Singapore Equity Strategy - RHB Invest 2019-06-24: Revisiting Our Top Picks; Stay Defensive

Singapore Stock Top Picks - RHB Investment Research | SGinvestors.io CACHE LOGISTICS TRUST (SGX:K2LU) CDL HOSPITALITY TRUSTS (SGX:J85) FU YU CORPORATION LTD (SGX:F13) MANULIFE US REIT (SGX:BTOU) OXLEY HOLDINGS LIMITED (SGX:5UX) SHENG SIONG GROUP LTD (SGX:OV8) SILVERLAKE AXIS LTD (SGX:5CP) SINGAPORE TECH ENGINEERING LTD (SGX:S63) THAI BEVERAGE PUBLIC CO LTD (SGX:Y92) UNITED OVERSEAS BANK LTD (SGX:U11) WILMAR INTERNATIONAL LIMITED (SGX:F34)

Singapore Equity Strategy - Revisiting Our Top Picks; Stay Defensive

  • After delivering 6.5% in returns this month, STI’s forward 12.7x P/E is now closer to its historical average of 13.3x. With elevated economic uncertainties, we believe there exists downside risks to STI’s earnings.
  • Investors should stick with REITs, which should benefit from the likely decline in interest rate. Consumer is our preferred defensive sector.
  • Cache Logistics Trust replaces Starhill Global REIT and Oxley Holdings replaces HRnetGroup in our Singapore Top Picks.



Replace Starhill Global REIT with Cache Logistics Trust.



Oxley replaces HRnetGroup.



Economic uncertainties prevail.

  • The STI gained 1% after last week’s Federal Open Market Committee meeting confirmed a rate cut possibility. There has also been some optimism on the resumption of trade talks, with a likely meeting between the US and China at the G20 summit. While this may have calmed investors’ nerves temporarily, the long-term outlook is still unclear.
  • Uncertainty still prevails on Brexit, while tensions have risen in the Middle East between Iran and the US. While few expect a war to break out, President Trump’s tweet suggests that it is not completely off the table.


Stick with a portfolio of defensive stocks.




RHB's Top Singapore Stock Picks


Company Name Rating Target Price (SGD) % Upside P/E (x) Dec-19F P/B (x) Dec-19F Yield (%) Dec-19F
CACHE LOGISTICS TRUST (SGX:K2LU) BUY 0.83 3.7 11.5 1.2 7.6
CDL HOSPITALITY TRUSTS (SGX:J85) BUY 1.77 9.9 15.1 1.0 5.9
FU YU CORPORATION (SGX:F13) BUY 0.24 17.1 11.5 0.9 7.8
MANULIFE US REIT (SGX:BTOU)^ BUY 0.96 11.0 13.1 1.0 6.9
OXLEY HOLDINGS LIMITED (SGX:5UX)** BUY 0.41 24.2 11.0 0.9 4.5
SHENG SIONG GROUP (SGX:OV8) BUY 1.23 15.0 20.7 5.2 3.5
SILVERLAKE AXIS (SGX:5CP)** BUY 0.65 17.1 20.4 7.9 5.3
ST ENGINEERING LTD (SGX:S63) BUY 4.45 7.0 20.8 5.6 3.6
THAI BEVERAGE (SGX:Y92)* BUY 0.92 12.9 19.9 3.4 2.5
UNITED OVERSEAS BANK (SGX:U11) BUY 30.80 17.0 10.3 1.2 4.9
WILMAR INTERNATIONAL (SGX:F34) BUY 3.94 9.4 12.8 1.0 3.2

Note: *FY19 (Sep); **FY19 (Jun); ^USD; Data as at 21 Jun 2019





Shekhar Jaiswal RHB Securities Research | https://www.rhbinvest.com.sg/ 2019-06-24
SGX Stock Analyst Report BUY MAINTAIN BUY 0.830 SAME 0.830
BUY MAINTAIN BUY 1.770 SAME 1.770
BUY MAINTAIN BUY 0.240 SAME 0.240
BUY MAINTAIN BUY 0.960 SAME 0.960
BUY MAINTAIN BUY 0.410 SAME 0.410
BUY MAINTAIN BUY 1.250 SAME 1.250
BUY MAINTAIN BUY 0.650 SAME 0.650
BUY MAINTAIN BUY 4.450 SAME 4.450
BUY MAINTAIN BUY 0.920 SAME 0.920
BUY MAINTAIN BUY 30.800 SAME 30.800
BUY MAINTAIN BUY 3.940 SAME 3.940



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