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Singapore Press Holdings Defensive investing in student housing
■ SPH acquired S$321m of UK PBSA assets; portfolio decent with 6.3% net initial yield and adjustment mechanisms for downside protection. ■ Acquisition offers an estimated 6% accretion to FY17 core earnings, and increases net gearing slightly to 0.41x, based on our forecasts. ■ We believe media rejuvenation is still a priority for SPH, with cash-yielding assets as its new growth engine. ■ We expect more acquisitions to come for greater scale. Retain Add with unchanged EPS forecasts and TP. The stock offers 10.8% upside including 5.5% yield.
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SG Industrials: Stick with the winnersSG
We are now reaching the third quarter mark of this year and it is worthwhile to take stock of companies under our coverage so far. In our local conglomerates/yards space, all stocks (KEP, SCI, SMM, YZJ) are down YTD, with more volatility seen for YZJ and SMM. YZJ has rebounded 34% from its trough in mid Jul to current levels, and another outperformer since mid Jul has been SCI (up 14%). Among transport-related names (ComfortDelgro, SIA, SATS, SIA Eng), all are down YTD except for ComfortDelgro, which is up 14%. Investors looking for names with good dividend yields and some growth prospects over the long term as well could consider ComfortDelgro which offers a 4.6% yield at current levels, as well as SATS (3.6% yield) which have been increasing their dividends over the years. SIA and SIA Engineering also offer dividend yields of 4.2% and 4.4% based on last year’s dividend figures, but we note that there is less consistency in comparison. |
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CapitaLand Commercial Trust (CCT SP) : BUY
HSBC extends lease for only one year • HSBC has signed a one-year extension at 21 Collyer Quay • Renewal rents are 36% higher; one-year extension indicates HSBC's intention to vacate in 2020 • But ample time for CCT to backfill the space or maximise value through redevelopment or disposal of the property • Maintain BUY, TP of S$2.12
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