ANALYSTS SAY: Buy, Sell, Hold (26 Oct '17)

Yongnam Holdings

Strutting turnaround

■ We initiate Yongnam with an Add and TP of S$0.53, based on 0.8x FY18 P/BV (10% discount to long-term average). Contract wins are the key catalysts for the stock.

■ Using existing capacity, Yongnam aims to tender for S$1.16bn worth of projects for 2017-18 award. This includes c.S$500m of struts projects for North-South Corridor.

■ As a steel provider for Singapore’s iconic projects, Yongnam sits on 208k tonnes of struts and steel plate assets worth S$242m (S$0.46/share) at end-FY16.

■ Yongnam is trading at 5x FY19 P/E and 0.5x FY18 P/BV, below its long-term average of 6x forward P/E and 0.9x P/BV.

■ Based on the projects in tender and a 50% hit rate, losses in FY17 could be reversed in FY18F to a net profit of S$10m. Earnings were c. SS$47m p.a in FY08-12.

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First Resources (FR SP)

3Q17 Results Preview: Expect Stronger qoq And yoy Performance

FR reported better qoq and yoy FFB nucleus production in 3Q17 on the back of a yield recovery and supported by new mature areas. We forecast core net profit of US$33m-37m for 3Q17. We expect better qoq earnings on the back of higher production and higher contribution from biodiesel sales, while yoy earnings could come in flat or marginally higher as the higher yoy production yoy would be partly offset by lower CPO ASP. Maintain HOLD. Target price: S$1.95. Entry price: S$1.75.

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Frasers Centrepoint Trust: Projecting another record DPU in FY18

Frasers Centrepoint Trust’s (FCT) FY17 DPU of 11.90 S cents (+1.2%) was another record high for the trust and its eleventh consecutive year of growth since its listing. Operationally, FCT’s portfolio occupancy jumped 4.9 ppt QoQ to 92.0%. Rental reversions were also robust, coming in at 8.3% for 4QFY17, and 5.1% for the full-year. There was, however, still some softness in overall portfolio shopper traffic and tenant sales. For its portfolio revaluation exercise, cap rates were compressed by 25-60 bps, resulting in higher valuation for all its assets with the exception of Bedok Point. We expect FCT to deliver another record DPU for its unitholders in FY18, with stable growth of 2.3% to 12.2 S cents. On account of FCT’s continued solid track record, re-rating momentum in the S-REITs sector, improved consumer sentiment and strong balance sheet, we apply a lower discount rate of 6.7% (previously 6.9%) in our DDM valuations. Rolling forward our estimates, our fair value is raised from S$2.28 to S$2.40. Maintain BUY.

Sing Investments & Finance Limited

A Stellar Performance

SINGAPORE | BANKING | 3Q17 RESULTS

 3Q17 PATMI of S$5.164mn exceeded our estimate by 28.6%.

 The surprise came from a sharp increase in interest income and hiring charges after two quarters of decline. We raised our earnings forecast by 10%.

 Allowances for bad loans declined 45.6% YoY.

 Maintain “Accumulate” with a higher target price of S$1.725 (previous TP S$1.67) based on 0.8x FY18e P/BV as we roll over to FY18e valuations.

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