CAPITALAND LIMITED (SGX:C31)
FRASERS CENTREPOINT TRUST (SGX:J69U)
SIA ENGINEERING CO LTD (SGX:S59)
SINGAPORE TECH ENGINEERING LTD (SGX:S63)
THAI BEVERAGE PUBLIC CO LTD (SGX:Y92)
WILMAR INTERNATIONAL LIMITED (SGX:F34)
YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6)
Alpha Picks For 2020 - Analysts' Singapore Large Cap Picks
- CAPITALAND LIMITED (SGX:C31) (Rating: ADD, Target Price: S$4.15)
- FRASERS CENTREPOINT TRUST (SGX:J69U) (Rating: ADD, Target Price: S$2.89)
- SIA ENGINEERING (SGX:S59) (Rating: ADD, Target Price: S$3.30)
- ST ENGINEERING (SGX:S63) (Rating: ADD, Target Price: S$4.47)
- THAI BEVERAGE (SGX:Y92) (Rating: ADD, Target Price: S$1.00)
- WILMAR INTERNATIONAL (SGX:F34) (Rating: ADD, Target Price: S$4.58)
- YANGZIJIANG SHIPBUILDING (SGX:BS6) (Rating: ADD, Target Price: S$1.45)
CAPITALAND LIMITED (SGX:C31) (Rating: ADD, Target Price: S$4.15)
- Post the Ascendas-Singbridge merger, CapitaLand's development pipeline has doubled to 13.9m sq m. India has emerged visibly, accounting for 35% of developable GFA while industrial/business parks/logistics segment now make up c.45% of development GFA. This will enable the group to cater to the growing new economy such as e-commerce and knowledge economies, and cater to urbanisation trends through township developments.
- With assets under management of S$132bn at end-3Q19, CapitaLand ranks among the top 15 global real estate investment managers by real estate AUM. With its broader asset class reach and wider geographical coverage, it could further attract new capital partners and potentially establish new platforms in the longer run to grow its fee income.
- Gearing declined to 0.69x as at end-3Q19 and appears on track to reach its 0.64x target by end-2020. ROE achieved YTD stands at 5.8%. We expect CapitaLand to continue looking for opportunities to trim non-core assets, extract value from existing properties or recycle assets into its REITs and fund platforms.
- See Capitaland Share Price; Capitaland Target Price; Capitaland Analyst Reports; Capitaland Dividend History; Capitaland Announcements; Capitaland Latest News.
FRASERS CENTREPOINT TRUST (SGX:J69U) (Rating: ADD, Target Price: S$2.89)
- Frasers Centrepoint Trust is the second largest listed mall landlord and a pure play suburban mall operator in Singapore. The focus on suburban malls makes it more resilient against the weaker consumer spending.
- While its existing malls provide income stability, the recent acquisition of Waterway Point, and asset injection opportunity from Real Estate Asia Retail Fund Limited would provide Frasers Centrepoint Trust with a new growth trajectory.
- Frasers Centrepoint Trust offers good dividend yield spread of 2.9%, slightly lower than CapitaLand Mall Trust (SGX:C38U)’s yield spread of 3.1% but higher than Mapletree Commercial Trust (SGX:N2IU)’s 2.3%.
- See Frasers Centrepoint Trust Share Price; Frasers Centrepoint Trust Target Price; Frasers Centrepoint Trust Analyst Reports; Frasers Centrepoint Trust Dividend History; Frasers Centrepoint Trust Announcements; Frasers Centrepoint Trust Latest News.
SIA ENGINEERING (SGX:S59) (Rating: ADD, Target Price: S$3.30)
- SIA Engineering group EBITDA margin for 2QFY3/20 was a positive surprise at 15.2% from a low of 9.3% in 1Q19. There was a positive jaw achieved as 1HFY20 revenue rose 1% y-o-y to S$513m while opex was down 2% y-o-y to S$475m on good control of staff costs (S$249m).
- SIA Engineering handled more flights than competitors in Changi. There have been several new contracts secured including Vistara, Jeju Air and AirAsia X.
- We like SIA Engineering for M&A angle, margin expansion, decent yield of 4% and strong net cash pile of S$488m.
