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Valuetronics (VALUE SP) Value emerging; U/G to BUY
Value emerges following sell-down We believe value has emerged following the recent sell-down, and upgrade VALUE to BUY from HOLD with unchanged TP of SGD0.66 (1.2x FY21E P/B). Risks VALUE are exposed to in the electronics manufacturing industry include corruption, workplace safety, fair employment and treatment of employees, and environmental. In FY20, VALUE complied with applicable laws and regulations on the environment, anticompetitive behaviour and requirements on health and safety.
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Hi-P International (HIP SP) Constant improvement
Continual improvement in ESG factors; U/G to BUY U/G to BUY from HOLD with unchanged ROE-g/COE-g TP of SGD1.23 (1.4x FY21E P/B) as the recent correction may have priced in negatives such as pricing pressure and demand uncertainty. Hi-P’s electronics manufacturing business exposes it to industry risks including corruption, workplace safety, fair labour practices and environmental. Hi-P is rolling out new ISO standards to improve its monitoring and execution of environmental and anti-corruption factors. Hi-P states it is in full compliance of environmental, labour and governance laws.
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UOB KAYHIAN |
UOB KAYHIAN |
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Banking – Singapore Living And Coexisting With COVID-19; With Vaccine Approval In Sight
We expect a COVID-19 vaccine to be authorised for emergency use in Nov/Dec 20 and formal approval for general public use in 1Q21. The commencement of vaccination would: a) improve business confidence; b) ease safe distancing measures; and c) reduce stress on the corporate sector, thus moderating NPL formation. Assuming the MAS does not interfere with the banks’ dividend policies, we expect DBS (BUY/Target: S$23.50) and OCBC (BUY/Target: S$11.48) to provide dividend yields of 5.4% and 5.9% for 2021F and 6.6% and 6.6% for 2022F respectively. Maintain OVERWEIGHT.
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Keppel Corp (KEP SP) Accelerating Its Transformation
KEP is looking to unlock S$3b-5b in monetisable assets in the next three years. Importantly, it has started a strategic review of its O&M business (which we value at S$1.4b or S$0.78/share) that could involve a strategic merger or disposal. This was disclosed as at end-1H20. Excluding its shipyards, KEP had assets with a total carrying value of S$17.5b that it can potentially monetise over the longer term. Maintain BUY. Target price: S$6.30.
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Check out our compilation of Target Prices
