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UOB KAYHIAN |
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AEM Holdings (AEM SP) Hat trick hero
3 rd positive revision to FY19 guidance; TP +7% As a result of stronger than expected momentum, AEM has raised FY19 revenue guidance for the 3rd time this year. In response, we raise FY19E earnings by 10%. Although FY20-21E earnings are largely unchanged, we continue to see upside from new projects. Maintain BUY with increased ROE-g/COE-g TP of SGD1.50, based on 3.2x (prev: 3x) blended FY19-20E P/BV. Strong 2020E orders is a catalyst for the stock, while a key risk is a sharp drop in the demand of the key customer’s chips.
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Fu Yu Corporation (FUYU SP) Continued Optimisation Of Business
FUYU continues to put in efforts to optimise its operations. Three key initiatives which will lead to cost savings and growth include: a) liquidation of a loss-making JV in Malaysia; b) lease renewal for its Singapore plant; and c) closure of its Shanghai factory. Although the one-off expense related to the closure of the Shanghai factory could drag 3Q19 earnings into the red, we believe FUYU will still pay a higher dividend for 2019, which could support share price. Maintain BUY and target price of S$0.285.
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CGS-CIMB |
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Jardine Matheson |
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