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RHB |
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IREIT Global (IREIT SP) A Strong Vote Of Confidence; Keep BUY
Keep BUY with a new SGD 0.83 TP from SGD0.92, 30% upside and c.9% yield. The recent increase in stake by IREIT Global’s sponsor and strategic investor demonstrates confidence in its assets and long-term growth plans. Despite a sharp increase in COVID-19 cases in Germany, near-term operational risks are minimal: Only 2% of leases are due to expire by 2021 and it has a strong tenant profile. There are also no major refinancing concerns, with the bulk of debt expiring in 2026 only.
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Fu Yu Corp (FUYU SP) Solid Net Cash Manufacturer; Maintain BUY
Maintain BUY with a new DCF-backed TP of SGD0.28 from SGD0.32, 27% upside plus c.7% yield from its net cash position and attractive yield. Fu Yu faced minor disruption with the temporary closure of its Malaysia factories in March due to the MCO, and lower operating capacity from logistics issues. Coupled with the disruption in China, we lower FY20F PATMI by 14%. However, factories globally have resumed operations, and Singapore production remains intact despite the recent circuit breaker.
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PHILLIP SECURITIES |
CGS CIMB |
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Singapore Banking Monthly Relief to tide through challenging times
SINGAPORE | BANKING & FINANCE | UPDATE Despite the rate cut by the Federal Reserve totalling 150 bps in March, local interest rates are showing short-term resilience. NIMs may compress by midteens level for the full year, less than previously expected. February loans growth was stable at 3.05% YoY. Loans will likely sustain at current levels of growth with various government measures to encourage lending amidst liquidity crunch faced by businesses as the COVID-19 pandemic ensues. Derivatives volume rose 34% YoY in March as volatility is at their highest monthly levels since the 2008 Global Financial Crisis. Maintain Singapore Banking Sector at Overweight. Local banks will benefit from the slew of measures introduced by the government to reduce the strain on the financial system through risk-sharing and provision of low-cost funding.
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Centurion Corporation Ltd Contagion risk
■ CENT’s PBWA was hit by a rise in Covid-19 cases. Financial occupancy remains above 90% but higher opex could weigh on its FY20F earnings. ■ Expansion plans put on hold but we are still positive on its long-term outlook. ■ No change to our Add call and S$0.58 TP. We believe the near-term noise has been priced in at the current 7.6x FY21F P/E and 0.5x FY20F P/BV.
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