| MAYBANK KIM ENG |
UOB KAYHIAN |
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Ho Bee Land (HOBEE SP) Recurring-Income Boost
Raise EPS by 7-22% for acquisition; maintain BUY We raise FY18-20E EPS by 7-22% after incorporating Ho Bee’s recent acquisition of Ropemaker Place in the UK. This deal has put its conservative balance sheet to work and should enhance its recurring EBIT by 39%, in our estimation. The price paid appears reasonable, at a 7% discount to the vendor’s asking price and with yields at almost 50bps higher than prime office yields in the locality. We retain our TP of SGD3.30, still at a 30% discount to our revised RNAV of SGD4.74. Trading at a steep 50% RNAV discount, Ho Bee is the cheapest property developer in our coverage. Maintain BUY. Risks to our view include sharp falls in Singapore and London office prices.
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Plantation – Singapore Do Not Get Over-bearish On Palm Oil
The return of the US-China trade war has put pressure on US soybean, soybean meal and soyoil prices. The weakness of soyoil prices and weak export demand have dragged CPO prices down to a 2.5-year low. Thus, the weakening of CPO prices has led to the widening of PO-GO spread, and discretionary biodiesel demand is likely to increase. The higher biodiesel demand and potential switch from soyoil to palm oil in China could be positive to CPO prices in the longer term. Maintain MARKET WEIGHT.
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| OCBC | CIMB |
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ISDN Holdings Ltd Motion control solution specialist
■ ISDN has more than 30 years of experience in engineering solutions, with core strength in motion control systems. ■ 1Q18 net profit of S$5.2m represents 55% of FY17 net profit of S$9.5m. ■ Its net cash per share as at end Mar-2018 represented 25% of its share price on 19 Jun 2018. ■ ISDN has a 25% dividend payout policy and has been paying dividends for the past five years. ■ Management is positive on its long-term earnings outlook. ISDN trades at a historical FY17 P/BV of 0.55x against 85% yoy net profit growth in FY17.
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