CAPITALAND COMMERCIAL TRUST (SGX:C61U)
COMFORTDELGRO CORPORATION LTD (SGX:C52)
KEPPEL CORPORATION LIMITED (SGX:BN4)
MAPLETREE COMMERCIAL TRUST (SGX:N2IU)
SINGAPORE TECH ENGINEERING LTD (SGX:S63)
SUNTEC REAL ESTATE INV TRUST (SGX:T82U)
UNITED OVERSEAS BANK LTD (SGX:U11)
UOL GROUP LIMITED (SGX:U14)
RIVERSTONE HOLDINGS LIMITED (SGX:AP4)
FRENCKEN GROUP LIMITED (SGX:E28)
CSE GLOBAL LTD (SGX:544)
Alpha Stock Picks for 2H2019 - Prefer Liquid & Large Caps
- Singapore top stock picks for 2H 2019:
- We remove DBS Group (SGX:D05), City Developments (SGX:C09), CapitaLand (SGX:C31), CDL Hospitality Trusts (SGX:J85).
- Favourite Singapore small cap stocks:
CIMB Analysts’ Alpha Picks for 2H19 (Large Cap)
CapitaLand Commercial Trust (Rating: ADD, Target Price: S$2.03)
- CapitaLand Commercial Trust (SGX:C61U) continues to enjoy high occupancy and positive uplifts in rents.
- CapitaLand Commercial Trust’s lease renewal profile over FY19-20F allows it to have one of the highest exposures to the rental upcycle amongst office REITs.
- Due to the limited mid-term supply of office space in the CBD, we expect office rents to continue trending up in 2019F, at c.5% y-o-y.
- See Capitaland Commercial Trust Share Price | Capitaland Commercial Trust Target Price | Capitaland Commercial Trust Analyst Reports | Capitaland Commercial Trust Dividends | Capitaland Commercial Trust Announcements | Capitaland Commercial Trust Latest News.
ComfortDelGro (Rating: ADD, Target Price: S$2.82)
- Recovery in ComfortDelGro (SGX:C52)'s taxi revenues did not pan out as expected in 1Q19. We now expect a y-o-y decline in taxi revenue this year amid weakness in China and a higher fleet idle rate in Singapore.
- Nonetheless, we anticipate 4-9% core FY19-20F EPS growth on the back of contributions from new acquisitions, and stronger Australia bus revenue.
- Potential upside catalysts:
- upcoming new regulatory framework in Singapore that could inhibit growth of ride-hailing platforms; and
- further M&As ahead.
- ComfortDelGro is trading at 16x FY20F P/E, with 4.6% dividend yield.
- See ComfortDelGro Share Price | ComfortDelGro Target Price | ComfortDelGro Analyst Reports | ComfortDelGro Dividends | ComfortDelGro Announcements | ComfortDelGro Latest News.
Keppel Corporation (Rating: ADD, Target Price: S$8.41)
- Keppel Corporation (SGX:BN4)’s valuation is undemanding, at 0.9x CY19F P/BV, below -1 s.d. of 10-year mean. Our Target Price of S$8.41 is based on SOP valuations: 35% discount to RNAV for property, and 1.5x CY19F P/BV for its offshore and marine (O&M) business.
- Keppel Corporation's O&M order win of S$1.5bn YTD has outshone Sembcorp Marine (SGX:S51)’s S$175m. It has also shown good progress in winning renewable energy contracts to cushion the impact of a lacklustre rig building sector.
- We see multiple catalysts for Keppel Corporation including
- re-development of Keppel Bay plot 4,
- injection of another data centre, SG4, into Keppel DC REIT (SGX:AJBU),
- successful integration of M1 Limited (SGX:B2F), and
- resumption of land sale at its Sino-Singapore Tianjin Eco-City (SSTEC).
- See Keppel Corp Share Price | Keppel Corp Target Price | Keppel Corp Analyst Reports | Keppel Corp Dividends | Keppel Corp Announcements | Keppel Corp Latest News.
Mapletree Commercial Trust (Rating: ADD, Target Price: S$2.03)
- We think Mapletree Commercial Trust (SGX:N2IU)’s two crown jewels, Vivocity and MBC I, will continue to grow steadily in terms of rental income. Vivocity is one of the few destination malls in Singapore and stands to benefit from the Greater Southern Waterfront developments announced by the Urban Redevelopment Authority.
- We expect MBC I to benefit from decentralisation efforts due to its proximity to the CBD area, grade-A office specifications and lower rental rates vis-à-vis CBD offices.
- A key potential positive catalyst for its share price is the acquisition of MBC II, which could raise FY20-21F DPU by c.5%.
- See Mapletree Commercial Trust Share Price | Mapletree Commercial Trust Target Price | Mapletree Commercial Trust Analyst Reports | Mapletree Commercial Trust Dividends | Mapletree Commercial Trust Announcements | Mapletree Commercial Trust Latest News.
ST Engineering (Rating: ADD, Target Price: S$4.43)
- Acquisition-led growth from subsidiaries MRA Systems (MRAS) in 2019 and Newtech in 2020 will help break ST Engineering (SGX:S63)’s past five years’ lacklustre -3% annual growth. We forecast y-o-y growth of 22% for FY19F and 11% for FY20F.
- Stronger-than-expected revenue recognition in land systems as it delivers the next-generation armoured fighting vehicle (NGAFV) to the Singapore Army in 3Q19-4Q19 could provide 3% upside to our earnings forecast for FY20F.
