|MAYBANK KIM ENG||
Leaving the air pockets behind
Fuel in the tank to sustain outperformance
We remain positive on SG aviation services for 2020. The companies have performed well despite the headwinds of weak 1H visitor arrivals, tradewar related shrinking air cargo volume and Hong Kong unrest. We expect cargo volumes to bottom over the next couple of quarters, while SG will host a number of ‘even-year’ biennial trade events in 2020 providing fuel for the stocks’ YTD2019 outperformance over FSSTI to be sustained next year. We are BUYers of all three stocks with SATS being our top pick.
Thai Beverage (THBEV SP)
FY19: Missed Expectations; Finance Costs Still A Drag
THBEV reported 4QFY19 net profit of Bt3.4b, up 11% yoy. Full-year core PATMI made up 93%/94% of our and consensus estimates, missing expectations. The key negative came from the beer segment’s PATMI, which dropped to a net loss for the quarter as it continued to be weighed down by finance expenses. Dividend payout ratio remained similar to the FY18 level. THBEV is trading close to its historical mean at 19.4x FY20F PE. Maintain HOLD with a target price of S$0.90 Entry price: S$0.78.
Singapore REITs Monthly
Monthly Tracker: November 2019
SINGAPORE | REAL ESTATE (REIT) | UPDATE
FTSE S-REIT index return declined 2.2% MTD and gained 23.0% YTD. Strongest gains were from the Healthcare sector (1.46% MTD) and weakest showing from the Hospitality sector (-3.14% MTD).
Performance in September: Best – Lippo Malls Indonesia Retail Trust (+6.7%), Worst – Eagle Hospitality Trust (-19.7%)
Sector yield spread widened 4bps MoM to 282bps, -0.96 standard deviation (s.d.) over the benchmark 10-year SGS (10YSGS) yield.
3-month SOR fell 6bps to 1.51% at 15 November 2019 versus 1.57% last month. Elevated P/NAVs expected to persist in the lower interest rate environment.
Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Commercial and Hospitalit
Check out our compilation of Target Prices