| MAYBANK KIM ENG |
UOB KAYHIAN |
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Far East Hospitality Trust (FEHT SP) Further Room For Growth
In line; best leveraged to SG hospitality recovery 3Q18 DPU was up 1.9% YoY and 4.0% QoQ, in line with our estimates. Our forecasts are unchanged. We see FEHT as providing the only pure exposure to a recovery in Singapore’s hospitality sector. Rising contributions from recently-acquired Oasia Downtown, a 5% YoY annual recovery in hotel RevPARs and a ramp-up of three Sentosa properties from 1Q2019 are expected to anchor its strongest 6% DPU CAGR in FY18- 20E. We see upside potential from its higher Singapore RevPAR sensitivity and sponsor’s ROFR pipeline. BUY to our DDM-based SGD0.75 TP (COE 7.7%, LTG 2.0%).
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Japfa (JAP SP) 3Q18: Strong Beat From Vietnam Swine And Indonesian Poultry
Japfa’s 3Q18 core net profit beat our street-high 2018 forecast significantly. 9M18 net profit met 95% of our and 105% of consensus 2018 forecasts. Core net profit soared 141% yoy in 3Q18 due to strong performances in three key segments: a) Vietnam swine business under the Animal Protein Other segment, b) Indonesia poultry, and c) dairy. We raise our 2018-20 core net profit forecasts by 6.6-7.1%. Accordingly, we raise our target price by 9% to S$0.98, implying 12.4x 2018F PE, a 16% discount to peers.
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| UOB KAYHIAN | RHB |
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Japfa (JAP SP) 3Q18: Strong Beat From Vietnam Swine And Indonesian Poultry
Japfa’s 3Q18 core net profit beat our street-high 2018 forecast significantly. 9M18 net profit met 95% of our and 105% of consensus 2018 forecasts. Core net profit soared 141% yoy in 3Q18 due to strong performances in three key segments: a) Vietnam swine business under the Animal Protein Other segment, b) Indonesia poultry, and c) dairy. We raise our 2018-20 core net profit forecasts by 6.6-7.1%. Accordingly, we raise our target price by 9% to S$0.98, implying 12.4x 2018F PE, a 16% discount to peers.
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Sheng Siong Higher Administrative Costs From 10 New Stores
Maintain BUY. We place our earnings forecasts and TP under review pending an analyst briefing on today. 3Q18 results announced yesterday slightly missed. Recurring PATMI of SGD17.8m was up 2% YoY, while 9M18’s earnings represented 71% of our full-year forecasts. While revenue growth and gross margin expansion were in line, administrative expenses ran ahead of our estimates on aggressive growth in store count. Our current TP of SGD1.30 is derived from a blended DCF valuation and target P/E of 21x.
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