Compiled by Claire Huang,
The Business Times
SINGAPORE REITS | OVERWEIGHT
UOB KAY HIAN, MARCH 7
We expect a muted response to the upcoming rate hike. We view any share price weakness on rate hike concerns as an opportunity to accumulate at attractive levels.
The longer debt maturities and a higher proportion of fixed rate debts will further mitigate the impact. We prefer deep value and diversified Reits, with exposure to the industrial business park and hospitality spaces.
Ascendas Reit, Frasers Logistics & Industrial Trust, CapitaLand Commercial Trust and Frasers Hospitality Trust are our top picks. Maintain "overweight".
TALKMED GROUP | BUY
TARGET PRICE: $2.07
MARCH 7 CLOSE: $1.485
RHB SECURITIES RESEARCH, MARCH 7
We believe that TalkMed, a top private oncology specialist, is likely to awaken from its long slumber due to:
- substantially reduced losses projected at its associates, especially in Hong Kong, in 2017F;
- steps taken to improve share liquidity (proposed bonus issue);
- inorganic growth via acquisitions domestically; and
- hiring of new doctors.
With an exciting outlook and attractive dividend yield of 3 per cent to 4 per cent, we have initiated coverage with a "buy" and a discounted cash flow (DCF)-backed target price of $2.07 (45 per cent upside), implying 2017F price-earning ratio (P/E ratio) of 32 times. We believe the stock remains substantially undervalued compared to its peers.
SINGAPORE POST | HOLD
TARGET PRICE: $1.39
MARCH 7 CLOSE: $1.36
OCBC INVESTMENT RESEARCH, MARCH 7
SingPost announced on Monday that Mr Marcelo Wesseler has resigned as chief executive of SP eCommerce, and will be assisting the company to ensure a transition of duties during his period of notice till June 5. Mr Paul Demirdjian has been appointed interim CEO, US Businesses; he is currently the president and CEO of SingPost's US subsidiary, Jagged Peak.
SingPost announced last Friday that Quantium Solutions International has entered into a share purchase agreement with PT Rantai Bumi Laut to acquire an additional 18 per cent stake in PT Quantium Solutions Logistics Indonesia for a cash consideration of US$54,000 (S$76,000). SingPost is investing for the future, and time is required for efforts to bear fruit. Meanwhile, the market will likely look forward to June 1, which is when the new CEO joins the group. Maintain "hold" with a lower fair value estimate of $1.39 on SingPost.
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