|MAYBANK KIM ENG||
Choose Discretion Over Valor
Consolidation an option for market repair but...
During a recent interview, telco and media regulator IMDA indicated its openness to industry consolidation. This possibility for industry repair will likely not come soon but is at least an option. Along with potential changes to telco and media regulations, we remain cautious on the sector, despite significant share-price corrections. Remain NEUTRAL. StarHub provides the best value while Netlink NBN Trust offers insulation from wireless uncertainties, in our view.
CapitaLand Commercial Trust (CCT SP)
Risk-Reward Profile Finely Balanced
Maintain NEUTRAL, TP of SGD1.86 reflects 4% downside. CapitaLand Commercial Trust’s 1Q19 results are in line, at 24% of our full-year forecast. Key catalysts are the announcement of redevelopment plans for 21CQ, yield-accretive acquisition of the remaining stake in CapitaSpring and overseas assets. Despite its positive outlook, its valuation of 1.1x P/BV and FY19F yield of ~5% are not compelling enough, in our view. We recommend investors to buy the stock on dips.
|CGS CIMB||PHILLIP SECURITIES|
■ We are excited that Keppel plans to hire 1,800 full-time staff over the course of 2019 in anticipation of the recovery of the O&M business.
■ With this, we think investors could look past the slight miss in 1Q19 net profit of S$203m vs. our S$230m and consensus of c.S$250m.
■ Maintain Add and target price of S$8.41 on SOP valuations. Stronger-thanexpected order wins in O&M and resolution of Sete Brasil rigs are catalysts.
United Overseas Bank Limited
Rising Funding Pressure to Soften NIM
SINGAPORE | BANKING | UPDATE
Trailing down of SIBOR in the next quarter to be offset by rising mortgage rate and lesser competition of funds.
Loans demand underpinned by property funds in areas such as commercial properties and data centres.
Fee income to benefit from wholesale loan product and services fees (i.e. restructuring).
Capital market turnaround to aid fee income and wealth management business.
Maintain BUY with a lower target price of S$32.00 (previous TP S$32.50) based on Gordon Growth Model. The decrease in target price was due to our lower NIM assumption of 1.82% (previously 1.84%).
Check out our compilation of Target Prices