ANALYSTS SAY: Buy, Sell, Hold (12 Feb '19)

UOB KAYHIAN

Singapore Banks

4Q18 What to expect

End of ‘growth’ phase; but remain POSITIVE

DBS will be reporting 4Q18 results on 18 Feb, followed by UOB and OCBC on 22 Feb. As discussed in our recent report – Singapore Banks: Still got the juice (30 Jan), we expect slowing loan growth as the sector leaves the ‘growth’ phase of its cycle and enters ‘consolidation’. Nevertheless, we expect continued NIM expansion as asset yields are re-priced upwards amid falling YoY credit costs. We will pay close attention to these as the banks report. A good showing here should support improving ROEs and robust dividends. DBS and UOB are our top picks. Short-term pair trade: long DBS, short OCBC.

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Bumitama Agri (BAL SP)

4Q18 Results Preview: Inventory Drawdown Compensates For Weak Selling Prices

Based on our earnings estimates, BAL is expected to delivery lower qoq and yoy net profit for 4Q18. 4Q18 core net profit is expected to be in the range of Rp240b-260b on the back of a weaker CPO ASP (yoy and qoq) and lower production (qoq). 4Q18 is likely to see the lowest ASP for 2018, but price weakness should have been offset by a higher inventory drawdown with logistics-related issues being resolved gradually. Maintain BUY. Target price: S$0.81.

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Venture Corporation

Venture: expecting qoq revenue growth

■ Guided by Venture’s qoq revenue growth expectations, we estimate 4Q18 net profit at S$100.7m.

■ Key risk is impact on economic growth from the US-China trade war.

■ Maintain Add and S$17.44 TP based on 12.56x FY20F core EPS.

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APAC Realty (APAC SP) Buy (Maintained) Deepening Overseas Presence

 Regional expansion into Indonesia and Thailand market.

APAC has deepened its South-East Asian presence with the purchase of the ERA master franchise operations for Indonesia and Thailand. The move is in line with management’s outlined IPO growth strategy and would help in the long-term diversification of its earnings base amidst challenges in the Singapore residential market.

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