| UOB KAYHIAN |
RHB |
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SIA Engineering (SIE SP) 1QFY20: Earnings In Line; Top-line Growth Turns Positive After Six Quarters Of Decline
SIAEC’s 1QFY20 net profit is in line with our expectations, up 2.7% yoy. A 21% yoy reduction in material costs and lower company accommodation cost led to a 74% yoy rise in operating profit. Meanwhile, associate and JV earnings fell due to an 18% yoy decline in earnings from the engine segment. Maintain HOLD and target price of S$2.55. Suggested entry level: S$2.40.
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Suntec REIT (SUN SP) Enhancing Earnings Quality; Upgrade To BUY
Upgrade to BUY from Neutral, with new SGD 2.08 TP from SGD1.90, 8% upside plus 5% yield, as we expect earnings turnaround from flow through of positive rent reversions, completion of three development assets by 1H20, and higher income contribution from latest acquisitions. The recent placement exercise also removed an overhang of any imminent fund raising. Valuations are attractive with the stock trading at 0.9x P/BV (Office REITs: -1.1x P/BV) and dividend yield of 5.1%.
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PHILLIP SECURITIES |
MAYBANK KIM ENG |
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Frasers Centrepoint Trust All the right moves, in all the right places
3Q19 NPI and DPU in line with our forecast. Better performance from higher portfolio occupancy and positive rental reversions despite the softer retail sector. Growth catalysts include FCT’s ROFR pipeline, heightened positioning of Causeway Point, renewed strength in fringe retail rents and possible acquisition of PGIM’s assets. Upgrade to ACCUMULATE with higher TP of S$2.77 (prev. S$2.31). Higher target price due to the acquisition of Waterway Point (33.3% stake) and a lower risk-free rate assumption.
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AEM Holdings (AEM SP) Addressable market maintained
Bringing FY20E earnings forward; maintain BUY AEM raised its FY19E revenue guidance to SGD265-280m from SGD225- 250m. That said, it believes that the bulk of this could be frontloading of 2020E orders. As such, we raise FY19E EPS by 27% but reduce FY20E by 24%. Our ROE-g/COE-g TP is unchanged at SGD1.40, based on 3x blended FY19-20E P/BV. Catalysts could come from FY20E contributions from new hybrid equipment and Huawei as it ramps up production. Maintain BUY.
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