| UOB KAYHIAN |
CGS CIMB |
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CDL Hospitality Trust (CDREIT SP) 3Q18: On The Cusp Of A Singapore-led Recovery
CDREIT’s 3Q18 DPU came in below expectations, declining 4.8% yoy. The Singapore portfolio was dragged by renovations at Orchard Hotel and price competition from new hotel incumbents. Japan and Germany properties saw a stronger quarter, aided by local regulations on AirBnB and a stronger calendar of events respectively. Australia, New Zealand and the UK saw weaker contributions, challenged by weaker currencies and calendar of events. Maintain BUY with a lower target price of S$1.83.
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Japfa Ltd 3Q18: Poultry and swine stay on course
■ 9M18 core net profit (US$74.3m) was slightly above, forming 82%/80% of our/consensus (US$90.7m/S$92m) FY18F net profit. ■ Drivers of the improved net profit came from higher EBIT margins for the poultry division and lower interest costs. ■ We lift FY18F net profit by 4.1% but maintain FY19-20F on our conservative margin forecasts. Maintain Add with an unchanged SOP-based TP.
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| MAYBANK KIM ENG | OCBC |
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Starhill Global REIT (SGREIT SP) Weak Fundamentals, Yield Support
In line; prefer FCT We keep forecasts unchanged following in-line 1Q19 DPU of 1.15 SGD cts, down 4.2% YoY but up 5.5% QoQ. Its Singapore portfolio (69% of AUM, 62% of NPI) reported weaker revenue and NPI, as the backfilling of office vacancies was offset by its weak retail segment. We expect Australia yields to improve following the completion of Plaza Arcade’s refurbishment in Perth. DPU should be supported by its AUM concentration in niche prime locations, master & long-term leases and proactive AEI. SGREIT’s shares yield 7.2%, though it lacks catalysts. Maintain HOLD with an intact DDM-based SGD0.65 TP (WACC 8.0%, LTG 0.5%). Prefer FCT (FCT SP, BUY, TP SGD2.55) for its suburban-mall footprint and stronger DPU-growth profile.
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Sheng Siong Group: Location, location, location Sheng Siong Group’s (SSG) 3Q results were within expectations with core PATMI increasing 1.5% YoY to S$17.7m or 24% of our initial full-year forecast. Management notes that consumer sentiment appears to have deteriorated in the last few months and expects competition to remain keen. Given the currently small market share of online grocers, it has been difficult to observe the impact of their expansion on brick-and-mortar operators like Sheng Siong. We expect that online grocery sales will likely eat first into the market share of stores located in malls (or at hard-to-get-to locations), as opposed to stores located within HDB estates. In this regard, we believe Sheng Siong is less susceptible than some of its peers. However, in light of softening consumer sentiment and keen competition, we apply a more conservative terminal growth rate of 1.5% (vs. 2.0% previously) and our fair value drops from S$1.25 to S$1.13. YTD, SSG has clocked total returns of 21%, outperforming the STI by 29 ppt. As at 31 Oct’s close, SSG is trading at 20.2x blended forward P/E (Bloomberg consensus), near its five-year mean of 20.7x. We downgrade SSG from Buy to HOLD |
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