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PHILLIP SECURITIES |
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COVID-19 Affected, But Valuation Attractive; BUY
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EC World REIT Protected by master leases SINGAPORE | REAL ESTATE (REIT) | FY19 RESULTS
4Q19 and FY19 NPI and DPU were in line with our forecast High income visibility due to portfolio occupancy of 99.9% and WALE of 4.1 years FY19 DPU down 2.1% YoY; accretion from Fuzhou E-commerce acquisition wiped out due to FX and timing lag between drawdown of loans and acquisition Maintain BUY with a lower TP of S$0.83 (prev S$0.84). Our TP translates to a FY20e DPU yield of 8.7%
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| UOB KAYHIAN | DBS VICKERS |
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Rex International Holding (REXI SP) 4Q19: Impending First Oil Production, Huge Cash War Chest About To Get Bigger
Rex reported net profit of US$19.4m for 2019, backed by the sale of one of its Norwegian assets. We expect Rex to divest of its stake in the Shrek prospect by 2020. Rex also increased its healthy net cash position to US$61.9m in 2019 (2018: US$27.8m). With the successful test production in Oman, we expect Rex to have recurrent revenue from the oil production at the Yumna 1 well. Maintain BUY with a higher SOTP-based target price of S$0.27, implying an upside of 46.7% from current price levels.
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UOB Limited catalysts for now
The Federal Reserve (Fed) announced a 50-bp interest rate cut in an emergency move on 3 Mar 2020. UOB’s management had previously guided for a marginal net interest margin (NIM) decline (~5bps). We believe that there is further NIM downside following the surprise Fed cut which will also impact SIBOR. We further trim our NIM assumptions by 2bps to 1.71% (FY19: 1.78%), resulting in earnings revision of c.2%. While UOB will continue to leverage on its strong capital position to capture cross-border loan growth opportunities as it continues to target broad-based commercial loan growth amid a slower growth environment, we believe there is limited catalysts on the stock for now given further NIM pressures and uncertainty from COVID-19 outbreak globally.
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Check out our compilation of Target Prices
