Compiled by Andrea Soh, The Business Times
THAI BEVERAGE | BUY
TARGET PRICE: S$1.01
FEB 2 PRICE: S$0.855
OCBC Investment Research, Feb 3
Thai Beverage announced the appointment of a senior vice-president, Nongnuch Buranasetkul, to oversee the group's food segment, and an executive vice-president, Michael Chye, for the group's brand investment management.
In a Sept 16 announcement, Thai Bev announced a new organisational structure, as well as a new Brand Investment Management Group to ensure the long-term success of their brand portfolio across three core product groups - spirits, beer and non-alcoholic beverages. As the group works towards their Vision 2020 goals, which include a diversified revenue base, we continue to like their long-term growth story.
NOBLE GROUP | OVERWEIGHT
TARGET PRICE: S$0.255
FEB 2 PRICE: S$0.172
NRA Capital, Feb 2
Noble announced on Dec 1 the completion of the disposal of Noble Americas Energy Solutions for US$1.16 billion. As per its October announcement, the illustrative disposal gain was about US$386 million. The gain from the sale will likely push Noble to report positive full year profits later this month, not to mention another estimated US$15 million of gains from the disposal of certain UK power companies on Dec 6.
We reckon that improved liquidity will alleviate conditions and lead to improved profitability. Significant parts of the repositioning of Noble have been completed by end-2016.
The sale of non-core assets and cost reduction, eg: Flattening of organisation structure and rationalising of headcount, are ongoing. Therefore, key risks include restructuring costs sustaining into 2017, which will drag on profitability.
Based on USD/SGD of 1.4, Noble is trading at 6.7 times 2018 earnings. Based on a subjective multiple of 10 times, we are looking at a potential valuation of S$0.255. Hence, our view is that Noble may have bottomed, provided commodity prices remain robust.
STARHILL GLOBAL REIT | HOLD
TARGET PRICE: S$0.72
FEB 2 PRICE: S$0.745
CIMB Research, Feb 1
1HFY17 DPU of 2.56 Singapore cents (-2.7 per cent y-o-y) was in line with our expectation, at 49 per cent of our full-year forecast. Q2FY17 DPU of 1.26 Singapore cents (-4.5 per cent y-o-y) made up 24 per cent.
Portfolio occupancy ticked up 0.3 percentage points q-o-q to 95.4 per cent. Shopper traffic at Wisma rose 2.1 per cent y-o-y, but tenant sales slipped 2 per cent y-o-y. Singapore office was affected by lower occupancies and passing rents.
Ongoing redevelopment at Plaza Arcade and tenant transition for Renhe Spring Zongbei property will impact FY17 distribution. We reduce our FY17-19 DPU by 2.9-5.9 per cent.
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