Singapore Stock Pulse

Singapore Stock Pulse

Daily Focus Singapore Stock Pulse Refer to important disclosures at the end of each report DBS Equity Research 9 Mar 2020 Market Cap: US$37,268m | Average Daily Value: US$70.43m Yeo Kee Yan, CMT [email protected] Singapore Research Team Last Traded Price: S$29.99; Price Target: S$33.20 (Upside 10.7%) Research Call Alert Sue Lin LIM / Rui Wen LIM • Trending Sector: Oil & Gas: Yards under pressure as oil price tumbles Strong 1Q18; keep watch on dividends ahead • Trending Sector: Telecom Sector: TPG’s commercial launch soon - free era is over • • 1Q18Stock earnings to Watch: were Frasers in line; Centrepoint topline Trust:driven A largelyperfect frommatch higher NIM; lower trading • DBS Equity Picks: Remove Yangzijiang Shipbuilding from Blue Chips and SIA gains offsetEngineering some revenues from Dividend • Credit costs at new low of 23bps, guidance at 20-25bps possibly towards the lower Ideas of the Day end; still some buffers noted under the Expected Credit Losses line for other assets Actionable ideas by our analysts based on macro, industry or corporate developments • TrendingPositive Sectors outlook ahead, topline growth supported by lower credit costs; dividends shouldOil be & Gassustainable at S$1.00 per year and could head higher Yards under pressure as oil price tumbles • Maintain BUY; TP at S$33.20 (1.5x FY18 BV); higher dividends and lower credit • Oil price tumbled c.10% with Brent at USD45.27per barrel (pbl) after OPEC and its non-OPEC allies including Russia failed to produce any consensus on further production cuts beyond 31 March costs •are E xistingupside production risks cuts expire on 31 March and members are free to produce as they wish beyond this; unconfirmed newswire reports suggest that Saudi could hike its crude production to Read more..DBSabove 10 millionGroup b arrelsResearch. per day Equity (mmbpd ) from the current 9.7mmbpd given its output capacity of 12mmbpd • We have cut our average Brent crude price by around USD10pbl to USD47-52pbl for this year and 30 USD50-55pbl in 2021; short-term uncertainties could see Brent heading down to USD40pbl or even as low as USD30pbl if the Saudi-Russia standoff continues and with Covid-19 uncertainties • Negative for O&G stocks Keppel Corp, SembCorp Marine and SembCorp Industries; some respite DBS Equity(ceteris Research paribus) for airline SIA 5 June 2018 MarketKeppel Cap: Corporation US$37,268m | AverageSembCorp Daily Value: Marine US$70.43m SembCorp Industries BUY HOLD HOLD Last Traded Price: S$6.22 Last Traded Price: S$1.01 Last Traded Price: S$1.77 Last TradedPrice Target Price: (12 S$29.99;-mth): S$7.50 Price Target:Price Target S$33.20 (12-mth): (Upside S$1.40 10.7%) Price Target (12-mth): S$2.20 Upside 20.6% Upside 38.6% Upside 24.3% Sue Lin LIM / Rui Wen LIM Strong 1Q18; keep watch on dividends ahead ed: JS• / sa: PY, CS 1Q18 earnings were in line; topline driven largely from higher NIM; lower trading Daily Focus Singapore Stock Pulse Singapore Airlines BUY Last Traded Price: S$7.96 Price Target (12-mth): S$10.40 Upside 30.7% Telecom Sector TPG’s commercial launch soon - free era is over • TPG’s commercial launch in a few weeks – its free 400k customers may start churning out soon • Our forecast of 6-7% decline in Singapore mobile revenue in 2020 remains intact; the decline may be lower if more TPG customers churn out • StarHub is our most preferred stock for its 6% yield followed by Netlink and Singtel Read more… Starhub NetLink NBN Trust Singtel BUY BUY BUY Last Traded Price: S$1.51 Last Traded Price: S$1.02 Last Traded Price: S$2.95 Price Target (12-mth): S$1.72 Price Target (12-mth): S$1.05 Price Target (12-mth): S$3.52 Upside 13.9% Upside 2.9% Upside 20.5% Page 2 Daily Focus Singapore Stock Pulse Stocks to Watch Frasers Centrepoint Trust Hongkong Land Singtel BUY BUY BUY Last Traded Price: S$2.97; Last Traded Price: US$5.05; Last Traded Price: S$2.95 Price Target (12-mth): S$3.35 Price Target (12-mth): US$5.81 Price Target (12-mth): S$3.52 (Prev US$6.52) (Prev S$2.95) Upside 19.3% Upside 12.8% Upside 15.0% Invests in gaming JV Negatives priced in • Singtel has come together A perfect match • FY19 underlying profit with Thai and South Korean • Unwinding of PGIM ARF grew 4% to US$1.08bn, telcos, AIS and SK Telecom, fund to take hold in 2020; 