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UOB KAYHIAN |
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Frencken Group (FRKN SP) Outlook Still Bright For FY20F; U/G To BUY
Upgrade to BUY, from Neutral, with a higher DCF-backed TP of SGD1.05, from SGD0.91, 26.5% upside and c.4% yield. We had a call with the management of Frencken and came out optimistic as Frencken should continue to benefit from its key customer in the industrial automation segment, and from an uplift in the semiconductors sector. We raise our FY20F EPS by 14%, which results in a higher DCF-backed TP of SGD1.05.
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Singapore Press Holdings (SPH SP) Attractive Yield, New Defensive Assets; Upgrade To BUY
We upgrade SPH to BUY with a higher target price of S$2.25 following the recent drop in share price giving an attractive yield of 5.8% which is at 1.5SD above its 10-year mean. The group’s additions of defensive assets continue to gather pace and increase its recurring income base. The recent purchases of Japanese and Canadian assets tap on to the ageing trend in developed markets which have seen resilient demand even in economic downturns. SPH’s defensive play could prove to be valuable amid the wider market sell-down.
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| CGS CIMB | DBS VICKERS |
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Hongkong Land Holdings Ltd Resilient office, stable dividends
■ HKL’s HK office portfolio should remain resilient, in view of limited supply of premium Central office space. ■ We think HKL will look for familiar domestic strategic partners for its mega prime commercial plot acquired in Shanghai last month. ■ Reiterate Add with a lower TP of US$6.05 (45% discount to NAV).
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Frasers Centrepoint Trust A perfect match
Maintain BUY with TP raised to S$3.35, as we price in the valuation of PGIM. We believe the time is ripe for FCT to make bold, decisive moves to take the leap to join the big caps in the S-REIT space come 2020. We anticipate the unwinding of PGIM ARF to accelerate this year given the significant control that the group holds in the management of the fund. With an exciting doubling of its AUM and revenues from this exercise and an accretion ranging from 2.9-7.1%, we expect FCT to join the larger-cap S-REITs in terms of valuation multiples (ranging from 1.5-2.0x P/NAV) given stronger liquidity and growth prospects. In addition, we believe that FCT will continue to trade north of 1.4x p/bk as its status will be alleviated as the only pure-play Singapore-focused retail S-REIT. BUY!
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Check out our compilation of Target Prices
