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UOB KAYHIAN |
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Japfa Ltd 3Q19: Position for the longer-term upcycle
■ 3Q19/9M19 core net profit of US$11.8m/US$47.6m (-58.7%/-48.2% yoy) was marginally below at 79.0%/74.7% of our/consensus full-year forecasts. ■ We had overestimated the weakness in Indonesia poultry, but weaker Vietnam swine EBIT and higher finance costs dampened the results. ■ Despite the share price gains since May we still see a longer-term trading opportunity in JAP. Maintain Add, with a higher TP of S$0.56.
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Parkway Life REIT (PREIT SP) 3Q19: Resilient Growth From Singapore And Japan
PREIT registered stable growth with DPU of 3.30 S cents in 3Q19, up 1.9% yoy. NPI from the Japan portfolio increased 9.9% yoy due to one-off insurance proceeds of S$0.9m. Minimum guaranteed rent for the Singapore properties has increased 1.61% starting 23 Aug 19. Management has further reduced its all-in cost of debt from 0.91% to 0.81% after extension of interest rate hedges in Oct 19. PREIT’s healthcare assets are defensive and resilient. Maintain BUY. Target price: S$3.58.
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MAYBANK KIM ENG |
CGS CIMB |
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Hi-P International (HIP SP) Await better entry point
3Q19 in line; 2020 recovery priced in; D/G to SELL While we are more optimistic of FY20E earnings growth, fundamentals appear priced in. Hence, we d/g to SELL, although ROE-g/COE-g TP is raised to SGD1.34 as we roll forward to 1.5x FY20E P/B. 3Q19 PATMI was in line, declining 3% YoY despite a 5% increase in revenue, in part due to persistent pricing pressure. We cut FY19E EPS by 4% to factor in Hi-P’s revenue guidance to “lower” from “similar”, but FY20-21E EPS is higher by 2-3% to account for increased volumes. Accretive M&A is a key upside risk.
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United Overseas Bank 3Q19: Margin pressure setting in
■ UOB’s 3Q19 net profit of S$1.12bn was 4%/10% above our/consensus S$1.07bn/S$1.02bn estimates. NII was stronger 2% qoq despite -4bp NIM. ■ The beat came mainly from stronger inv. gains (+46% qoq) and credit card income (+4% qoq), offsetting the 21bp credit costs. ■ Maintain Add with GGM-based TP of S$29.54 (implied 1.3x P/BV, 11.5% ROE).
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