Singapore Equity Strategy - RHB Invest 2019-11-26: Sep 2019 Quarter Earnings Review

Singapore Equity Strategy - RHB Invest  | SGinvestors.io SHENG SIONG GROUP LTD (SGX:OV8) UNUSUAL LIMITED (SGX:1D1) CSE GLOBAL LTD (SGX:544) FU YU CORPORATION LTD (SGX:F13) WILMAR INTERNATIONAL LIMITED (SGX:F34)

Singapore Equity Strategy - Sep 2019 Quarter Earnings Review




Plantation sector now rated OVERWEIGHT.



Earnings downgrades continue but Street expects growth in 2020

  • The Street’s 2020 earnings estimate for the STI, which witnessed a pause in downgrades between March and July, has declined by 2% since end-September following a weak 3Q19 results season. Most downgrades came from the telecommunication, offshore marine, and transport sectors. The Street’s net profit growth for 2020 now stands at 4.8%.


Downside risk to earnings.

  • The STI witnessed a sharp rebound in October on the back of compelling valuations, hopes of some resolution on the trade war between the US and China, and expectations of a likely turnaround in the electronics sector. While the index’s valuation remains reasonable amidst expected positive earnings growth for 2020, any escalation in trade tensions between the US and China could result in downgrades to the STI’s earnings growth.


The Straits Times Index STI offers one of the highest yields amongst Asian markets

  • The STI is currently trading at a forward yield of 4.2% (based on local currency). This is the highest amongst all Asian markets, exceeding Australia, Taiwan and Hong Kong’s 4.2%, 4.0% and 4.0% yields. We believe such a relatively high yield should provide downside support amidst a backdrop of weakening growth and macroeconomic headwinds.


Key Target Price Changes Post 3Q19 Results


Company Rating Target Price Change Report
Large Cap
CAPITALAND LIMITED (C31.SI) BUY UP CapitaLand - RHB Invest 2019-11-06: Growing Bigger & Stronger; Maintain BUY
KEPPEL CORPORATION LIMITED (BN4.SI) BUY UP Keppel Corporation - RHB Invest 2019-10-22: Temasek Offer – Prelude For Restructuring; BUY
SINGAPORE TECH ENGINEERING LTD (S63.SI) BUY DOWN ST Engineering - RHB Invest 2019-11-12: Improving Growth Outlook; Reiterate BUY
CITY DEVELOPMENTS LIMITED (C09.SI) NEUTRAL UP City Developments - RHB Invest 2019-11-14: Making Steady Progress
COMFORTDELGRO CORPORATION LTD (C52.SI) NEUTRAL DOWN ComfortDelGro - RHB Invest 2019-11-14: Weak 3Q19; Higher Costs Expected
DBS GROUP HOLDINGS LTD (D05.SI) NEUTRAL UP DBS - RHB Invest 2019-11-12: Wealth Management An Offset For NIM
SINGAPORE EXCHANGE LIMITED (S68.SI) NEUTRAL UP Singapore Exchange - RHB Invest 2019-10-25: 1QFY20 Driven By Currencies & Commodities
SINGTEL (Z74.SI) NEUTRAL UP SingTel - RHB Invest 2019-11-15: 1HFY20 Enterprise Weakness Rings On
THAI BEVERAGE PUBLIC CO LTD (Y92.SI) NEUTRAL UP Thai Beverage - RHB Invest 2019-11-25: Healthy Volume Growth
Mid Cap
FIRST RESOURCES LIMITED (EB5.SI) BUY UP First Resources - RHB Invest 2019-11-12: 2020 Biodiesel Allocation Up 63% Y-o-y; BUY
STARHUB LTD (CC3.SI) NEUTRAL DOWN StarHub - RHB Invest 2019-11-06: Executing On Cost Savings
Small Cap
APAC REALTY LIMITED (CLN.SI) BUY DOWN APAC Realty - RHB Invest 2019-11-14: Banking On Transaction Volume Recovery
AVI-TECH ELECTRONICS LIMITED (BKY.SI) BUY UP Avi-Tech Electronics - RHB Invest 2019-11-07: Earnings Bottomed, Better Years Ahead; BUY
BUMITAMA AGRI LTD. (P8Z.SI) BUY UP Bumitama Agri - RHB Invest 2019-11-12: Highly Sensitive To CPO Prices; Raise to BUY
CHINA AVIATION OIL(S) CORP LTD (G92.SI) BUY UP China Aviation Oil - RHB Invest 2019-11-04: Strong 3Q19 Results; Reiterate BUY
FOOD EMPIRE HOLDINGS LIMITED (F03.SI) BUY UP Food Empire - RHB Invest 2019-11-21: Instilling Stronger Discipline; Maintain BUY
HRNETGROUP LIMITED (CHZ.SI) BUY DOWN HRnetGroup - RHB Invest 2019-11-11: Challenges Lie Ahead; Still BUY
VALUETRONICS HOLDINGS LIMITED (BN2.SI) BUY UP Valuetronics - RHB Invest 2019-11-14: Light At The End Of the Tunnel; BUY
KIMLY LIMITED (1D0.SI) NEUTRAL UP Kimly - RHB Invest 2019-11-28: A Better Year Ahead; Stay NEUTRAL
SILVERLAKE AXIS LTD (5CP.SI) NEUTRAL DOWN Silverlake Axis - RHB Invest 2019-11-18: Tax & Higher Costs Weigh In; Still NEUTRAL
SINGAPORE MEDICAL GROUP LTD (5OT.SI) NEUTRAL DOWN Singapore Medical Group - RHB Invest 2019-11-13: Valuation Cheap But Can Wait; Downgrade To NEUTRAL



Top Picks.






Shekhar Jaiswal RHB Securities Research | https://www.rhbinvest.com.sg/ 2019-11-26
SGX Stock Analyst Report BUY MAINTAIN BUY 1.320 SAME 1.320
BUY MAINTAIN BUY 0.420 SAME 0.420
BUY MAINTAIN BUY 0.690 SAME 0.690
BUY MAINTAIN BUY 0.240 SAME 0.240
BUY MAINTAIN BUY 4.750 SAME 4.750



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