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STRATEGY – SINGAPORE Circuit Breaker “Lite”
Being such an open economy with what seems to have been unfettered travel from countries like India, which has been wholly unable to control COVID-19, the Singapore government has announced tighter restrictions to stem a spike in cases within the country. We believe the share price declines on 14 May are a knee-jerk reaction and would focus on companies with strong business franchises and those with the majority (or all) of their earnings from overseas.
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Thai Beverage (THBEV SP) 2QFY21: Robust Earnings; Drinks Priced At A Discount
THBEV announced 2QFY21 core net profit of Bt5.9b, in line with expectations. Spirits volume in Thailand remained flat on a yoy basis while the group was only marginally affected by the political situation in Myanmar. Management noted encouraging market share gains in the Thailand beer market in spite of the COVID-19 restrictions for onpremise sales. THBEV is trading at 15.9x FY21F PE, at a discount of -1.5 SD to its mean PE. Maintain BUY with an unchanged target price of S$0.92.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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United Hampshire US REIT (UHU SP) 1Q21: Cruising Above Stormy Clouds
1Q21 distributable income was in line with our expectations. Grocery & necessity retail properties have maintained high occupancy at 93.9%. The new Publix Store at St Lucie West, Florida, opened ahead of schedule on 15 Apr 21. UHU benefits from the recovery in domestic consumption boosted by the successful rollout of COVID-19 vaccination, healthy job creation and stimulus cheques. UHU provides a 2021 distribution yield of 8.8% and trades at P/NAV of 0.95x. Maintain BUY. Target price: US$0.95.
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Singapore Telecommunications (ST SP) Cleaning up the present, moving to the future
Exceptional losses mostly non-cash; Maintain BUY Singtel is booking a net exceptional loss of SGD1.2b, of which 94% are noncash impairments against its digital assets and Optus’ legacy network. The impairment is part of Singtel’s strategic review of its digital assets. Overall, the share price may experience some weakness in view of the exceptional losses announced. That said, it is all set for Singtel CEO Yuen Kuan Moon’s announcement of its long-term strategic direction, alongside with its results release in approximately 2 weeks’ time. We maintain BUY with SOTP-based TP of SGD2.88 as we see deep value in Singtel. The market is ascribing almost zero value to its SG and Australia operations, while offer 5.3% FY22E yield.
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Check out our compilation of Target Prices
