Singapore Market Strategy - CGS-CIMB Research 2020-06-15: Slightly Earlier Reopening

CAPITALAND MALL TRUST (SGX:C38U) COMFORTDELGRO CORPORATION LTD (SGX:C52) GENTING SINGAPORE LIMITED (SGX:G13)

Singapore Market Strategy - Slightly Earlier Reopening

Singapore will enter into phase 2 of economy reopening on 19 Jun 2020, slightly earlier than our expected last week of Jun. This to last a few months.
Retail businesses may reopen and F&B dine-in is allowed with up to five persons sitting together. Social distancing measures remain.
Recovery plays: CapitaLand Mall Trust, Frasers Centrepoint Trust, SPH REIT, Starhill Global REIT, Mapletree Commercial Trust, Suntec REIT (to some extent), ComfortDelGro, Koufu and Jumbo Group.

With community Covid-19 cases under control at less than 20 on average since phase 1 (2 Jun), Singapore is ready to resume Phase 2 of economy reopening after 11.59pm 18 Jun, slightly earlier than our “before end-Jun” expectations. In general, small group social gatherings of up to any five persons are allowed with no mixing between groups.
Retail businesses may re-open their physical outlets. Food and beverage (F&B) dine-in will also be allowed to resume with each group not more than five persons. Liquor sales and consumptions are to end by 10:30pm. There will also be no live music, television and video screenings at this stage.
Larger public venues with high foot traffic such as malls and large standalone retail outlets will be subject to capacity limits. Operators are required to prevent crowds or long queues from building up within/in the immediate vicinity of their premises. Phase 2 is likely to take a few months.

Personal health and wellness and home-based services, tuition and other private enrichment classes can resume, with the exception of singing or voice training classes. Sports, parks and other public facilities will also open, including playgrounds, beaches, swimming complexes, sports halls, gyms, fitness studios, bowling centres and function rooms.
Activities that are not allowed include large-scale religious services, libraries, museums, conferences, exhibitions and entertainment venues such as bars, nightclubs, cinemas, as well as indoor and outdoor attractions.
Telecommuting must remain the default for all businesses where feasible which means traffic flow may resume at a much slower pace. We believe market has somewhat priced in the optimism of reopening since phase 1.
In the upcoming 2Q earnings, the lack of topline is likely to be cushioned by recognition of job support scheme (JSS), with some corporates amortising the JSS income over three quarters (till end-2020) to avoid lumpiness of profit.

LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2020-06-15

SGX Stock Analyst Report ADD MAINTAIN ADD 2.240 SAME 2.240

HOLD MAINTAIN HOLD 1.500 SAME 1.500

ADD MAINTAIN ADD 0.760 SAME 0.760