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CGS CIMB |
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Netlink Trust (NETLINK SP) Solid 1HFY19. More to come.
Core business in line. Maintain Buy NetLink’s 1HFY19 (end-Mar) results slightly beat MKE and consensus estimates thanks to unusually strong diversion revenue in the quarter. We maintain our forecasts and DDM based TP (COE of 6%, LTG 0%) of SGD0.93. Even without factoring for potential upside from possible accelerated work from StarHub’s (STH SP, SGD1.98, BUY, TP SGD2.21) cable network decommissioning and possible network sharing initiatives among the telcos, NetLink is already offering healthy upside and a sustainable yield. Any challenge to its current level of regulated returns is the main risk to our outlook.
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Venture Corporation In business for the long term
■ 3Q18/9M18 earnings disappointed at 21%/68% of our and consensus’s fullyear expectations due to product transition issues faced by customers. ■ Venture expects a qoq recovery in 4Q18 as customers’ products are launched and new customers contribute to revenue. ■ We upgrade Venture from Hold to Add as we roll over to FY20F. Our S$17.44 TP is based on 12.3x (0.5 s.d. below the 11-year average of 15.3x) multiple.
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| RHB SECURITIES | RHB SECURITIES |
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DBS
Future Earnings Still On Growth Momentum Maintain BUY, new TP of SGD29.80 from SGD30.30, 21% upside and 5% FY19F yield. At DBS’ results teleconference, management reiterated its bullish stance for 2019 – guiding for further NIM widening from FFR hikes, stable loan growth of mid-single digits and wealth management growth potential. We derive our TP on assuming long-term ROE of 13.8%, which could be achievable based on management’s guidance of ~13 2019F ROE. Widening NIM is the catalyst to drive DBS’ share price higher. UOB remains our Top Pick for Singapore bank stocks.
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Manulife US REIT
Another Solid Quarter; BUY Maintain BUY, TP still at USD0.92, 20% upside with 8.1% FY19F yield. MUST delivered another solid set of quarterly numbers, backed by contributions from acquired assets and organic growth. Portfolio occupancy rate improved in four of its properties, with double-digit rental reversions recorded in 3Q. Outlook of the US office market remains rosy, on strong jobs creation and limited micro-market supply. While there has been some concerns on potential tax reforms impacting its tax-efficient structure, we believe the probability of any drastic changes is low. MUST is one of our top sector picks.
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