Singapore Stock Picks 2H2018
CIMB Analysts Alpha Picks
Singapore Large Cap Stocks Picks
DBS GROUP HOLDINGS LTD
SGX:D05
KEPPEL CORPORATION LIMITED
SGX:BN4
SHENG SIONG GROUP LTD
SGX:OV8
SINGAPORE POST LIMITED
SGX:S08
UOL GROUP LIMITED
SGX:U14
THAI BEVERAGE PUBLIC CO LTD
SGX:Y92
SINGAPORE TECH ENGINEERING LTD
SGX:S63
Stock Strategy Singapore - CIMB Analysts’ Alpha Picks For 2H18 (Large Cap)
- Our large-cap new Alpha picks are: DBS (strong earnings growth), Keppel Corp (higher dividend potential), Sheng Siong Group (positive Singapore consumer sentiment).
- We removed Venture Corp (trade/tech tensions and well-owned) and Sembcorp Marine (weak margin).
- Other large-cap Alpha picks are: UOL Group, Singapore Post, ST Engineering, Thai Beverage.
CIMB Analysts’ Alpha Picks for 2H18 (Large Cap)
DBS (Rating: ADD, Target Price: S$34.00)
- With its strong S$-CASA franchise, DBS is the most rate-sensitive bank in Singapore and would benefit the most from rising rates.
- We view the bank as one of the most digital-savvy in ASEAN. Digitalisation enables DBS to increase its wallet share at lower marginal costs in its core markets of Singapore and Hong Kong, and scale profitably in the emerging markets of Indonesia.
- DBS is among the first to be able to measure the financial value from digitalisation. It expects to reduce CIR by 50bp p.a. over the next five years to a long-term target of 40%.
- Our GGM-based Target Price implies 1.8x CY18F P/BV vs. sustainable ROE of 14%. Its CY18F dividend yield of c.4% should also be supportive of DBS' share price.
- DBS GROUP HOLDINGS LTD (SGX:D05) DBS (SGX:D05) Share Price DBS (SGX:D05) Target Price DBS (SGX:D05) Analyst Reports DBS (SGX:D05) Corporate Actions DBS (SGX:D05) Announcements DBS (SGX:D05) Latest News DBS (SGX:D05) Blog Articles
Keppel Corp (Rating: ADD, Target Price: S$10.00)
- Key catalysts for KEP is the potential of higher dividend on the back of stronger gains from its asset recycling and stronger recovery in offshore and marine (O&M) margins.
- High oil prices should support the demand for rigs which could lead to more de-risking of its jack-up inventory, resulting in improvement in operating leverage.
- KEP is also a proxy to ride the property cycle in Singapore and emerging markets with its land bank of 61,000 homes.
- The stock is trading c.1.15x CY18F P/BV, or close to -1 s.d. of its 5-year mean (1.4x).
- KEPPEL CORPORATION LIMITED (SGX:BN4) Keppel Corp (SGX:BN4) Share Price Keppel Corp (SGX:BN4) Target Price Keppel Corp (SGX:BN4) Analyst Reports Keppel Corp (SGX:BN4) Corporate Actions Keppel Corp (SGX:BN4) Announcements Keppel Corp (SGX:BN4) Latest News Keppel Corp (SGX:BN4) Blog Articles
Sheng Siong Group (Rating: ADD, Target Price: S$1.18)
- The company is seeing swifter supermarket wins, post a slowdown in FY17. It won two new stores in 1Q18, faster swifter than our expectations as we had projected them coming on board in 2Q18. As such, we lift our end-CY18F store count to 50 (vs. 44 at end-FY17). Its tender pipeline is still robust, given the ample supermarket opportunities for the year; hence there could be upward bias to our store count.
- SSG boasts a strong balance sheet, with net cash/share of 5S$cts as at end-1Q18. SSG is trading at 12M forward P/E of c.19.6x, below its 3-year average mean despite its stable ROE of 25.4%. It has a FY18F yield of 3.4%.
