Raffles Medical Group (RFMD SP)
Limited Near-term Negative Impact From Insurance Co-pay
While the change in insurance co-pay terms for new policies could have some negative near-term impact, we see limited impact on RMG, given its group practice model, price transparency and peer-doctor review. Maintain BUY and DCF-based target price of S$1.32.
Perennial Real Estate Holdings
Purchasing the remaining 50% of Capitol Singapore
■ PREH to buy remaining 50% of Capitol Singapore.
■ Gearing could rise to 0.7-0.8x; opportunity to generate S$40m-50m of recurrent income.
■ Raising RNAV by 5% as acquisition cost is below current market replacement cost.
■ Maintain Add with a slightly higher TP of S$1.18.
Keppel Corporation (KEP SP)
Awilco contract in the bag
• Inked US$425m contract with Awilco for a newbuild mid-water harsh environment semisubmersible drilling rig
• Marking first contract win in 2018
• Positive on contract wins ahead
• Reiterate BUY; TP unchanged at S$10.20
Maiden Dividend Policy Due To Positive Outlook
GSS has adopted a maiden dividend policy of at least 20% of PATMI for FY18F-19F. We think that this is a positive signal and a strong vote of confidence by the management on the positive outlook of the company. We understand that its PE business is robust and may likely enjoy 15-20% growth this year, with orders from existing customers like Phillips and Lego growing YoY. In addition, we expect it to produce and sell oil by 1H18. As a result, we remain upbeat on our outlook for the company, and keep our BUY call and SGD0.25 SOP-based TP (46% upside).
Check out our compilation of Target Prices