 results are disappointing. All the companies under our coverage, except BAL, reported weaker-than-expected 1Q18 results. This was mainly due to either lower-thanexpected production in 1Q18 or lower sales volumes (volumes to be delivered in 2Q18 instead). Production and sales volumes are likely to play catch-up in the subsequent quarters but overall sector performance will still be dragged down by a weaker CPO ASP and hence lead to lower earnings yoy. Maintain MARKET WEIGHT.
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Singapore Banks Scope For Liability Management
Rising FD rates; but remain POSITIVE As the 3M SIBOR, based on its 90-day moving average, has risen 30bps YTD, SGD customer cost of funds is likely to rise. More than a third of Singapore banks’ customer deposits in 1Q18 was in SGD: DBS 43%, OCBC 35% and UOB 44%. That said, as NIM should also expand with higher lending yields, this can help offset higher cost of funds. Remain POSITIVE on the sector, with catalysts still anticipated from NIM expansion, higher loan growth and fee income. Our top pick is UOB.
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| CIMB | CIMB |
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Keppel Corporation NDR feedback: Making ‘smart’ money
■ We recently hosted KEP’s CEO on an NDR in the US. We believe the company is a solid long-term investment candidate and is on track to regain shareholders’ trust. ■ We think Keppel Urban Solutions (KUS) could enjoy the same success as SSTEC, but on a smaller scale, with a faster turnaround time and focused on smart precincts. ■ O&M outlook is positive on sustained high oil price but we do not anticipate V-shape recovery. Operating leverage to improve on leaner operations and lower interest. ■ KEP Land is a proxy to ride the property cycle in emerging markets, with land bank for 61,000 homes, with ROE target of 12%. ■ We lift our EPS for FY18-20F by 5-10% on higher gains in property. Maintain Add and SOP-based TP at S$10.00. Catalysts are Kep O&M recovery and special DPS.
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Sembcorp Marine Production upcycle
■ We expect the latest Shell Vito contract to bring SMM’s YTD win to c.S$900m vs. our S$3bn target. The contract award includes installation of Shell-furnished equipment. ■ We estimate the contract to be c.US$300m with a high single-digit margin. ■ With this, SMM will have secured three major production-related contracts in the past six months totalling c.S$1.6bn. We keep our Add call and target price of S$2.52.
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| KGI | |
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Uni-Asia Group:
1Q18 results were in line with our expectations. 1Q18 net profitUni-Asia Group: 1Q18 results were in line with our expectations. 1Q18 net profitsurged 57% YoY to US$3.2mn net profit - making up 49% of our 2018 full-yearforecasts – on increased contribution from its hotels and property investments.Property and hotels profits rose 92% YoY to US$1.8mn, with its Japan investmentproperties rising 54% to US$1.8mn and as its hotel business reported a slightprofitability of US$0.2mn from a loss in the prior year period.We reiterate our BUY recommendation and fair value of S$1.81, based on thesum-of-the-parts (SOTP) valuation of its 3 business segments. Our TP is an implied0.5x FY18F P/B and 10x FY18F P/E. Uni-Asia is positioned to ride the growth in its 3business segments: 1) dry bulk shipping recovery, 2) completion of its 2nd /3rd HKproperty and investment into its 4th/5th HK property in 1H18, and 3) an increasein hotel rooms under operations ahead of two of the world’s largest sportingevents to be held in Japan – the Rugby World Cup 2019 and Tokyo 2020 Olympics.
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