Excerpts from RHB Research report
Opportunistic SMID cap ideas.
Although small and mid-cap (SMID cap) stocks in Singapore have underperformed large cap stocks, we believe selective opportunities exist for investing into SMID cap companies that offer either strong visibility on earnings growth, sustainable high dividends, and/or are trading at compelling valuations. 
Dr Beng Teck Liang, CEO of Singapore Medical Group. NextInsight photo.In the SMID cap space, our preferred picks are Silverlake Axis (SILV SP, BUY, TP: SGD0.65), HRnetgroup (HRNET SP, BUY, TP: SGD1.18), Fu Yu (FUYU SP, BUY, TP: SGD0.23) and Singapore Medical Group (SMG SP, BUY, TP: SGD0.56).
We like Silverlake for its strong earnings growth as it draws down on its existing orderbook; HRnetgroup, for its ability to offer earnings upside from earnings-accretive acquisitions; Fu Yu for its attractive +8% dividend yield; and Singapore Medical Group for its lowest valuation amongst healthcare players in Singapore.
|
|
M Cap |
TP |
Upside |
1FY |
P/E (x) |
P/BV (x) |
Yield (%) |
ROE (%) |
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|
|
|
|
|
|
1FY |
2FY |
1FY |
2FY |
1FY |
2FY |
1FY |
2FY |
|
CDL Hospitality |
1,292 |
1.80 |
23.3 |
2018 |
11.6 |
10.9 |
0.9 |
0.9 |
6.3 |
6.7 |
8.1 |
8.4 |
|
Delfi |
592 |
1.59 |
20.5 |
2018 |
24.2 |
23.1 |
2.7 |
2.6 |
2.1 |
2.6 |
10.1 |
11.3 |
|
Fu Yu |
105 |
0.23 |
21.1 |
2018 |
13.3 |
12.4 |
0.9 |
0.9 |
8.4 |
8.4 |
6.5 |
7.1 |
|
HRnet |
591 |
1.18 |
47.5 |
2018 |
14.8 |
14.1 |
2.3 |
2.1 |
3.2 |
3.3 |
16.0 |
15.4 |
|
Manulife US REIT |
984 |
0.92 |
19.5 |
2018 |
11.8 |
10.7 |
0.9 |
0.9 |
7.2 |
7.6 |
7.9 |
8.6 |
|
Starhill Global |
1,089 |
0.80 |
17.6 |
2019 |
10.2 |
9.5 |
0.7 |
0.7 |
7.1 |
7.4 |
7.1 |
7.5 |
|
Silverlake Axis |
807 |
0.65 |
56.6 |
2019 |
15.5 |
14.3 |
6.2 |
6.0 |
4.8 |
4.8 |
37.2 |
36.1 |
|
Singapore Medical Group |
139 |
0.56 |
40.0 |
2018 |
15.4 |
14.2 |
1.4 |
1.3 |
- |
1.4 |
8.9 |
9.0 |
|
Sheng Siong |
1,170 |
1.27 |
19.8 |
2018 |
22.7 |
19.4 |
5.6 |
5.0 |
2.8 |
3.8 |
24.3 |
26.6 |
|
Note: Prices are as at 31 Dec 2018 |
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Full report here.