Singapore Market Focus - DBS Research 2020-01-13: Stabilising After A Wobbly Start

Singapore Market Focus - DBS Research | SGinvestors.io YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6) GENTING SINGAPORE LIMITED (SGX:G13) SINGAPORE AIRLINES LTD (SGX:C6L) HONGKONG LAND HOLDINGS LIMITED (SGX:H78)

Singapore Market Focus - Stabilising After A Wobbly Start




Shaky start to the year.

  • 2020 got off to a shaky start with an escalation in US-Iran tension that led to a jump in oil price and the Wuhan pneumonia rekindled bad memories of the 2003 SARS outbreak. Fortunately, investors’ fear of a US-Iran military conflict eased, and oil price fell back to “pre-tension” levels.
  • Travel and tourism stocks have held up well despite the Wuhan pneumonia as the number infected has not accelerated ( < 100 vs 8,422 for SARS), with zero fatality (vs 11% for SARS) and no evidence of human-to-human transmission so far. The Australian bushfire disaster has also had no material financial impact on listed companies here.


Phase 1 deal in focus.

  • While the events above warrant continued monitoring, we see investors’ focus turning to the anticipated signing and details of the US-China Phase 1 deal on 15 January. Unless the developments stated above degenerate rapidly, we continue to see STI support at 3195 (more likely) or at worst 3160 (less likely).
  • (see also STI Constituents Target Prices & Stock Ratings)


Positive on hospitality sector.



Bombed-out cyclicals with recovery potential.

  • Recovery optimism is on the uptick with US-China trade tensions on the mend, accommodative monetary policies and fiscal stimulus likely to pick up. We see opportunity in cyclical stocks with good earnings recovery potential that are trading at a depressed valuation.
  • Our picks are
    1. Yangzijiang Shipbuilding (SGX:BS6) – Near net cash of S$1/share and 0.7x P/BV -1SD of its 4-year average;
    2. Genting Singapore (SGX:G13) - 7.0x EV/EBITDA (FY19) that is around -1.5SD of its mean and notably below the 12.8x median of regional peers;
    3. Singapore Airlines (SGX:C6L) - 0.87x FY19 & FY20 P/BV that is c. -1SD against its 10-year average; and
    4. Hongkong Land (SGX:H78) - 54% discount discount over 10-year period.
  • Click on view full report button below for complete analysis.





Kee Yan YEO CMT DBS Group Research | Janice CHUA DBS Research | https://www.dbsvickers.com/ 2020-01-13
SGX Stock Analyst Report BUY MAINTAIN BUY 1.680 SAME 1.680
BUY MAINTAIN BUY 1.200 SAME 1.200
BUY MAINTAIN BUY 10.400 SAME 10.400
BUY MAINTAIN BUY 6.640 SAME 6.640



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