- ST Engineering is a quality name with strong fundamentals to weather uncertainty. Its YTD S$15.1bn of order book provides multi-year earnings visibility.
- See 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
Suntec REIT (Rating: ADD, Target Price: S$2.06)
- Suntec REIT (SGX:T82U) has exposure to the rising office cycle and improved retail performance.
- The stronger shopper traffic and tenant sales at its Suntec Mall could allow it to benefit from stronger-than-expected retail rental hikes.
- We think Suntec REIT’s earnings visibility is strengthened with the announcement of pre-leasing of 9 Penang Rd to UBS.
- See Suntec REIT Share Price | Suntec REIT Target Price | Suntec REIT Analyst Reports | Suntec REIT Dividends | Suntec REIT Announcements | Suntec REIT Latest News.
UOB (Rating: ADD, Target Price: S$29.58)
- United Overseas Bank (UOB, SGX:U11) trades at 1.04x CY19F P/BV, below its long-term mean of 1.3x. UOB is a relative pick among banks given its attractive valuations and 10.9% CY19F ROE.
- We believe UOB is well-placed to benefit from a shift in supply chains out of Greater China into surrounding ASEAN economies in the event of further retaliatory measures by either the US or China. Market-related income also features the least for UOB, at 13% of total income in FY18, rendering it less susceptible to a prolonged period of market volatility.
- UOB's FY19F dividend payout is likely to be maintained at 50%, in our view.
- See UOB Share Price | UOB Target Price | UOB Analyst Reports | UOB Dividends | UOB Announcements | UOB Latest News.
UOL Group (Rating: ADD, Target Price: S$8.45)
- UOL Group (SGX:U14)'s planned roll out of two residential projects, totaling 1,130 units, in Singapore by Jun/Jul 2019 should generate newsflow, potentially serving as a share price catalyst.
- UOL has a large investment property portfolio. Its office and retail assets should continue to benefit from cap rate compression, thanks to the benign interest rate outlook.
- UOL is trading at attractive valuations, at 42% discount to RNAV.
- See UOL Group Share Price | UOL Group Target Price | UOL Group Analyst Reports | UOL Group Dividends | UOL Group Announcements | UOL Group Latest News.
CIMB Analysts’ Alpha Picks for 2H19 (Small Cap)
CSE Global (Rating: ADD, Target Price: S$0.60)
- CSE Global (SGX:544) currently trades at 11.0x CY20F P/E vs. our target of 13.5x (based on historical 5-year mean). End-1Q19 net cash of S$34.8m will support M&A opportunities and yearly DPS of 2.75 Scts p.a.
- Order intake of S$87.5m in 1Q19 took end-Mar order backlog to S$182.2m (vs. S$181m at end-Dec 2018).
- Forward order book to be buoyed by “flow contracts”. Infrastructure projects have been a help. In the longer term, CSE Global's collaboration with Malaysian-based international engineering services company Serba Dinamik could lead to downstream O&G, power and utilities contracts from the Middle East and Malaysia.
- See CSE Global Share Price | CSE Global Target Price | CSE Global Analyst Reports | CSE Global Dividends | CSE Global Announcements | CSE Global Latest News.
Frencken Group Ltd (Rating: ADD, Target Price: S$0.90)
- Frencken Group (SGX:E28) delivered strong 27% y-o-y growth in 1Q19, within expectations, led by robust Industrial Automation (IA) performance.
- Seagate’s goal to mass produce new heat-assisted magnetic recording (HAMR)-based hard disk drives (HDDs) towards end-2019 could lead to further upside in Frencken Group's IA segment; that would support our robust 18.7% FY19F EPS growth forecast.
- Frencken Group is trading at an undemanding valuation of 6.9x FY20F P/E, 27% discount to domestic peers' 9.5x, with 4.2% dividend yield.
- See Frencken Group Share Price | Frencken Group Target Price | Frencken Group Analyst Reports | Frencken Group Dividends | Frencken Group Announcements | Frencken Group Latest News.
Riverstone Holdings (Rating: ADD, Target Price: S$1.22)
- Riverstone (SGX:AP4)'s valuation dipped to an appealing level of 13.5x CY20F P/E (below 5-year average of 14.8x) following the absence of EPS growth in the past three quarters.
- Recent uptrend in US$/RM rate and continued low raw material prices may benefit Riverstone via stabilised profit margins and 16% expansion in annual glove production capacity to 10.4bn in FY19F.
- Possible beneficiary of escalating US-China trade war as further tariff hikes could hamper price competitiveness of China glove exports, benefiting Malaysian glovemakers including Riverstone.
- See Riverstone Share Price | Riverstone Target Price | Riverstone Holdings Analyst Reports | Riverstone Dividends | Riverstone Announcements | Riverstone Latest News.
Previous Reports
See also
LIM Siew Khee
CGS-CIMB Research
|
Singapore Research Team
CGS-CIMB Research
|
https://research.itradecimb.com/
2019-05-21
SGX Stock
Analyst Report
2.030
SAME
2.030
2.820
SAME
2.820
8.410
SAME
8.410
2.030
SAME
2.030
4.430
SAME
4.430
2.060
SAME
2.060
29.580
SAME
29.580
8.450
SAME
8.450
1.220
SAME
1.220
0.900
SAME
0.900
0.600
SAME
0.600
