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RHB |
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ComfortDelGro (CD SP) 1Q20 Business Update; Keep NEUTRAL
Keep NEUTRAL with new SGD1.45 TP from SGD1.54, 6% downside. ComfortDelGro reported abridged financials for 1Q20 with PATMI accounting for 19% of our previous 2020F estimate. While COVID-19 mostly impacted overseas businesses negatively in 1Q20, its effect on Singapore businesses – 60% of revenue – will be visible in 2Q20. We cut FY20F-22F profits by 7%-14%. With expected near term earnings weakness and likely slow recovery in business to pre-COVID-19 levels, we see limited catalysts to turn positive on earnings and share price outlook.
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First Resources (FR SP) Disappointing 1Q20, Downgrade To NEUTRAL
Downgrade to NEUTRAL from Buy, new TP of SGD1.25 from SGD1.20, 4% downside and c.2% yield. First Resource’s 1Q20 results disappointed on lower FFB output and sales volumes. While production should improve in 2Q20, this will be offset by lower prevailing CPO prices. As the share price has hit our target, we downgrade our recommendation on the stock.
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UOB KAYHIAN |
UOB KAYHIAN |
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Elite Commercial REIT (ELITE SP) Recession-proof Counter-cyclical Yield Play Anchored By The UK Government
Elite, Singapore’s first UK-focused S-REIT, is a recession-proof counter-cyclical yield play. Over 99% of its initial portfolio is leased to the UK government. The sole occupier, the DWP, is the largest public service department serving 20m claimants in the UK. The leases are full repairing and insuring triple net leases with long WALE of 8.6 years. We estimate the step-up in rents at 7.9% for Apr 23, assuming average CPI of 1.5% each in 2020-22. Initiate coverage with BUY and target price of £0.88.
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Riverstone Holdings (RSTON SP) Positive Takeaways From Conference Call; Raise Target Price By 18%
We held a conference call with Riverstone’s CEO on 21 May 20. Key takeaways are: a) there is robust demand for healthcare gloves and ample room for ASP hike, with ASP hikes only starting in May 20; b) cleanroom gloves are enjoying healthy demand, with a surprise ASP hike in Jun 20; and c) capacity expansion is set to fully come on line in 4Q20. We raise our 2020F EPS by 21% and PE-based target price by 18% to S$2.53 (23.1x 2020F PE). Maintain BUY.
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Check out our compilation of Target Prices
