Brokers' take

Compiled by Claire Huang, The Business Times

SINGAPORE REITS | OVERWEIGHT

UOB Kay Hian, Oct 30

Results of CDL Hospitality Trust were below expectations, while those of Suntec and Frasers Hospitality Trust (FHT) were in line.

Maintain "hold" on CD Hospitality with a raised target of $1.70 (from $1.62). Maintain "hold" on Suntec with a higher target price of $2.05 (from $1.95). Maintain "buy" on FHT with a higher target price of $0.85 (from $0.80).

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SHENG SIONG GROUP | BUY

TARGET PRICE: $1.04

OCT 30 CLOSE: $0.94

OCBC Investment Research, Oct 30

Sheng Siong Group's (SSG) 9M-2017 results came in within expectations, as revenue grew 5 per cent year on year to $629.6 million and core profit after tax and minority interests was up 7.3 per cent to $50.8m, while the group noted improved consumer sentiment.

The 41,500 square foot (sq ft) Woodlands store is slated to close in November, while the new 4,000 sq ft store at Bukit Panjang opened in August, with another three new stores slated to open in Q4-2017.

Looking ahead, SSG continues to be on the lookout for suitable retail space to open new stores. In addition, we expect margins to remain stable given various drivers and a strong management team.

The fitting out of a new store in Kunming, China, is now completed and subject to regulatory approvals with operations targeted to commence before end-FY17.

That said, we expect the ramp up of the Kunming store to take time and the performance of this store will likely shape SSG's expansion plans in China in the future.

On in-line 9M-2017 results, we are keeping our forecasts unchanged.

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VIVA INDUSTRIAL TRUST | BUY

TARGET PRICE: $1.02

OCT 30 CLOSE: $0.97

RHB, Oct 30

Viva's Q3-17 results came within our expectations. The occupancy rate for Viva Business Park's (VBP) white space continues to improve, with spill-over effects starting to be seen in VBP's business park.

UE Biz Hub East is also poised to benefit from the recent opening of Downtown Line 3.

Positive rental reversions are set to continue, with improving fundamentals in the industrial market. Despite the challenging conditions, Viva continues to impress via well-planned asset enhancements and yield-accretive acquisitions.

Maintain "buy", with a higher target price of $1.02 (from $0.97, 7 per cent upside).

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