ANALYSTS SAY: Buy, Sell, Hold (4 Feb '19)

OCBC 

Singapore Post (SPOST SP)

3QFY19: E-Commerce Remains A Drag, At Risk Of Further Impairments (Again)

SPOST reported 3QFY19 core net earnings of S$32.9m (-7.5% yoy). Earnings were below expectations, with 9MFY19 earnings at 76%/82% of UOBKH/consensus estimates. Improvements from Postal and Logistics continue to be offset by the eCommerce business. Losses will persist for the US e-Commerce business, which is now at risk of another round of impairment. Until that is dealt with, we see no potential upside. Maintain HOLD with unchanged target price of S$1.04. Entry price: S$0.90.

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CapitaLand Retail China Trust: Capital recycling continues!

CapitaLand Retail China Trust's (CRCT) results were within expectations. 4Q18 DPU was up 2.1% YoY to 2.42 S cents while FY18 DPU was up 1.2% to 10.22 S cents or 100.2% of our initial full-year forecast. CRCT also announced the divestment of CapitaMall Saihan and the acquisition of a larger asset across the street, Yuquan Mall, from unrelated third parties. The divestment of CapitaMall Saihan will take place after the new mall is operational in 2H20. We are positive on the capital recycling given what we believe are limited growth prospects for Saihan beyond the next two years. We also believe the acquisition and divestment considerations look attractive from CRCT’s perspective – RMB 11.0k psm for the divestment of Saihan mall, and RMB 8.1k psm for the acquisition of Yuquan mall. Going forward, while we remain wary on macroeconomic uncertainties in China, we are positive on the portfolio’s organic rental reversion outlook. After adjustments, our fair value increases from S$1.39 to S$1.42. We maintain HOLD on CRCT.

Centurion Corp (CENT SP)

Penang’s First Purpose-Built Workers Housing

 Maintain NEUTRAL new DCF-backed TP of SGD0.41, from SGD0.47 1% upside. We attended the Westlite Bukit Minyak PBWA Certificate of Completion and Compliance ceremony in Penang, Malaysia on 29 Jan 2019. It is Centurion’s first PBWA in Penang and seventh in Malaysia. The property, also known as CAT, was developed in collaboration with the local State Government.

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Shipbuilding

Merger on the cards ?

• Hyundai signs MOU to acquire Daewoo to create global shipbuilding powerhouse

• Reduces competition; positive for newbuild prices

• News to reignite speculation on yard mergers in Singapore and China

• BUY Sembcorp Marine (SMM) and Yangzijiang

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