IFAST CORPORATION | HOLD (DOWNGRADE)
JUNE 13 CLOSE: $0.955
TARGET PRICE: $1.02
UOB Kay Hian Research, June 13
While we think its fundamentals remain intact, much of the positives have been priced in at this level, including the upcoming stock dealing services.
While stocks will give the group an additional income stream in terms of commission, we understand iFAST's focus on stockbroking services is not to maximise non-recurring commission income from short-term trading.
Instead, its aim is to provide an integrated wealth management platform to enhance the group's overall platform assets under administration in the long term. We expect the new services to take time to ramp up and believe the impact will only be felt more materially in 2018.
At this level, the stock is not cheap, where it is currently trading at 36.9 times 2017 forecast earnings, a 16 per cent premium to the 31.8 times 2017 forecast price-to-earnings ratio of its closest peer, Hargreaves Lansdown, a similar investment platform services company based in the United Kingdom.
Given the limited 4.6 per cent upside to our target price, which is street high, we downgrade the stock to "hold" with an unchanged discounted cash flow-based target price of $1.02. We would be buyers at $0.90.
SINGAPORE CONSUMER | NEUTRAL
OCBC Investment Research, June 13
The recently released Singapore retail sales for April 2017 came in slightly above Bloomberg's consensus survey. The growth was notably driven by discretionary segments like department stores as well as watches and jewellery.
However, food and beverage services decreased and restaurants were still down.
Given that the retail scene has not seen a broad-based improvement, coupled with the growth of e-commerce players, we are "neutral" on the sector and remain selective with "buy" calls for Sheng Siong Group and Thai Beverage.
CDL HOSPITALITY TRUST | HOLD
JUNE 13 CLOSE: $1.605
TARGET PRICE: $1.52
CIMB Research, June 12
Given the company's recent outperformance, we now consider the risk-reward to be skewed towards the downside.
As we forecast total returns of 0 per cent, we maintain "hold" with a higher dividend discount model-based target price. Our base case factors in a 2.5 per cent year-on-year decline in its Singapore revenue per available room in 2017 and a 4.2 per cent year-on-year increase in 2018.
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