Compiled by Kenneth Lim
SIA ENGINEERING CO | HOLD
TARGET PRICE: $3.84
JULY 26 CLOSE: $3.71
DBS Group Research, July 26
Q1 FY18 net profits came in below expectations, which has proven to be a dampener on the stock, but the developments announced during the quarter on the engine shop front (new engine joint venture with GE Aviation; servicing of the PW1100G-JM engines) are positive in terms of longer-term positioning, in our view.
In the near term, we see a lack of earnings drivers for SIA Engineering, with line maintenance (as) the only growth area...
While we see limited upside with SIA Engineering trading at about 26 times the FY18 price-earnings ratio despite earnings decline, we do not rule out potential merger and acquisition interests on the stock.
CITIC ENVIROTECH | BUY
TARGET PRICE: $1.10
JULY 26 CLOSE: $0.755
UOB Kay Hian, July 26
Citic Envirotech's (CEL) Q2 FY17 results were largely in line with our expectations although revenue dipped 4 per cent year-on-year due to the timing in revenue recognition.
CEL-guided demand remains healthy and expansion is on track. We expect a fantastic H2 FY17 as revenue recognition from new projects begins amid sustained order-book wins.
CEL is on track to meeting its new-contract wins target of $1 billion for this year.
Maintain "buy" and DCF-based (discounted cash flow-based) target price of $1.10.
MAPLETREE INDUSTRIAL TRUST | HOLD
TARGET PRICE: $1.92
JULY 26 CLOSE: $1.905
OCBC Investment Research, July 26
Mapletree Industrial Trust (MIT) reported its Q1 FY18 results which met our expectations...
MIT's average portfolio passing rental rate continued to exhibit resilience, but occupancy saw a slight dip and rental reversions for renewal leases came in negative for its Business Park Buildings, Hi-Tech Buildings and Stack-Up/Ramp-Up Buildings segments.
We trim our FY18 and FY19 DPU (distribution per unit) forecasts by 0.3 per cent and 2.6 per cent, respectively, as we factor in a recent divestment and softer assumed occupancy for Business Park Buildings in FY19.
This results in a revised fair value estimate of $1.92 (previously $1.93).
Given that MIT's share price has appreciated 14.3 per cent year-to-date and 20.1 per cent since our upgrade on Nov 24 last year, we believe upside potential is now limited.
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