| CIMB | MAYBANK |
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AEM Holdings Ltd Awaiting the next catalyst
■ We deem 1Q18 core net profit, at 18% of our full-year forecast, to be below expectations. ■ AEM maintained its guidance: FY18 revenue will be at least S$255m and PBT will be at least S$42.0m. ■ We now have a better appreciation of its higher staff costs arising from its recent acquisitions and spending to launch new products. ■ AEM will continue to seek meaningful acquisitions given its strong cash balance. ■ We maintain our Add call with a lower TP of S$7.24 on higher staff cost assumptions.
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Venture (VMS SP) Growth Prospects remain Favourable
1Q18 PATMI (+72% YoY) below our est.; TP cut 8% We continue to believe that VMS has multifaceted growth drivers and see the recent correction as an even more attractive opportunity to BUY. VMS delivered very respectable 1Q18 PATMI of SGD83.7m (+72% YoY), but was below our estimate of SGD90m, mainly due to the weaker USD vs the SGD. VMS typically delivers 20% of net profit in the seasonally weaker 1Q but in this case it was 18%. Revenue rose 1.5% YoY, but would have been up 9% on a constant currency basis. We have revised our revenue growth estimates and cut FY18-20E EPS by 7-9% to reflect the results. Our TP is reduced 8% to SGD28.83, now based on 3.4x P/B from 3.7x previously.
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| UOB | PHILLIP |
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CITIC Envirotech (CEL SP) On Track For A Stellar 2018
CEL delivered stellar 1Q18 results with a 144.5% yoy profit surge. China’s formation of its new environmental ministry is a reminder of its staunch anti-pollution stance. CEL is well positioned to capture the huge opportunities available given its Chinese business network and significant technological advantage. We believe CEL’s terrific results will continue for 2018 and is a great way to bank on China without worrying about trade war issues. Maintain BUY and DCF-based target price of S$1.06.
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Cache Logistics Trust Bear with the initial pain of portfolio rebalancing strategy SINGAPORE | REAL ESTATE (REIT) | 1Q18 RESULTS
Gross revenue and DPU were within our expectation Gross revenue and DPU met 24% and 24% respectively, of consensus FY18 estimates Key events after the reporting period are the conversion of CWT Commodity Hub (April 12) and the pending divestment of Hi-Speed Logistics Centre Maintain Accumulate; unchanged target price of $0.91
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| OCBC | RHB |
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Mapletree Greater China Commercial Trust: 4QFY18 results met expectations
Mapletree Greater China Commercial Trust (MGCCT) reported its 4QFY18 results which came in within our expectations. Gross revenue and NPI fell 5.5% and 6.0% YoY to S$89.6m and S$72.9m, respectively. The decline was attributed to the reversal in 4QFY17 of Value Added Tax (VAT) payable for Gateway Plaza (GP) previously assumed at a higher rate and weaker HKD against the SGD, but partially offset by higher rental rates at Festival Walk (FW) and GP. DPU correspondingly dipped 2.8% YoY to 1.904 S cents. For FY18, MGCCT’s gross revenue increased 1.3% to S$355.0m and this made up 98.8% of our forecast. DPU of 7.481 S cents represented a growth of 1.9%, and came in 1.4% higher than our projection. Operationally, MGCCT’s properties remained resilient. Overall portfolio occupancy moved up 1.6 ppt QoQ to 98.5%, as FW and Sandhill Plaza achieved 100% occupancy. Rental reversions were positive across all three assets, coming in at 11% for Festival Walk (both retail and office components), 8% for GP and 15% for Sandhill Plaza (SP). Another positive came from the robust improvements in FW’s tenant sales (+7.4% to HK$5.2b) and footfall (+3.2% to 41.7m) in FY18. Separately, MGCCT announced that it had obtained unitholders approval at an EGM for the acquisition of a portfolio of six freehold offices in Japan. It will also be changing its distribution policy from a semi-annual basis to a quarterly basis starting from 1QFY19’s distributions. We will provide more details after the analyst briefing. Maintain BUY and S$1.39 fair value. |
Suntec REIT Progressing Steadily
Suntec’s operational DPU declined by 5.2% YoY in 1Q18, while overall DPU was flat on the back of higher capital distribution. Amidst challenging local market conditions, management has been actively revamping and repositioning its key asset, Suntec City, which we see as a long term positive. The REIT has also been actively expanding its Australian presence, with the market now accounting for ~13% of NPI (from nil prior to 2013). We expect its near term DPU to remain flat but a pick up is expected by end-2020, with contributions from two development properties kicking in. The stock offers FY18F yield of 5.3%, and trades at a P/BV of 0.9x, which we see as fair. Maintain NEUTRAL call and TP of SGD1.75 (8% downside).
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