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CGS CIMB |
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Koufu Group Ltd Bringing in the dough
■ Koufu is acquiring a traditional fried food and dough products business for S$22.04m in cash, which could add c.5%/8% to our FY20/21F EPS. ■ At 9.2x implied P/E, we think this is an attractive acquisition as it complements Koufu’s product offering and strengthens its supply chain. ■ Further synergies could also be reaped from the consolidation of manufacturing facilities and potential expansion of distribution channels.
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iFAST Corporation Ltd Fierce competitor in the digital race
■ We hosted a conference call for investors with iFast’s CEO to discuss business updates, competition on the ground, and digital bank strategy. ■ We see more than a 1 in 3 probability of iFAST obtaining a digital banking licence. Its profitable fintech and wealth business model gives it an edge. ■ The potential bank will strategically target SMEs, building a deposit base from its cash-rich wealth franchise. Lending at cheaper rates is its eventual aim. ■ Reiterate Add with TP of S$1.65 based on SOP, pegging iFast to 26x FY21F P/E and S$100m paid-up capital for the DWB licence.
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UOB KAYHIAN |
RHB |
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Genting Singapore (GENS SP) Upside Hinges On Decision On Japan Bid; Downgrade To HOLD
After a prolonged closure in compliance with the government’s Circuit Breaker measures, RWS is finally allowed to reopen from 1 July. However, a slow recovery is expected with impediments on international travel into Singapore and reduced gaming capacity. While we still like GENS for its appealing yield, further near-term upside to GENS’ share price hinges on whether it pursues the Japan IR which bears an uncertain payback. Downgrade to HOLD. Target price: S$0.80. Entry price: S$0.68.
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ComfortDelGro (CD SP) Look Beyond Near-Term Weakness; BUY
Reiterate BUY with SGD1.65 TP, 12% upside and c.5% 2021F yield. ComfortDelGro’s share price reacted negatively after it announced expectations of a 1H20 loss and extended the 50% taxi rental waiver until 15 Jul. Even if there is a more gradual reopening of Singapore’s economy, we believe CD should report QoQ profit improvement as we get to the end of 2020, and strong earnings growth in 2021. With its forward P/E below the historical average, we maintain that investors should use the current price weakness to accumulate the stock.
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Check out our compilation of Target Prices
