| CGS CIMB | UOB KAYHIAN |
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Property Devt & Invt Keeping a light hand on land supply
■ Supply of land for new residential units in 1H21 government land sale (GLS) programme is marginally higher compared with 2H20, but still moderate. ■ Moderate new land supply and declining pipeline inventory are likely to be supportive of home prices in the longer term, in our view. ■ Reiterate sector Overweight. Our preferred picks are CAPL, CIT and UOL.
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Singapore Airlines (SIA SP) SIA Is More Expensive Now Than It Was Two Years Ago
While the recent debt issuance would stave off operational risks, shareholder returns are likely to be severely crimped from higher interest payments as well as low ROIC. This is especially if much of SIA’s S$10b MTN goes towards funding capex. We have also compared SIA’s enterprise value to pre-COVID-19 FY20 EBITDA, which at 10.5x, is more than 2SD to the 5-year mean. We have made similar comparisons on a trailing book value and have reached the same conclusion. SIA is overvalued. Downgrade to SELL. Target price: S$3.80.
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DBS VICKERS |
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Yangzijiang Shipbuilding Overhang removed, value emerging
Investment Thesis: Recent underperformance due to MSCI rebalancing offers a golden opportunity - trading at below cash of S$1.15/share and unjustifiably low 0.5x price/book value (P/BV) (2SD [standard deviation] below mean) despite superior financials of 8% return on equity (ROE) and sustainable dividend per share (DPS) of >4 Scts (~4.4% dividend yield).
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Check out our compilation of Target Prices
