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CGS CIMB |
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Wilmar International (WIL SP) China Still The Main Story; Maintain BUY
Reiterate BUY, SGD5.45 TP, 14% upside with c.3% FY20F yield. We maintain our positive view on Wilmar, post its analyst briefing. With Yihai Kerry’s China listing in its final lap – awaiting approval from China Securities Regulatory Commission – management now expects the IPO to be completed by end-September. As the market has now, by and large, priced the Yihai Kerry listing at 22-23x PE, we believe the performance of Yihai Kerry post-IPO will create another upside leg for investors.
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China Yuchai International Shifting into high gear
■ Yuchai showed a strong rebound in 2Q20; results were above expectations. 1H20 PATMI of Rmb306m accounted for 60% of our full-year forecast. ■ Favourable policies to boost infra investments and promote replacement of pre-National IV diesel trucks could spur further demand recovery. ■ Reiterate Add on China Yuchai with higher TP of US$19.80, still based on 8.0x CY21F P/E.
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RHB |
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City Developments (CIT SP) Looking Beyond Near-Term Headwinds; BUY
Keep BUY and SGD 9.50 TP, 12% upside. City Developments’ 1H20 numbers were weak, mainly from SGD208m pretax losses in hotel operations. Resilience is however noted across its property development and office portfolio. We are positive on the group’s plans to redevelop two of its older assets in Singapore and divest its non-core hotels and China assets. In our view, near-term headwinds have been fully priced in, with the stock trading at -2SD levels in terms of P/BV and P/RNAV (Figures 2 & 3).
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Food Empire (FEH SP) More Resilient Than Expected; Maintain BUY
BUY, SGD0.75 TP, 21% upside with c.3% FY20F yield. Food Empire booked resilient 1H20 results, with 1H20 PATMI staying stable at USD13.4m, despite a 4% YoY decline in sales. Most of the sales decline occurred in 2Q20, when business activities were disrupted by lockdowns in most markets. It also faced currency volatilities, from exposure to emerging markets. However, earnings remained stable on cost containment measures and selling price adjustments. BUY, as earnings should improve since more countries are easing lockdown restrictions
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