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Japfa Ltd (JAP SP) 2H19: More to do with oink, not cluck
Receding ASF impact is the key catalyst to watch for Indonesian soft poultry prices remains a focus area for some investors but the YoY drop from the exceptionally high price environment of 2018 has been tracking our expectations so far. The real wild card for Japfa’s 2H19 performance lies with the near-term unpredictability of ASF on Vietnam hog volumes and prices. Valuations, while attractive, will stay in the back seat for now, but current risk-reward may be interesting for long term investors. Our est.’s and SOTP-based TP are unchanged. BUY.
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Wilmar (WIL SP) Better 2H Awaits; Maintain BUY
Reiterate BUY with unchanged TP of SGD4.50, 17% upside and c.3% dividend yield. Wilmar is our plantation sector Top Pick. We remain upbeat on the stock as we believe the worst is behind us while the outlook for 2H19 looks rosier on the back of an improving soybean crush utilisation and increasing CPO prices. The upcoming China IPO would continue to support the share price in the near term and we expect a further rerating of the share price once the IPO is completed.
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UOB KAYHIAN |
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Mapletree Industrial Trust (MINT SP) High-tech Transformation Powered By Data Centres; Upgrade To BUY
MINT’s strategy to grow its high-tech buildings segment is transformational. It has expanded exposure to high-tech buildings to 43.3% of portfolio valuation, much larger than flatted factories’ at 33.1%. We view acquisitions to further increase exposure to data centres as a positive catalyst. MINT provides growth from data centres at a reasonable price. Its FY20F distribution yield of 5.5% is higher than 5.2% for AREIT and 4.5% for Keppel DC REIT. Upgrade to BUY. Target price: S$2.58.
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