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UOB KAYHIAN |
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ST Engineering (STE SP) Bullish On Earnings Outlook; Reiterate BUY Reiterate BUY, SGD4.55 TP implies 9% upside plus c.3.6% yield. ST Engineering’s (STE) double-digit profit growth outlook for 2020-2021, recordhigh orderbook with more than two years of revenue visibility, positive FCFgeneration capability, reasonable dividend yield and ability to undertake earnings-accretive acquisitions led it to outperform the STI by 15% YTD. STE remains one of our Top Picks, with earnings contributions from the Newtec acquisition and continuing strong order wins as key re-rating catalysts.
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Fu Yu Corp (FUYU SP) Optimisation Of Business Lifts Earnings
Management has actively taken steps to achieve cost efficiencies, including its strategic decision to shift operations in Shanghai to its Suzhou factory which should help lower overheads and improve utilisation. Excluding one-off expense from the shift, 3Q19 results were good, mainly due to gross margin expansion of 4.6ppt yoy (excluding one- off). We raise our 2019-21 net profit forecasts by 8.8-9.4% as we adjust margin assumptions. Maintain BUY with a higher target price of S$0.295.
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CGS CIMB |
DBS VICKERS |
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Dairy Farm Int'l Not time to jump in yet
■ DFI’s share price has shrunk c.34% YTD but given the persistent uncertainty in HK, we think its risk-reward remains lacklustre. ■ The HK retail situation could likely only improve in 2H20F at best, in our view. Hence, we cut our FY19-21F EPS by 3.8-13.3%. ■ Maintain Reduce, with a lower TP of US$5.40, now based on 22x CY20F P/E (23x previously). Wait for better entry points post 4Q19 results.
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AEM Holdings Ltd ”Testing” new highs
• Initiating coverage with a BUY and TP of S$2.38, representing a potential upside of 39% • Key customer is increasing capex and production capacity • New technology structurally increases test times, leading to higher demand for test handlers • Diversification of revenue stream through new projects and customers
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Check out our compilation of Target Prices