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UOB KAYHIAN |
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ComfortDelGro (CD SP) Rail happiness?
Positive but how much has been priced in? HOLD We attempt to capture the impact of Singapore’s coming rail-formula reforms as announced by the Transport Minister recently and raise our FY20/21E revenue by 9%/14% and core profits by 8%/13%. Our DCF-based (WACC 9.0%, LTG 1%) TP consequently climbs by 12% to SGD2.76. We maintain our HOLD. The final form and quantum of fare hikes and/or grants along with the direction of taxi competition and overseas acquisitions are upside and downside risks to our outlook.
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Suntec REIT (SUN SP) Continued Expansion In Australia
The proposed acquisition of 21 Harris Street in Sydney, Australia will deepen SUN’s Australia exposure from 11% to 14% of its total AUM. The acquisition is expected to be DPU-accretive (boosting pro-forma FY18 DPU by 0.5%). The transacted price is fair and in line with the independent valuation by JLL. Maintain HOLD with a higher target price of S$2.00 (previously S$1.99). Entry price: S$1.82.
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RHB |
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China Aviation Oil (CAO SP) Chinese Aviation Traffic Continues To Grow
BUY, SGD1.60 TP offers 23% upside, 3.5% yield. Although CAO’s share price has moved lower in line with jet fuel prices, we highlight that profitability of its China jet fuel business is driven by volumes and not so much by the oil price outlook. We remain upbeat on the long term growth of China’s aviation passenger traffic, in line with its rising per capita income and expanding aviation infrastructure. We believe our earnings estimates remain conservative and ex-cash 4.3x 2020F P/E remains compelling.
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