- SHENG SIONG GROUP LTD (SGX:OV8) Sheng Siong (SGX:OV8) Share Price Sheng Siong (SGX:OV8) Target Price Sheng Siong (SGX:OV8) Analyst Reports Sheng Siong (SGX:OV8) Corporate Actions Sheng Siong (SGX:OV8) Announcements Sheng Siong (SGX:OV8) Latest News Sheng Siong (SGX:OV8) Blog Articles
Singapore Post (Rating: ADD, Target Price: S$1.59)
- We think SPOST entered FY3/19F on a stronger footing, with its major capex cycle over (plus net cash position), and earnings improving in both logistics and e-commerce segments.
- We also expect its collaboration with Alibaba to underpin stronger international mail volume growth, hence mitigating margin pressure from the terminal due changes.
- Full rental contribution from SPC retail mall is another income boost. Key potential re-rating catalysts are faster- than-expected e-commerce turnaround and further strategic partnerships.
- SINGAPORE POST LIMITED (SGX:S08) SingPost (SGX:S08) Share Price SingPost (SGX:S08) Target Price SingPost (SGX:S08) Analyst Reports SingPost (SGX:S08) Corporate Actions SingPost (SGX:S08) Announcements SingPost (SGX:S08) Latest News SingPost (SGX:S08) Blog Articles
ST Engineering (Rating: ADD, Target Price: S$3.80)
- We think the key catalysts for STE in the next six months is the potential award of defence contract to supply amphibious combat vehicles (in collaboration with SAIC) to the US Marine Corps. The results of the bid will be known by end-Jun/Jul.
- The trend of strong engine maintenance, repair and overhaul revenue is likely to last for 3-4 years as STE ramps up more capacity to cope with the demand recovery.
- It is also a proxy to ride the secular trend of smart cities spending globally. The stock is trading at c.19x CY19F P/E, below its 5-year mean of c. 21x.
- SINGAPORE TECH ENGINEERING LTD (SGX:S63) ST Engineering (SGX:S63) Share Price ST Engineering (SGX:S63) Target Price ST Engineering (SGX:S63) Analyst Reports ST Engineering (SGX:S63) Corporate Actions ST Engineering (SGX:S63) Announcements ST Engineering (SGX:S63) Latest News ST Engineering (SGX:S63) Blog Articles
Thai Beverage (Rating: ADD, Target Price: S$0.98)
- We believe that its downside risks are relatively priced-in post the stock's 14.1% decline YTD. At 12M forward P/E of c.16.5x, it is trading at close to 1 s.d. below its 5-year average mean, which historically was the level when its net profits were THB4.2bn-5.9bn/ quarter vs. THB6.3bn currently.
- The company is in the midst of transforming into a truly regional beverage play post acquiring Myanmar’s Grand Royal and 26.3% of Vietnam’s SABECO; this could provide longer-term upsides.
- Potential catalysts for its domestic alcohol sales volumes are the World Cup celebrations in 3QFY9/18, and the coronation of the new king in FY19F. It also has bullets from the potential corporate restructuring of F&N/FCL and further inorganic growth in its food business.
- THAI BEVERAGE PUBLIC CO LTD (SGX:Y92) Thai Beverage (SGX:Y92) Share Price Thai Beverage (SGX:Y92) Target Price Thai Beverage (SGX:Y92) Analyst Reports Thai Beverage (SGX:Y92) Corporate Actions Thai Beverage (SGX:Y92) Announcements Thai Beverage (SGX:Y92) Latest News Thai Beverage (SGX:Y92) Blog Articles
UOL Group (Rating: ADD, Target Price: S$9.65)
- 1Q18 net profit of S$73.8m was slightly below expectation, at 17% of our FY18 forecast.
- Amber 45 launch saw strong preview interest; Tre Ver to be rolled out in 3Q.
- Office rents to benefit from office upcycle; hotel performance to improve in 2H18.
- UOL GROUP LIMITED (SGX:U14) UOL Group (SGX:U14) Share Price UOL Group (SGX:U14) Target Price UOL Group (SGX:U14) Analyst Reports UOL Group (SGX:U14) Corporate Actions UOL Group (SGX:U14) Announcements UOL Group (SGX:U14) Latest News UOL Group (SGX:U14) Blog Articles
LIM Siew Khee
CGS-CIMB
|
Singapore Research Team
CGS-CIMB
|
https://research.itradecimb.com/
2018-05-24
SGX Stock
Analyst Report
34
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34
10.000
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10.000
1.180
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1.180
1.590
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1.590
9.650
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3.800
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3.800
