Daily Morning Note – 03 May 2018

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RESEARCH REPORT

CapitaLand Ltd – Stability from recurring income
Recommendation: Accumulate (Maintained), Last Close Price: S$3.76
Target Price: S$4.19, Analyst: Tan Dehong
– Revenue and net profit in line with our forecasts.
– Same-mall YoY tenant sales growth stable at 6.2% for China, CAPL’s biggest
market.
– 1Q18 China residential sales sold had halved YoY due to less units available for
sale. Only 4% of all units launched remain unsold.
– Serviced Residences RevPAU grew 5% YoY, continuing the momentum from 4Q17.
– Maintain Accumulate with unchanged RNAV-derived target price of S$4.19.


BREAKING NEWS

U.S. stocks finished the day lower. Both the Dow Jones industrial average and the S&P 500 declined 0.72% to end at 23,924.98, and 2,635.67, respectively. The Nasdaq composite finished the session 0.42% lower at 7,100.90.

The Federal Reserve kept interest rates unchanged and noted that inflation was starting to creep higher. The dollar index dipped in reaction to the Fed statement, but later pared losses.

Eurozone economic growth expanded by 0.4% QoQ and 2.5% YoY in 1Q18; Meanwhile, unemployment remained stable in March at 8.5%.

JPMorgan Global Manufacturing PMI rose to 53.5 in April from March’s six-month low of 53.3. Gauges of production and new orders both rose, though export growth slowed.

China manufacturing Caixin / IHS MarkitThe PMI, came in at 51.1 for April, versus an expected 50.9. In March, it was 51.0.

Singapore PMI was marginally down to 52.9 in April, from 53 in March, due to a slower growth in new orders and new exports, and a slightly slower factory output. This is its 20th straight month of expansion, though the rate of growth has steadied over the last six months.

Amazon has made a formal offer to acquire 60% of Flipkart, placing the bid on a par with an offer from Walmart.

Spotify reported narrower losses in the first quarter, but kept its full-year guidance steady. Spotify lost 41mn euros in 1Q18 vs 139mn euros in 1Q17. It expects to lose 230-330mn euros for the year.

Tesla reported narrower than expected losses, and said it was making progress ramping up production of Model 3 electric cars. Tesla reported net losses of US$784.6mn in 1Q18, which translates to an adjusted loss per share of US$3.35, against expectations of US$3.42.

Oxley Holdings has entered into a placement agreement with Aspen (Group) Holdings that will see Oxley hold about 10% of the enlarged share base of the Malaysian-based property group.

United Overseas Bank signed 4 Memoranda of Understanding with co-working space providers EV Hive (Indonesia), Common Ground (Malaysia), WORQ (Malaysia) and 80RR Fintech Hub SG (Singapore).

SHS Holdings has secured two modular construction contracts amounting to NZ$30mn for the construction of a serviced apartment project and a hotel on New Zealand’s South Island.

Cityneon Holdings has secured an exclusive worldwide licence to the rights for the exhibition “The Hunger Games: The Exhibition”.

Keppel Offshore and Marine has been served with an amended complaint in the lawsuit launched against the firm by EIG Management Company LLC.

Source: Bloomberg, Channel NewsAsia, The Business Times, SGX Masnet, Reuters, PSR

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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