| CGS CIMB |
MAYBANK KIM ENG |
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REIT Growth to continue
■ We expect SREITs’ outperformance to continue in this low interest environment despite more challenging operating conditions. ■ Inorganic growth opportunities continue to drive DPU expansion. ■ Maintain sector Overweight. Top picks – MCT, FCT, and FLT.
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Health Management Int’l (HMI SP) Operationally robust
FY19 within expectations; take the cash offer FY19 PATMI met the higher end of our expectations. 4QFY19 core PATMI fell 7% YoY due to gestation costs at StarMed. Revenue rose 10% YoY, driven by decent patient load growth and robust bill sizes. Our FY20-22E earnings forecasts are unchanged. We raise DCF-based TP to SGD0.73 (WACC: 7.1%, LTG: 1.5%) as we roll forward valuation to FY20. While our Hold rating is maintained, we recommend investors to take the cash option of EQT’s SGD0.73 offer.
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UOB KAYHIAN |
RHB |
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First Resources (FR SP) Waiting To Accumulate During Price Weakness
Production recovery comes on time to catch better selling prices. 2H19 earnings recovery is well supported by higher ASP, better production and lower cost. Slower production growth for 2019 was guided earlier but the impact on yield after two years of strong production was underestimated. 2Q19 earnings may have bottomed and any further price weakness is a good time to accumulate. Maintain HOLD. Target price: S$1.60. Entry price: S$1.45.
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Oversea-Chinese Banking Corp (OCBC SP) Greater China Potential, But Already Priced In
Stay NEUTRAL with a new SGD11.50 TP from SGD11.80 TP, 7% upside plus 4.7% yield, based on 1.07x 2020F P/BV. After attending the OverseaChinese Banking Corp’s presentation on its Greater China franchise, we are optimistic on further growth there. However, NIM contraction could lower overall earnings growth. Our TP is derived from long-term ROE assumption of 11.7% (same as 1H19’s), factoring in digitisation-driven cost efficiencies accompanied by marginally-narrowing NIM.
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Check out our compilation of Target Prices