- See SIA Engineering Share Price; SIA Engineering Target Price; SIA Engineering Analyst Reports; SIA Engineering Dividend History; SIA Engineering Announcements; SIA Engineering Latest News; .
ST ENGINEERING (SGX:S63) (Rating: ADD, Target Price: S$4.47)
- The consolidation of MRAS continued to yield strong profits (c.S$22m in 3Q19, or 33% of aerospace profit of S$65m). Production ramp-up is according to Airbus demand of c.60 units/month. We are looking at c.14% y-o-y profit growth for Aero in FY20F. Order momentum was impressive at S$1bn in 3Q19, YTD at S$3.1bn (2018: S$2.1bn).
- YTD wins for electronics totalled S$2.35bn and could hit a record c.S$3bn if the momentum continues. The next key driver for electronics could come from the new satellite communication business (Newtec) consolidation that begins in 4Q19.
- We like ST Engineering for its diversification of business. We believe the 15% y-o-y earnings growth in FY19-20F could be supported by the execution of its S$15.9bn order book.
- See ST Engineering Share Price; ST Engineering Target Price; ST Engineering Analyst Reports; ST Engineering Dividend History; ST Engineering Announcements; ST Engineering Latest News.
THAI BEVERAGE (SGX:Y92) (Rating: ADD, Target Price: S$1.00)
- We are positive on the stabilised domestic consumption environment in Thailand, and optimistic that the ongoing government measures will continue to have spillover benefits on farm incomes.
- M&As and improvements in Saigon Alcohol Beer and Beverages Corporation (SABECO) which has been in transformation mode are medium-term drivers.
- Thai Beverage trades at FY9/20F P/E of 18.4x, below its 5-year average and peers.
- Potential re-rating catalysts are higher revenue and margins and M&As involving SABECO. Risks to our call are weaker revenue and margins for its domestic business and SABECO.
- See Thai Beverage Share Price; Thai Beverage Target Price; Thai Beverage Analyst Reports; Thai Beverage Dividend History; Thai Beverage Announcements; Thai Beverage Latest News; .
WILMAR INTERNATIONAL LIMITED (SGX:F34) (Rating: ADD, Target Price: S$4.58)
- Wilmar is on track to list Yihai Kerry Arawana Holdings (YKA) in China; we estimate this could catalyse its share price to S$4.14-5.38 per share.
- The group sounded confident of a strong 4Q19 earnings delivery, thanks to early CNY demand and higher palm products prices.
- Wilmar shared its plans to triple its flour and rice production capacity which will boost its consumer product volumes and profit over time, leading to more stable earnings stream and higher profit margin for its processed agriculture products.
- We maintain our ADD call as the market has yet to fully price in YKA's listing value.
- Potential bonus: a special dividend declared post YKA's listing.
- See Wilmar Share Price; Wilmar Target Price; Wilmar Analyst Reports; Wilmar Dividend History; Wilmar Announcements; Wilmar Latest News.
YANGZIJIANG SHIPBUILDING (SGX:BS6) (Rating: ADD, Target Price: S$1.45)
- Yangzijiang Shipbuilding expects its order for 2019 to b close to US$2bn, although it has only done US$696m YTD. We believe there could be some new contracts in the pipeline. We keep our US$1bn order forecast intact for FY19. Order book stands at US$3.18bn for 83 vessels.
- There is newsflow of M&As among the Singapore yards, so interest could return to Yangzijiang Shipbuilding as it is trading at a significant discount despite firmer earnings and stronger balance sheet.
- It is trading close to 5-year trough of 0.7x CY19F P/BV, a discount to Singapore yards (1.2x).
- Catalysts are stronger orders and the chairman returning to duty.
- See Yangzijiang Share Price; Yangzijiang Target Price; Yangzijiang Analyst Reports; Yangzijiang Dividend History; Yangzijiang Announcements; Yangzijiang Latest News.
See also: CGS-CIMB Analysts’ Alpha Picks For 2020 (Small Cap)
LIM Siew Khee
CGS-CIMB Research
|
https://www.cgs-cimb.com
2019-11-19
SGX Stock
Analyst Report
4.150
SAME
4.150
2.900
SAME
2.900
3.300
SAME
3.300
4.470
SAME
4.470
1.000
SAME
1.000
4.580
SAME
4.580
1.45
SAME
1.45
