Get a free Gift Box worth $50 delivered to your doorstep when you subscribe*
Weekly print edition delivered to your mailbox
Gift Box includes the following: Masks by SG Enable Silicone Straw by Lexngo Homemade Ginger Bread by The Cicheti Group Premium Hand Sanitiser Mask Neck holder
*Gift Box promotion only valid for new subscribers and renewals less than 90 days to expiry, for Singapore addresses only
The Edge Digital 1 Year
S$ 0.00/Year
S$ 99.90/Year
Digital
Get a free Gift Box worth $50 delivered to your doorstep when you subscribe*
Unlimited access to online articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Gift Box includes the following: Masks by SG Enable Silicone Straw by Lexngo Homemade Ginger Bread by The Cicheti Group Premium Hand Sanitiser Mask Neck holder
*Gift Box promotion only valid for new subscribers and renewals less than 90 days to expiry, for Singapore addresses only.
The Edge Print and Digital 1 Year
S$ 0.00/Year
S$ 169.00/Year
Digital And Print
Get a free Gift Box worth $50 delivered to your doorstep when you subscribe*
Weekly print edition delivered to your mailbox
Unlimited access to online articles
Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Gift Box includes the following: Masks by SG Enable Silicone Straw by Lexngo Homemade Ginger Bread by The Cicheti Group Premium Hand Sanitiser Mask Neck holder
*Gift Box promotion only valid for new subscribers and renewals less than 90 days to expiry, for Singapore addresses only.
Step 1 of 4: Enter Personal Info
Personal Details
Error:
Enter a valid email address
Error:
Password doesn't match
You have an existing account, please log in instead
UOB KH's top picks are First Resources, Sunpower, Food Empire
Jeffrey TanPublished on Thu, Jan 14, 2021 / 11:24 AM GMT+8 / Updated 12 days ago
A-
A
A+
Finding attractive stock picks in a volatile market can be difficult as the world continues to grapple with the Covid-19 pandemic.
But for UOB Kay Hian Research (UOB KH), some of its top picks are palm oil producer First Resources, power generation company Sunpower Group and food manufacturer Food Empire Holdings.
According to the brokerage, the dry weather in 2019 and the recent high rainfall have had less of an impact on First Resources’ assets.
This is because most of the company’s estates are in the Riau region, it says.
“Hence, we expect better fresh fruit bunch (FFB) production growth for [First Resources at 6% y-o-y in 2021,” UOB KH writes in a Jan 8 note.
The brokerage notes that Sunpower is an attractive opportunity given the company’s recent announcement of the sale of its manufacturing & services business at an attractive 12 times 2019 earnings.
This is twice the five-to-seven times earnings ascribed by the street and represents 50% of its market cap, it says.
UOB KH adds that investors stand to benefit from a dividend payout arising from the divestment.
Post-sale, Sunpower intends to pay out a special dividend of 23.59 cents a share, split into two tranches, translating into an attractive dividend yield of 29%.
Meanwhile, UOB KH says Food Empire is trading at a compelling 9.8 times 2021 earnings forecast.
The brokerage points out that the company’s recent share buybacks underline the management’s confidence in its business outlook and signals potentially strong 4QFY2020 results.
UOB KH has recommended “buy” for First Resources, Sunpower and Food Empire, with target prices of $1.85, $1.10 and 88 cents, respectively.
As at 11.19 am, First Resources was down 3 cents or 1.8% at $1.66 with 1.02 million shares changed hands.
Sunpower was up 0.5 cent or 0.5% at 98 cents with 1.1 million shares traded.
Food Empire was down 1 cent or 1.3% at 74 cents with 173,900 shares changed hands.
Unlimited access to all stories from $99.9/year*
The latest reporting and analysis from business and investments to news and views on social issues.