UOB KAY HIAN, MARCH 6
ADDING in a new pick to "buy" and one to topslice.
We introduce Sunningdale into our Alpha Picks after our "buy" initiation with a target price of S$1.83.
We remain believers in China Aviation Oil (CAO) and Food Empire as CAO will continue to benefit from the robust growth in China's civil aviation industry and the global aviation industry, whereas Food Empire is an inexpensive consumer proxy for Russia and the Ukraine.
Sembcorp Marine ("hold" rating) is a candidate for investors to topslice or short after its 47 per cent year-to-date rise, which we believe is not justified by its fundamentals.
Q & M DENTAL GROUP | REDUCE
TARGET PRICE: S$0.65
MARCH 6 CLOSE: S$0.69
PHILLIP SECURITIES RESEARCH, MARCH 6
We adjusted our forecast FY17 earnings per share (EPS) lower by about 28 per cent to 1.69 Singapore cents after accounting for lower FY17F revenue growth expectation, and about 26 per cent loss of profit from Aoxin and Aidite.
Our FY17F EPS excludes gain on spin-off of Aoxin and spin-off listing costs.
Potential re-rating catalysts would be the group stepping up its pace of acquisitions or picking up favourable deals and to revive its businesses in Malaysia.
DAIRY FARM | BUY
TARGET PRICE: US$10
MARCH 6 CLOSE: US$8.78
RHB RESEARCH INSTITUTE, MARCH 6
FY2016 results were positive and in line with expectations. Underlying profit grew 7 per cent, mainly on margin expansion.
We are encouraged that growth was achieved against a weak consumer sentiment in most of its markets, rental pressures in its core Hong Kong market, and weaker regional currencies.
We believe the company is still in the early phase of a giant operational improvement upcycle, initiated by the major corporate re-organisation in 2014. Dairy Farm remains a conviction "buy", with a higher target price of US$10 (from US$8.50, 18 per cent upside).
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