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MAYBANK KIM ENG |
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Sunningdale Tech (SUNN SP) Windfall From Property Disposal In China
SUNN has entered into a sale and purchase agreement to sell its property in China. The total consideration inclusive of taxes is S$28.9m and net gain is estimated to be S$13.4m, equivalent to 56.3% of 2018 net profit. This is a good opportunity for SUNN to dispose of a non-core asset and the net proceeds will provide additional funding to its business. Maintain HOLD and target price of S$1.50, pegged to peers’ average 2019F PE of 10.6x. Entry price is S$1.25.
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Japfa Ltd (JAP SP) On a high protein diet
Forecasts revised up; maintain BUY Fuelled by the rebound in PT Japfa Tbk (JPFA IJ; IDR2,240; NR) and APO divisions, YTD FY18 has been far stronger than we expected. Upcoming Indonesian presidential elections, our forecast IDR appreciation and a softening in soybean meal should provide further tailwinds in coming quarters. Taking stock of various protein, dairy and commodity input prices, we raise FY18E/FY19E/FY20E core profit estimates by 23%/9%/9% and TP (unchanged SOTP methodology and multiples) by 15% to SGD0.99.
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| DBS VICKERS | |
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City Developments
A white Christmas for City Dev Maintain HOLD; lower TP at S$9.50. We maintain our HOLD rating on City Developments (City Dev) and lower our TP to S$9.50 (from S$10.00 previously). Although the shares are trading at attractive valuations (at close to 2SD below historical P/NAV average), we see limited catalysts for the stock and sector given expectations of a property market slowdown which historically implies that City Dev shares will likely be trading in a range.
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Check out our compilation of Target Prices