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CGS CIMB |
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ComfortDelGro (CD SP) Getting Close To Fair Value; TAKE PROFIT
TAKE PROFIT, SGD2.65 TP, 2% upside with 4% FY19F yield. We remain positive on ComfortDelGro’s growth in the public transportation business, profit contributions from new acquisitions and likely improvement in taxi earnings amidst a lack of competition from ride-hailing players. However, after delivering +21% YTD returns, CD – now trading at 17.3x 2019 P/E (5- year average of 15.4x) – seems fairly priced. Investors could consider buying CD again, if the share price drops below SGD2.50. Additional earningsaccretive acquisitions offer upside risks.
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Sasseur REIT Brand experts
■ SASSR offers exposure to China’s fast-growing retail outlet segment with 8.5% FY19F dividend yield, above its overseas-centric S-REITs peers’ 6.8-8.8%. ■ Similar to a master lease, its rental structure provides downside protection, in our view, while offering potential earnings upside. ■ We initiate on SASSR with an Add rating and a DDM-based TP of S$0.92. Faster-than-expected tenant sales growth is a potential re-rating catalyst.
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| UOB KAYHIAN | DBS VICKERS |
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Singapore Press Holdings (SPH SP) Transition Into A Defensive Play Underappreciated, Upgrade To Contrarian BUY
We upgrade SPH to a contrarian BUY with a 2.5% increase in target price to S$2.82, mainly accounting for the 6% rally of SPH REIT. The rising importance of resilient assets in SPH’s portfolio and new management’s effort to expand the defensive business have been underappreciated. The recent acquisition of a student accommodation portfolio is a good start. Capital efficiency is also improving under the new management, from the disposal of low-yielding assets for higher-yielding ones. SPH’s 2019F yield of 4.5% is higher vs the STI’s 4.1% after the recent selldown.
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Are we there yet? • “Lower for longer” rally to push S-REIT past 2013 highs; we see another 10% upside from current levels. • Fundamentals continue to improve while potential acquisitions are the next re-rating catalysts • Rotational interest into mid-caps like FCT, MINT, FLT, OUECT, KORE, CRCT and MAGIC
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