Excerpts from RHB Research report

Opportunistic SMID cap ideas.
Although small and mid-cap (SMID cap) stocks in Singapore have underperformed large cap stocks, we believe selective opportunities exist for investing into SMID cap companies that offer either strong visibility on earnings growth, sustainable high dividends, and/or are trading at compelling valuations.

drbengteckleng3.18Dr Beng Teck Liang, CEO of Singapore Medical Group. NextInsight photo.In the SMID cap space, our preferred picks are Silverlake Axis (SILV SP, BUY, TP: SGD0.65), HRnetgroup (HRNET SP, BUY, TP: SGD1.18), Fu Yu (FUYU SP, BUY, TP: SGD0.23) and Singapore Medical Group (SMG SP, BUY, TP: SGD0.56).

We like Silverlake for its strong earnings growth as it draws down on its existing orderbook; HRnetgroup, for its ability to offer earnings upside from earnings-accretive acquisitions; Fu Yu for its attractive +8% dividend yield; and Singapore Medical Group for its lowest valuation amongst healthcare players in Singapore.

M Cap
(US$m)

TP
($)

Upside
(%)

1FY
year

P/E (x)

P/BV (x)

Yield (%)

ROE (%)

1FY

2FY

1FY

2FY

1FY

2FY

1FY

2FY

CDL Hospitality

1,292   

1.80

23.3

2018

11.6

10.9

0.9

0.9

6.3

6.7

8.1

8.4

Delfi

592

1.59

20.5

2018

24.2

23.1

2.7

2.6

2.1

2.6

10.1

11.3

Fu Yu

105

0.23

21.1

2018

13.3

12.4

0.9

0.9

8.4

8.4

6.5

7.1

HRnet

591

1.18

47.5

2018

14.8

14.1

2.3

2.1

3.2

3.3

16.0

15.4

Manulife US REIT

984

0.92

19.5

2018

11.8

10.7

0.9

0.9

7.2

7.6

7.9

8.6

Starhill Global

1,089   

0.80

17.6    

2019

10.2

9.5

0.7

0.7

7.1

7.4

7.1

7.5

Silverlake Axis

807

0.65

56.6    

2019

15.5

14.3

6.2

6.0

4.8

4.8

37.2

36.1

Singapore Medical Group

139

0.56

40.0

2018

15.4

14.2

1.4

1.3

-

1.4

8.9

9.0

Sheng Siong

1,170

1.27

19.8

2018

22.7

19.4

5.6

5.0

2.8

3.8

24.3

26.6

Note: Prices are as at 31 Dec 2018
Source: Bloomberg, RHB


Full report here. 


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