broker's report

Bumitama poised to ride CPO recovery despite 3Q earnings miss, analysts say

SINGAPORE (Nov 13): Analysts are optimistic on Bumitama Agri, even as the Indonesian oil palm plantation operator missed consensus earnings estimates in 3Q19 ended September.

Bumitama saw its 3Q19 earnings plunge 29.7% to 189.61 billion Indonesian rupiah ($18.3 million), despite revenue edging slightly higher by 1.4% y-o-y to IDR 1.94 trillion.

The earnings decline was mainly attributable to low crude palm oil (CPO) average selling price (ASP), low palm kernel (PK) ASP, and weaker-than-expected fresh fruit bunches (FFB) output growth.

ST Engineering gets 4 'buys' as aerospace, order book continue to soar

SINGAPORE (Nov 12): Analysts are buoyant on ST Engineering, as the technology, defence and engineering conglomerate posted 3Q19 earnings in line with expectations on the back of record-high revenue.

For 3Q19 ended September, STE saw its revenue jump 27% to $2.07 billion – the highest year-on-year growth in over a decade.

The revenue surge was driven by Aerospace revenue, which soared 53% y-o-y to $1.1 billion on the consolidation of its recently acquired Middle River Aircraft Systems (MRAS), as well as revenue recognised from various end-of-programme reviews.

Maybank KE downgrades Venture to 'hold'; recommends lower entry point

SINGAPORE (Nov 12): Maybank Kim Eng Research is downgrading its call on Venture Corporation to “hold” from “buy” previously to reflect to more challenging times. The research house has also cut its target price on Venture to $16.91 from $18.85 previously.

Investors are also recommended to take profit and await a materially lower entry point, assuming fundamentals do not deteriorate further.

Singapore Air flying low on mixed performance, but analysts still positive

SINGAPORE (Nov 11): Although Singapore Airlines (SIA) reported mixed performances across the group in 2Q20, analysts are still remaining positive on the stock.

In its latest 2Q20 results, SIA’s earnings came in at $94.5 million, 70% higher y-o-y, mainly due to higher contributions from associates and joint ventures of $78 million only to be offset by higher finance charges of $28 million.

Revenue increased by 5.3% y-o-y to $768.5 million, mainly driven by growth in passenger-flown revenue, although the topline was dragged down by cargo-flown revenue.

Analysts favour super-sized CapitaLand as 3Q operating PATMI jumps 18.8%

SINGAPORE (Nov 6): Analysts are keeping their “buy” calls on property giant CapitaLand, on the back of bullish sentiments following its recent merger with Ascendas-Singbridge (ASB) and robust capital recycling efforts.

“CapitaLand’s competitive advantage is its significant asset base and extensive market network, which has been further boosted following the completion of the Ascendas-Singbridge merger,” says OCBC Investment Research in a Nov 6 report.

The brokerage is maintaining its “buy” recommendation, and raising its fair value estimate by 9.4% to $4.42.

Analysts turn bullish on StarHub as potential catalysts could ease earnings pressures

SINGAPORE (Nov 6): Analysts from two research houses – DBS Group Research and CGS-CIMB Research – are upgrading StarHub to “buy”, from “hold” previously, following the telco’s 3Q results announcement.

The optimism comes on the back of views that StarHub’s earnings pressures have already been priced in, while its enterprise and wireless segments could provide potential catalysts for the counter.

Year to date, shares in StarHub had slid nearly 24% to close at $1.32 on Nov 5, before the release of its results.

Analysts stay lukewarm on OCBC amid limited catalysts on near-term horizon

SINGAPORE (Nov 6): Analysts are maintaining their cautious stances on Oversea-Chinese Banking Corp (OCBC), despite the bank reporting a set of 3Q results that were in line with consensus estimates.

OCBC saw its earnings fall 6% y-o-y to $1.17 billion for the 3Q19 ended September, on the back of a one-time charge of $91 million due to a refinement in the group’s expected credit loss (ECL) modelling approach for its Indonesian banking subsidiary, Bank OCBC NISP.

Excluding this, the group’s core net profit was $1.26 billion, 1% y-oy higher than a year ago.

Far East Hospitality Trust poised to ride sector recovery, analysts say

SINGAPORE (Nov 5): Analysts are bullish on Far East Hospitality Trust (FEHT) amid a recovery in the Singapore hospitality sector.

With a portfolio of 13 properties, FEHT bills itself as the “first and only Singapore-focused hotel and serviced residence hospitality trust listed on the Singapore Exchange”. And market watchers see the REIT as a pure-play into the recovery.

CDL Hospitality Trusts remains top pick despite 3Q DPS dip

SINGAPORE (Nov 4): Analysts from Maybank Kim Eng Research and RHB Group Research are keeping their “buy” recommendations on CDL Hospitality Trusts, despite the REIT stumbling in its recent 3Q19 results.

CDLHT reported distribution per stapled security (DPS) of 2.09 cents for the 3Q19 ended September, some 4.1% lower than DPS of 2.18 cents recorded in 3Q18.

After deducting income retained for working capital, total distribution to stapled securityholders was $25.4 million, down 3.6% from the previous year.

Ascendas REIT gets a lift as it eyes maiden entry into US market

SINGAPORE (Nov 4): OCBC Investment Research is keeping it’s “hold” call but raising its fair value estimate for Ascendas Real Estate Investment Trust by over 9% to $3.25 on the back of strong long-term prospects from an enlarged scale.

Already the largest listed industrial REIT on the Singapore Exchange based on asset size and market capitalisation, Ascendas REIT on Nov 1 announced the proposed acquisition of a portfolio of 30 business park properties from CapitaLand for $1.66 billion.

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