China Aviation Oil (CAO SP)
Remain Positive On Long-Term Growth; BUY
Stay BUY and SGD1.55 TP, 21% upside plus c.4% yield. We remain confident in China Aviation Oil’s long-term growth. This should be aided by the continuing rise in China’s aviation traffic and the group’s diversification into jet fuel supply to non-Chinese markets. While weakness in associate earnings may persist in the near term, jet fuel refuelling volume growth at the Shanghai Pudong International Airport (SPA) could offer a positive surprise. Its ex-cash 6.4x 2020F P/E and below P/BV multiple remain compelling.
StarHub (STH SP)
Gearing For Next Investment Cycle Amid Relatively Stable Operating Landscape
Starhub will remain focused on cost optimisation efforts amid a relatively stable Singapore telco landscape. We note that GIGA has started offering bite-size services to capture market share and we believe the exit of Zero Mobile may lead to abating competition. Separately, Starhub is expected to partner with other MNOs (such as M1) to jointly bid for 5G nationwide spectrum. The stock trades at -2SD of its 5-year mean EV/EBITDA of 8.7x. Maintain HOLD with a DCF-based target price of S$1.45. Entry price: S$1.25.
|CGS CIMB||DBS VICKERS|
4Q19F preview: Better qoq showing
■ We expect better qoq earnings for industrials in the upcoming 4Q19F results season. SIE could beat consensus on continuous margin improvement.
■ SCI to deliver the strongest swing in quarterly profits from urban development and lower losses from SMM. KEP and STE: stronger qoq and yoy.
■ YZJ to deliver steady qoq with more deliveries in 4Q19F, offset by lower HTM income. Maintain Overweight on the sector. Key catalysts: orders and M&As.
Mapletree Logistics Trust
Holding steady amid uncertainties
• Resilient operations driven by steady organic growth across key markets
• Strong retention rate of 97%; occupancy rates inch higher in Singapore
• Debt headroom to undertake acquisitions • Maintain BUY and S$1.90 TP
Check out our compilation of Target Prices