| UOB KAYHIAN |
KGI FRASER |
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ST Engineering (STE SP) A Strategic Acquisition To Springboard Satcom Capability
STE’s latest proposed acquisition of Newtec, a specialist in the Satellite communications equipment and technology market, propels its Satcom reach into the broadcast and consumer space in Europe. STE expects to realise synergies and cost savings with its existing Satcom platform I-Direct to the tune of S$200m over a 5- to 7- year period. We view this acquisition as having greater long-term benefits than MRAS. We raise our target price by 8.4%. Maintain BUY. Target: S$4.40.
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Sasseur Reit (Not Rated) - We re-visited two outlet malls held by Sasseur REIT (SASSR). |
| DBS VICKERS | DBS VICKERS |
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Jumbo Group Higher margins to kick in Upgrade to BUY with higher TP of S$0.50.
We turn positive on Jumbo and upgrade our recommendation to BUY with a TP of S$0.50, as we expect the group to post >20% earnings growth in FY19F after two years of decline. We believe the closure of lower-margin stores and opening of higher-end and higher footfall restaurant outlets would lift overall margins going forward. We also project franchise income to kick in following a slew of franchise outlets established in FY18. Furthermore, expenses incurred for its 30th anniversary celebrations in FY18 would also be absent this year. Lastly, the momentum of new store performance in Jumbo Seafood ION reflects a strong start.
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Singapore Monthly Strategy Dividends in focus
• Beneficiaries of URA draft masterplan 2019 – SGREIT, CCT, KREIT, SUN, FCOT, OUECT, Capitaland & UOL • Prefer yield-defensive stocks in a ‘peak’ interest rates, uncertain growth environment – FCT, MCT, MLT, MAGIC, MINT, AIT, OUECT, Keppel-KBS US REIT, ST Eng, Netlink NBN Trust & SATS • Large-cap stocks with attractive upcoming dividend payouts – Venture Corp, UOB and ST Engineering.
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Check out our compilation of Target Prices
