Compiled by Cai Haoxiang
SEMBCORP MARINE | ADD
JULY 11 CLOSE: $1.655
TARGET PRICE: $1.88
CIMB Research, July 10
In its recent UK/Europe non-deal roadshow with us, SembMarine reiterated its $2 billion to $3 billion order target for this year, comprising Gravifloat gas terminals and offshore platform/conversion work.
Questions by investors were: strategic review by Sembcorp Industries, order outlook and cost competitiveness of SembMarine versus Koreans.
We believe SembMarine is unlikely to be taken private or divested by Sembcorp Industries in the near term given both their stretched balance sheets.
Maintain "add" and target price of $1.88, still based on 1.5 times this year's forecast book value.
Potential key catalysts are order wins, sale of completed jack-up rigs and re-inclusion in the Straits Times Index.
SINGAPORE PROPERTY | POSITIVE
Maybank Kim Eng Research, July 10
Market sentiment has improved significantly year to date, helped by strong system liquidity and robust, record bids in recent government land tenders.
These themes, together with the abating supply across the various sub-sectors and supported by new economy demand drivers, continue to reinforce the investment theses for the developers and Singapore real estate investment trusts (Reits).
Our large-cap "buys" remain City Developments, UOL, CapitaLand Commercial Trust, Keppel Reit, Ascendas Reit, and Mapletree Industrial Trust.
Strong capital flows and their implications to Singapore's property market are a recurring theme.
Developers lament the aggressive land bids by foreign developers that have priced out local players.
This leaves a large amount of capital on the sidelines waiting to be deployed into the next land parcel.
MAPLETREE LOGISTICS TRUST | HOLD
JULY 11 CLOSE: $1.185
TARGET PRICE: $1.15
OCBC Investment Research, July 11
Mapletree Logistics Trust (MLT) recently announced the proposed divestment of two of its freehold properties in Japan at attractive prices.
The divestment gains will be distributed to MLT's unitholders.
We factor in MLT's Japan divestments in our model and also lower our cost of equity assumption from 8.2 per cent to 8 per cent, which results in a slightly higher fair value estimate of $1.15 (previously $1.14).
Nevertheless, we are maintaining our "hold" rating on MLT as we believe its solid execution capabilities as highlighted earlier and positives have already been priced in by the market.
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