| MAYBANK KIM ENG | CIMB |
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Singapore Medical Group (SMG SP) Asset-light contender Taking off after a healthy turnaround; Initiate BUY Initiate SMG at BUY with TP of SGD0.59 TP. This under-researched stock focuses on premium specialist healthcare services and is set to undergo high growth from robust expansion of its seven key specialities. It offers: 1) a scalable asset-light model; 2) attractive market positioning; and 3) good turnaround track record and high-profile shareholders. Its renewed growth profile stems from its earnings turnaround in 1H16, as a result of efforts from the new CEO and Tony Tan (founder of Parkway Holdings, a multi-billion dollar healthcare group today), who took over the ailing company in 2013. Despite M&A being a key part of the company’s growth strategy, we forecast nothing in addition to those already completed; One further M&A deal could lift our FY17E EPS & TP by at least 7%.
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Frasers Centrepoint Trust 1QFY17: Strong showing from Causeway Point ■ 1QFY9/17 DPU of 2.89 Scts (+0.7% yoy) was in line with consensus and our expectations, forming 24.7% of our full-year forecast. ■ Portfolio occupancy improved 1.9% pts qoq to 91.3%. FCT renewed 12.4% of the portfolio’s NLA in the quarter and achieved +6.9% rental reversion. ■ Shopper traffic up 2.7% yoy to 27.1m. ■ AEI at NP to peak in 2QFY17; to be completed by end-Sep 17. ■ Maintain Add with unchanged DDM-target price on continued strong performance and acquisition upside.
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| PHILLIP SECURITIES | |
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Sabana Shari'ah Compliant REIT Rumblings of Unitholder activism Event-driven trading idea The price of Sabana Shari'ah Compliant REIT (SSREIT) had declined by $0.335 or 47% to $0.380 for the year ended December 30, 2016; and returned only 5.26 cents in distributions (for 4QFY15 to 3QFY16) during the year. The recent dilutive 42-for-100 Rights Issue with Issue Price of $0.258 to fund acquisitions that are non-accretive on a pro forma basis, appears to be the last straw for Unitholders and they are doing something about it.
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| RHB SECURITIES | UOB KAYHIAN |
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CapitaLand Mall Trust Now NEUTRAL On Expected Rental Growth Slowdown We downgrade CMT to NEUTRAL as we expect the challenging retail climate to impact its rental growth. Amid tough market conditions, the REIT has embarked on an effort to transform Funan DigitaLife Mall into an integrated mall of the future – which we view as a long-term positive. At its current share price levels, CMT offers forward yields of 5.6% and is trading at 1.1x FY17F P/BV, which we deem to be fair. Downgrade to NEUTRAL, with a lower TP of SGD2.07 (from SGD2.36, 4% upside).
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