Compiled by Kenneth Lim, The Business Times
MANULIFE US REIT | BUY
FEB 14 CLOSE: US$0.86
TARGET PRICE: US$0.96
RHB Research, Feb 14
Manulife US Reit reported a strong set of maiden FY16 results with distribution per unit exceeding its initial public offering forecasts by 5 per cent.
Among S-Reits, Manulife US Reit offers the best proxy to the strengthening US economy via its three quality freehold office properties.
The US office market is gaining traction with strong jobs data and the new president's pro-business policy stance likely to provide further impetus.
With the Reit offering superior FY17 forecast yields of 7.3 per cent, above S-Reits' average of 6.4 per cent, we believe there is room for further yield compression. Maintain "buy" and a target price of US$0.96 (12 per cent upside).
SINGAPORE POST | HOLD
TARGET PRICE: $1.42
FEB 14 CLOSE: $1.375
OCBC Investment Research, Feb 14
On Singapore Post's first trading day after the release of its Q3 FY17 results, the stock opened about 7 per cent lower at $1.365, but promptly recovered some losses, closing the day at $1.405 or 4.4 per cent lower on heavy volume.
We believe this was largely due to disappointing results, as well as the declaration of a lower interim dividend (year-on-year as well as quarter-on-quarter in absolute per share terms).
We find this very similar to what happened post its Q2 FY17 results - the stock then had closed 6.97 per cent lower at $1.535 on Nov 7, 2016 following the release of results on Nov 4, 2016 - and the reasons behind the share price movement were pretty much the same, in our view.
At current price level, SingPost has a forecasted dividend yield of about 2.8 per cent, which is probably acceptable for a company well-positioned to benefit from logistics and e-commerce growth, although time will be needed for an earnings boost.
VALUETRONICS HOLDINGS | ADD
TARGET PRICE: $0.72
FEB 14 CLOSE: $0.63
CIMB Research, Feb 13
Q3 and nine-month FY17 core net profit formed 31 per cent and 81 per cent of our FY17 forecasts, which we deem in line as we expect Q4 to be seasonally weaker.
The revenue of both consumer electronics and industrial and commercial electronics segments increased by 92 per cent and 8 per cent year-on-year in Q3 FY17, with more products in the pipeline.
In our view, Valuetronics is still cheap at 8.7 times FY17 price-earnings ratio (3.5 times ex-cash), given its sustainable earnings growth and attractive FY17-19 forecast dividend yields of 6.4 per cent.
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