| UOB KAYHIAN | UOB KAYHIAN |
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SIA Engineering (SIE SP) 1HFY21: No Silver Lining; Downgrade To SELL
SIAEC’s 1HFY21’s loss was below street expectations, even after excluding the S$35.2m in impairment loss. We believe that SIAEC is facing structural challenges, which have been heightened by the COVID-19 pandemic. We are now less convinced of its ability to make a turnaround post-COVID-19, and believe that stock price is likely to head towards book value if earnings do not recover in FY22. Downgrade to SELL. Target price: S$1.52.
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CapitaLand (CAPL SP) 3Q20 Business Update: Swings And Roundabouts
CAPL’s 3Q20 business update revealed meaningful sequential recovery in some of its businesses, especially residential, retail and business parks, industrial and logistics. However, the outlook for the retail, office and lodging segments appears decidedly weak. We do not see any meaningful share price catalysts for the stock in the near term and thus maintain our HOLD rating. Fair value lowered to S$2.80 (previously: S$3.00). Entry price: S$2.40.
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MAYBANK KIM ENG |
CGS CIMB |
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AEM Holdings (AEM SP) Seasonality normalising
3Q20 ahead; Maintain BUY AEM's 3Q20 PATMI of SGD24.3m (+77.4% YoY, +27.1% QoQ) was ahead of our and consensus expectations. We raise FY20E PATMI by 3%, on the back of AEM's positively revised FY20 revenue guidance of SGD500-520m from SGD480-500m previously. However, our FY21-22E earnings are largely unchanged pending FY21E revenue guidance in Jan '21. Maintain BUY and TP of SGD5.05 (14x FY21E P/E).
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United Overseas Bank The worst could be over
■ Key guidance from management was for lower credit costs of 90-100bp in FY20-21F (vs.120bp), lower worst-case NPL (c.2%) and bottomed-out NIMs. ■ We upgrade to Add with a higher TP of S$22.52. NIMs should stabilise at c.1.53% going into FY21F (FY20F: 1.57%) as asset yield declines find a floor. ■ Limited credit migration and modest growth should keep CET1 at c.13-14%, primed for resumption of 50% dividend payout provided MAS’s cap expires.
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Check out our compilation of Target Prices
