Daily Morning Note – 20 July 2018


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SIA Engineering Company Ltd – Surge from JV and associated companies
Recommendation: Accumulate (Maintained), Last Close Price: $3.19
Target Price: $3.56 (previously $3.57), Analyst: Richard Leow
– Revenue and PATMI met 23.1% and 24.4% respectively of our FY19 estimate
– YoY higher PATMI driven by increase in associates/JV, partially offset by lower
– Maintain Accumulate, new target price of $3.56 (previously $3.57)

SATS Ltd – Good turnaround at various levels
Recommendation: Accumulate (Maintained), Last Close Price: $5.10
Target Price: $5.58 (unchanged), Analyst: Richard Leow
– Revenue and PATMI exceeded our expectation by 6.8% and 5.7% respectively
– Revenue and PATMI met 25.7% and 25.3% respectively of our FY19 estimate
– Inflight kitchen JV with Turkish Airlines has been terminated
– Kunshan central kitchen turned profitable ahead of schedule
– MBCCS has turned profitable as well
– Maintain Accumulate; unchanged target price of $5.58

CapitaLand Commercial Trust – Continued recovery in office rents
Recommendation: Accumulate (Maintained), Last Close Price: S$1.75
Target Price: S$1.88, Analyst: Tan Dehong
– 1H18 revenue and DPU at 49% of our FY18e expectations.
– Office rents continue to stage strong recovery, growing 4.1% QoQ in 2Q18.
– Increase in portfolio valuation due to capitalisation and discount rate
– Expect negative rental reversion trend to turnaround in 2019.
– Maintain Accumulate with unchanged TP of S$1.88.


SPH Ltd – Daily timeframe – Bullish
– The bulls finally won the tug of war lately after the bullish breakout above the
2.79 range high on 17/07/18 signals the trend has turned bullish.
– However, with the sharp rise in price since July, the Relative Strength Index
(RSI) has entered into the overbought condition signalling for a possible
correction first before the uptrend resumes.

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The Securities Industry Council (SIC) on Thursday said it has proposed amendments to the Singapore Code on Takeovers and Mergers to clarify the application of the code provisions to companies with a dual-class share structure (DCS) that have a primary listing on the Singapore Exchange.

Comcast Corp dropped its US$66 billion (S$90.4 billion) bid for Twenty-First Century Fox Inc’s entertainment assets on Thursday but said it would still try to expand its international footprint by acquiring 61 per cent of European broadcaster Sky Plc, the remainder of which is owned by Fox.

Olam International on Thursday announced that its wholly-owned subsidiary Olam Americas Inc (OAI) has successfully priced a US$100 million issuance of 5-year fixed-rate notes via a private placement.

Malaysian budget airline AirAsia Thursday announced an additional order of 34 Airbus A330neo planes, bringing the total value of its expanded 100-plane order to US$30 billion as it sets its sights on European routes.

Clearbridge Health on Thursday said its associated company, Clearbridge BioMedics, has completed its fundraising exercise.

No serious bids have been made yet for Hyflux’s sale of Tuaspring, although there are now eight interested parties at various stages of the bidding process, Hyflux chief executive Olivia Lum said on Thursday.

Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

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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