Alpha Picks For 2020 - CGS-CIMB Research 2019-11-19: Analysts' Singapore Large Cap Picks

Alpha Picks For 2020 - CGS-CIMB Research | SGinvestors.io 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)

  • 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)



SIA ENGINEERING (SGX:S59) (Rating: ADD, Target Price: S$3.30)



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)



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)





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 ADD MAINTAIN ADD 4.150 SAME 4.150
ADD MAINTAIN ADD 2.900 SAME 2.900
ADD MAINTAIN ADD 3.300 SAME 3.300
ADD MAINTAIN ADD 4.470 SAME 4.470
ADD MAINTAIN ADD 1.000 SAME 1.000
ADD MAINTAIN ADD 4.580 SAME 4.580
ADD MAINTAIN ADD 1.45 SAME 1.45



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