3% above our forecast due to invest in a Series A round projected DPU accretion of to stronger-than-expected of a regional gaming JV up to 7.1% eventually if rise in development • Singtel is expected to bring FCT gains 100% control earnings from China regional knowledge and • Apart from potentially • Coronavirus outbreak likely assets with SK providing doubling of AUM; FCT will to lead to project delays Korean entertainment and be the eighth-largest S-REIT and lower sales gaming expertise and AIS • COVID-19 disruption is completions in China specialising in e-sports and manageable; portfolio • To minimise occupancy risk digital content should deliver resilient for Central offices by numbers extending lease expiry profile • Raise our TP to S$3.35, • BUY, TP revised to US$5.81 assuming PGIM in our TP valuation Read more… Read more… Page 3 Daily Focus Singapore Stock Pulse DBS Equity Picks Our stock picks aim to help investors build a portfolio of Singapore stocks, based on their risk profiles. Stock picks are based on sectoral, fundamental, and technical analysis Remove Yangzijiang Shipbuilding from Blue Chips and SIA Engineering from Dividend We remove both stocks as the spread of Covid-19 to the developed economies of US and Europe leads to further uncertainties on the global economy, this even as the situation in China has improved drastically. Both stocks triggered our stop loss – SIA Engineering returned -10.9% (CD) that underperformed STI by -2.6%. Yangzijiang returned c.-14%, underperforming STI by c.-6%. Blue Chips CapitaLand Thai Beverage Public Company Yangzijiang Shipbuilding Remove (Holdings) Ltd Entry Date: 2 Jan 2020 Entry Date: 17 Feb 2020 # of shares: 3,500 # of shares: 20,000 Entry Date: 2 Jan 2020 Entry Price: $0.785 Entry Price: $3.75 # of shares: 8,800 Last Traded Price: S$0.780 Entry Price: $1.12 Entry Date: 4 Feb 2020 # of shares: 1,500 Entry Date: 4 Feb 2020 Entry Price: $3.55 # of shares: 4,000 Entry Price: $0.94 Last Traded Price: S$3.540 Last Traded Price: S$0.905 Growth CapitaLand Sunpower Group Ltd Entry Date: 2 Jan 2020 Entry Date: 3 Mar 2020 # of shares: 3,500 # of shares: 20,000 Entry Price: $0.53 Entry Price: $3.75 Last Traded Price: S$0.500 Entry Date: 4 Feb 2020 # of shares: 1,500 Entry Price: $3.55 Last Traded Price: S$3.540 Page 4 Daily Focus Singapore Stock Pulse Dividends CapitaLand Retail China Trust Koufu Group Limited SIA Engineering Remove Entry Date: 3 Mar 2020 Entry Date: 14 Oct 2019 Entry Date: 4 Nov 2019 # of shares: 8,000 # of shares: 12,000 # of shares: 4,500 Entry Price: $1.35 Entry Price: $0.725 Entry Price: $2.65 Last Traded Price: S$1.430 Entry Date: 13 Nov 2019 Last Traded Price: S$2.330 # of shares: 4,800 Entry Price: $0.750 Last Traded Price: S$0.700 StarHub Entry Date: 24 Feb 2020 # of shares: 8,000 Entry Price: $1.52 Last Traded Price: S$1.510 Page 5 Daily Focus Singapore Stock Pulse Covid-19 Update Total Infections - Top 15 GDP vs China New cases – Top 15 GDP vs China 90,000 25,000 16,000 3,000 80,000 14,000 2,500 20,000 70,000 12,000 60,000 2,000 10,000 15,000 50,000 8,000 1,500 40,000 10,000 6,000 30,000 1,000 4,000 20,000 5,000 500 10,000 2,000 0 0 0 0 9-Jan 16-Jan 23-Jan 30-Jan 6-Feb 13-Feb 20-Feb 27-Feb 5-Mar 11-Jan 18-Jan 25-Jan 1-Feb 8-Feb 15-Feb 22-Feb 29-Feb 7-Mar Total cases (China) (LHS) Total cases (Top 15 GDP ex-China) New cases (China) (LHS) New cases (Top 15 GDP ex-China) Top 15 GDP exp-China: USA, Japan, Germany, UK, France, India, Italy, Brazil, Canada, Russia, S. Korea, Australia, Spain, Mexico, Indonesia Total infections - ASEAN New cases - ASEAN 400 50 45 350 40 300 35 250 30 200 25 20 150 15 100 10 50 5 0 0 9-Jan 16-Jan 23-Jan 30-Jan 6-Feb 13-Feb 20-Feb 27-Feb 5-Mar 11-Jan 18-Jan 25-Jan 1-Feb 8-Feb 15-Feb 22-Feb 29-Feb 7-Mar Total cases (ASEAN) New cases (ASEAN) Source: Channel News Asia, DBS Bank Straits Times Index Year End Objective: 3,350 Support Current Resistance level Level 2,960 3,058 2,961 2,800 3,086 Source: DBS Bank, Bloomberg Finance L.P. Page 6 Daily Focus Singapore Stock Pulse Week in Review Week of 02 03 20 STI 2,960.98 (-1.66%; -50.10pts w-o-w) Top News 1. COVID-19 global spread worsens but slows down in China a. Number of countries reporting COVID-19 cases have soared from 65 a week ago to over 100 as of 08 Mar 2020 b.

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