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CGS INTERNATIONAL |
CGS INTERNATIONAL |
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Singapore Airlines Temporary drop in earnings due to Iran war
■ We reduce our TP to S$6.77, now based on CY26F P/BV of 1.35x (+1.5 s.d. from mean since 2001) vs. P/BV of 1.45x (+2 s.d.) previously. ■ The cut in TP follows the 37% cut in our FY27F EPS as we believe both SIA and Air India will not be able to fully recover from the spike in fuel costs. ■ We reiterate Hold as we think that SIA could see a sharp yoy recovery in earnings in FY28F if oil prices decline upon the end of the Iran war.
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ST Engineering A de-escalation breather
■ STE’s S$600m contract win for Kuwait’s naval force, soon after its Qatar MRO win in Feb 2026, reinforces its growing foothold in the Middle East. ■ Conversion of DPS orders could be lumpy while CA could see pushback of MRO orders. Upside could come from more USS work. ■ We think STE’s c.16% two-year core EPS growth is reflected at its 35x/30x FY26F/FY27F P/E. Downgrade to Hold with an unchanged TP of S$11.05.
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CGS INTERNATIONAL |
UOB KAYHIAN |
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ComfortDelGro Fuel risk under control
■ Better positioned as compared to 2022 fuel spike price with stronger margins secured and pass through mechanism in place. ■ Limited near-term impact, supported by hedging and recent fare increases to mitigate higher fuel cost for drivers, while demand remains largely resilient. ■ Reiterate Add with a decent dividend yield of 6% in 2026F.
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Strategy Alpha Picks: Trump Tweets, Portfolio Bleeds
Highlights • Our Mar 26 Alpha Picks underperformed the STI by 6.4ppt on an equalweighted basis. • For Apr 26: Add FR and NTTDCR; remove ASL and CSE. • Apr 26 Alpha Picks: CAO, CIT, FEH, FR, HLA, HUAGL, KEP, NTTDCR, OCBC, PROP, ST, SATS, UGAI and VALUE.
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| LIM & TAN | LIM & TAN |
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First REIT (S$0.245, down 1 ct) has announced a series of transactions (the “Proposed Divestments”) at an aggregate agreed property value of S$471.5 million, representing a 2.1% premium to valuation, and Put Option Agreements for the remaining six hospital assets in its Indonesia porƞ olio which will unlock approximately S$294.8 million when exercised. First REIT’s market cap stands at S$518mln and trades at 1.0x P/B with a dividend yield of 8.9%. First REIT’s DPU has experienced DPU weakness in recent years, in part due to IDR/SGD foreign currency volaƟ lity which has impacted unitholder returns. The proposed divestments will allow First REIT to fully exit from the Indonesia market and refocus
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We highlight OKP Holding’s ($0.69, up 5 cent) FY25 annual report
OKP’s market cap stands at S$370mln and currently trades at 7.4x forward PE and carries a yield of 2.9%. We currently have a TP of $1.03, representing 49.3% upside potential. We maintain OKP as our top pick in the construction sector given the cheap valuations and strong cash position forming close to 40% of their current market cap, Impact from the war such as steel and oil remains minimal and we take this sell down as an opportunity to BUY OKP Holdings |
