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StarHub (STH SP)

Cyber Security Losses Tapering Off


 Maintain NEUTRAL with adjusted DCF-derived TP (WACC: 7.4%) of SGD1.52 from SGD1.72, 3% upside. 2Q19/1H19 results were broadly in line. We lower our FY19-21 core earnings forecasts by 5-12%, mainly to factor in higher financing charges and weaker pay-TV and cable revenues. StarHub’s prospective EV/EBITDA valuations are at -2SD below its historical mean. Upside risks are stronger-than-expected earnings, an earlier turnaround at its enterprise business, and weaker mobile competition.


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Sunningdale Tech (SUNN SP)

2Q19: Hit By Slowdown In Three Key Segments; Downgrade To SELL


2Q19 core net loss of S$0.7m was a big miss, with 1H19 meeting only 8% of our fullyear estimate due to weak auto demand. 2Q19 revenue and gross profit fell by double digits yoy. We cut our 2019-20F EPS by 17-49%, and reduce our target price by 17% to S$1.01, pegged to peers’ average 2020F PE of 11x. Downgrade SUNN to SELL. Recovery in 2H19 from the ramp-up of two new plants will help marginally, but we expect 2019 core net profit to decline 55% yoy from the high base last year.


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First REIT Stable 2Q


■ 2Q/1HFY19 DPU of 2.15/4.3 Scts was in line at 24.4%/48.7% of our FY19F.

■ Stable portfolio performance; clarity over Indonesia master lease renewals could lead to share price outperformance.

■ Maintain Add with an unchanged TP of S$1.23.


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Yangzijiang Shipbuilding

What’s New


• 2Q19 lifted by reversal of provision; 1H19 net profit slightly ahead, making up 53% of our FY19 estimate

• Expect order win momentum to pick up strongly in 2H; maintain US$1.5-2bn order win target

• Beneficiary of stronger USD; successful venture into LNG carrier market a crucial catalyst

• Reiterate BUY; TP unchanged at S$1.82


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