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UOB KAYHIAN |
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ESR-REIT Revitalising its portfolio
■ EREIT announced the proposed acquisition of 49% of PTC Logistics Hub for S$44.4m and two proposed AEIs for S$45.7m. ■ The transactions will be funded with an equity fund raising of up to S$150m, part of which will also be used to repay debt. ■ We maintain our Add call with a TP of S$0.60 pending greater clarity following the EGM for the preferential offering.
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Health Management International (HMI SP) Potential Share Offer On The Horizon?
HMI announced a possible share transaction with a third party. While discussions have not been finalised, the stock is up 18% since 18 May and 5% in the past week. Current valuation at 25.6x 2020F PE is only at a slight discount to peers’ and this indicates that any potential takeover premium will not be large. We have a BUY for its positive longer-term prospects, with a DCF-based target price of S$0.73.
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| MAYBANK KIM ENG | RHB |
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ComfortDelGro (CD SP) Singapore taxi doesn’t drive the bus
Taxi pressure likely in the price; HOLD Although risks in Singapore’s taxi space continue to pile revenue and margin pressure on CDG, we believe our below-consensus -5% taxi-EBIT CAGR for FY18-21E already factors this in. Expansion into overseas public transport remains key to its revenue and core-profit growth. Although we view its business restructuring and healthy balance sheet favourably, we think valuations are reflective of these positives. Maintain HOLD and DCF-based (WACC 9.0%, LTG 1%) TP of SGD2.45. Irrational taxi competition remains a risk to our outlook while significant acquisitions could provide upside.
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ComfortDelGro (CD SP) Positive On Long-Term Outlook; NEUTRAL
Upgrade to NEUTRAL, SGD2.65 TP, 3% upside with 4% yield. We remain confident over ComfortDelGro’s (CD) earnings growth recovery, aided by contributions from recent acquisitions and its public transport unit’s growth. The stock looks fairly priced now, ie trading at 17.3x 2019 P/E (5-year average: 15x). While we like the defensive nature of its earnings, investors should consider buying at a lower price (c.SGD2.40). Increased competition in the taxi business present downside risks, while earnings-accretive acquisitions offer upside risks.
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Check out our compilation of Target Prices
