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Offshore & Marine

Looking For Stronger 2020 Orderbooks


 OVERWEIGHT on the offshore & marine (O&M) sector. Keep BUY on all three O&M-related large-cap SGX-listed stocks. Top Pick: Keppel, with the catalyst being Temasek’s partial share offer as a precursor to future restructuring, particularly of its O&M business. Pending an earnings recovery in the O&M segment, Keppel can depend on its property wing for earnings. Our second preference: Sembcorp Industries, which has stable energy earnings to cushion the current drag by the weak O&M space.


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More Privatisation Offers Could Raise Interest In Value Stocks


The number of privatisations has increased significantly to 34 in 2019, from 14 in 2018. The recent privatisation of Citic Envirotech at an attractive premium could raise interest in deep-value small-cap stocks. Deep-value stocks under our small cap coverage include Fu Yu (4.3x 2019F EV/EBITDA, yield of 7.4%), Valuetronics (3.4x 2020F EV/EBITDA, yield of 5.2%) and Overseas Education (2019F yield of 8.9%).


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Dasin Retail Trust

Mitigating the DPU gap



 3Q19 NPI and DPU came in within our forecasts.

 The proposed acquisition of Shunde and Tanbei Metro Mall will lift underlying DPU by 4.3%.

 We lower our revenue and DPU forecasts to reflect the weakening RMB and retail outlook and incorporate the acquisition of Doumen (completed 12 September 2019), Shunde and Tanbei (TBC 1Q20) Metro Malls.

 Maintain ACCUMULATE with lower TP of S$0.88 (previously S$0.94).


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Jumbo Group Limited

FY9/20F: A year of margin expansion


■ FY9/19 net profit (+5.9% yoy) was in line with expectations at 97% of our and 98% of Bloomberg consensus forecasts.

■ We expect FY20F to be a year of margin expansion, with stronger profit contributions from its Singapore outlets offsetting the weakness in China.

■ Jumbo is actively expanding its overseas footprint via JV and franchising. Maintain Add and TP of S$0.47.


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LionelLim8.16Check out our compilation of Target Prices