| CGS CIMB |
OCBC |
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Banks O&G trouble could be one-off
■ We think that further widespread deterioration of the O&G sector following Coastal Oil’s liquidation is unlikely. ■ In the worst case scenario of incurring full provisions, credit costs could rise by 1-6bp. We believe the NPL implication is not material at 1-6bp. ■ Stay sector Overweight. OCBC is our top pick for continued NIM upside and attractive valuation of 1.1x CY19 P/BV - below long-term mean of 1.4x.
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| RHB | UOB KAYHIAN |
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Wilmar International (WIL SP) Upside From Potential China IPO
Maintain BUY and SGD3.58 TP, 13% upside, with 3% FY19F yield. Wilmar is our Top Pick for exposure to the plantation sector. Given an unexciting year ahead for CPO prices, we believe Wilmar will outperform the sector as its exposure to the downstream space could help to mitigate the lower earnings in the plantation segment. In addition, the potential A-share listing of its China operations could unlock some latent value in the stock through special dividends and a share price rerating.
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Sunpower Group (SPWG SP) Addressing Concerns Of Unauthorised Share Transfers
Sunpower’s 32% share price correction since its substantial shareholders fell prey to unauthorised share transfers on 17 Oct 18 appears to be overdone. Total exposure is limited to only 3.8% of issued shares; downside is limited as legal actions have been taken against their borrower and Sunpower has started buying back shares in 2019. Core business remains robust and current valuation is attractive at 5.8x 2018F PE. Maintain BUY and SOTP-based target price of S$0.76.
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Check out our compilation of Target Prices
