Singapore Strategy - DBS Research 2017-11-27: 2018 Top 15 Stock Picks (Part 3 Of 3)

Singapore Strategy - DBS Vickers 2017-11-27: 2018 Top 15 Stock Picks (Part 3 Of 3) Singapore Stock Market 2018 Top Stock Picks BREADTALK GROUP LIMITED 5DA.SI CDL HOSPITALITY TRUSTS J85.SI CHINA AVIATION OIL(S) CORP LTD G92.SI CITYNEON HOLDINGS LIMITED 5HJ.SI HI-P INTERNATIONAL LIMITED H17.SI

Singapore Strategy - 2018 Top 15 Stock Picks (Part 3 Of 3)




BreadTalk Group (Rating: BUY, Target Price: $2.01) 

  • We remain positive on BreadTalk as ongoing consolidation of underperforming outlets would yield better margins going forward. A near-term catalyst would be the sale of stakes in properties such as CHIJMES and AXA Tower to unlock shareholder value. Based on 3Q17 results, growth drivers remain intact and the turnaround in Bakery division, led by store growth and better profitability in FY18F, will drive earnings growth next year. 
  • BreadTalk’s valuation, based on its core business (ex-property investments), is compelling at 17x FY18F PE. We expect 20% EPS CAGR during FY17F-19F.
  • See report: Breadtalk Group Ltd - Dough Is Holding Shape


CDL Hospitality Trust (Rating: BUY, Target Price: $1.75) 

  • With supply expected to ease over the next three years, we project a recovery in the Singapore hospitality market with revenue per available room (RevPAR) potentially growing by 3% p.a. or higher. This combined with CDREIT’s recent acquisitions should result in DPU CAGR of 7% between 2017 and 2019 based on CDREIT’s 90% payout ratio which compares favourably against flattish or modest 1-2% growth for many other REITs.
  • See report: CDL Hospitality Trusts - The Ace In Your Portfolio


China Aviation Oil (Rating: BUY, Target Price: $2.08) 

  • We continue to like China Aviation Oil given its monopolistic position as the sole importer of bonded jet fuel into China, and for its 33% stake in the exclusive jet fuel refueller (SPIA) in Shanghai Pudong International Airport. It also has a growing international jet fuel supply and trading business that will increasingly benefit from CAO’s greater scale. 
  • It is a beneficiary of growing air travel demand both in China and globally as well.
  • See report: China Aviation Oil - Bright Prospects


Cityneon Holdings (Rating: BUY, Target Price: $1.45) 

  • With the acquisition of Jurassic World, Cityneon is now on a stronger and firmer growth path. Together with the existing two Intellectual Property rights (IPs) – Avengers and Transformers - Cityneon has added a third growth leg to help the group to propel to even greater heights. 
  • We continue to expect Cityneon to deliver explosive FY16-19F EPS CAGR growth of 165%. Trading at a low PE to growth ratio of 0.2x based on FY2018F earnings, Cityneon is attractive to investors seeking unique ideas in the entertainment industry. An expanding project pipeline, and focus on higher margin projects for the traditional business are catalysts.
  • See report: Cityneon Holdings - Building Growth Platform


Hi-P International (Rating: BUY, Target Price: $2.30) 

  • Hi-P is riding on strong earnings momentum, driven by new products in the Wireless and IoT segments, supported by a bigger and more stable customer base for the Consumer Electronics division. We are expecting EPS CAGR of 34% for FY16-FY19F
  • Hi-P is in a sweet spot now as more than half of its earnings are derived from the Wireless (smartphone) and Computer Peripherals (IoT segment, e.g. smart home) segments, which are expected to continue to do well in the next 1-2 years.
  • See report: Hi-P International - Strong Earnings Momentum







Singapore Research DBS Vickers | http://www.dbsvickers.com/ 2017-11-27
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 2.010 Same 2.010
BUY Maintain BUY 1.750 Same 1.750
BUY Maintain BUY 2.080 Same 2.080
BUY Maintain BUY 1.450 Same 1.450
BUY Maintain BUY 2.300 Same 2.300



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