| CGS CIMB |
CGS CIMB |
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China Aviation Oil Stellar FY19 but Covid-19 clips 2020’s wings
■ 12M19 net profit of US$99.8m was strong, and ahead at 104.9%/106% of our/consensus’ FY19F forecasts (S$95.1m/S$94.2m) on higher GPMs. ■ We expect FY20F to be impacted by Covid-19 as CAO’s main earnings are linked to China’s aviation industry, in our view. We cut FY20-21F EPS. ■ We lower our rating to Hold (from Add), with a lower TP, now based on PER of 8.5x (close to long term average mean) rolled-forward to FY21F PER.
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City Developments Hotel segment continues to drag
■ 4Q19 EPS of 9 Scts was slightly below our expectations but FY19’s 62.3 Scts was broadly in line at 106% of our FY19 estimate. ■ Medium-term recovery in the hotel segment; building more recurring income. ■ Reiterate Add with an unchanged TP of S$12.09.
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| RHB | RHB |
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CapitaLand (CAPL SP) Delivering On Its Targets; BUY
Maintain BUY and TP of SGD4.20, 14% upside plus c.4% yield. FY19 core PATMI was in line with Street but slightly ahead of ours. Despite market challenges, CapitaLand achieved overall 2019 ROE of 10%, and remains confident of hitting its 8-12% pa target. While the COVID-19 outbreak poses near-term operational challenges, we believe it is well prepared to tide through with a well-diversified income stream and proactive management team. Our TP is based on a 20% discount to RNAV.
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First Resources (FR SP) Spike In Downstream Margins; Keep BUY
Keep BUY, with new SGD2.00 TP from SGD2.30, 21% upside, derived from 17x 2020F P/E. FY19 earnings slightly surpassed our expectations, but were below consensus projections. We like First Resources for its cost-efficient operations, while biodiesel expansion plans will capture upside in Indonesia’s biodiesel mandate.
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Check out our compilation of Target Prices
