Compiled by Andrea Soh
SINGAPORE TELECOMMUNICATIONS | BUY
TARGET PRICE: $4.53
SEPT 14 CLOSE: $3.67
UOBKayHian, Sept 14
Singtel will benefit from growth in Indonesia and India. Telkomsel enjoys double-digit organic growth in subscriber base and a continued surge in usage of data.
Bharti Airtel should experience a recovery in FY19 due to the massive industry consolidation.
For Singtel Optus, competition is expected to intensify as TPG Telecom launches mobile services to become the fourth mobile operator in Australia.
Inclusive of special dividend from divestment of NetLink Trust, Singtel provides an attractive dividend yield of 7.2 per cent for FY18 and 5.2 per cent for FY19.
DBS | BUY (UPGRADE)
TARGET PRICE: $22.50
SEPT 14 CLOSE: $20.35
OCBC Research, Sept 14
DBS's share price has dropped from a high of $22.25 to a low of $20.38 yesterday, a decline of 8.4 per cent.
This is higher than the STI or its peers.
We expect the strong performance of global and regional markets in Q3 17 to translate into better non-interest income.
The addition of ANZ will also drive its wealth business in 2018, both in terms of assets under management and revenue.
Since our previous report in early August, where we recommended re-entry at lower price level, the current price correction has presented an opportunity to accumulate this stock again.
At current price, and with a dividend yield of 3.2 per cent (based on increased dividend payout this year), we are upgrading DBS to a "Buy".
OFFSHORE AND MARINE | NEUTRAL
CIMB Research, Sept 13
Seadrill has filed prearranged chapter 11 cases in the Southern District of Texas together with the agreed restructuring plan.
Sembcorp Marine ("Add", TP: $1.87) and Mermaid Maritime ("Reduce", TP: $0.14) are exposed to Seadrill.
Despite Seadrill's chapter 11 filing, SMM's standstill agreement with Seadrill's unit is likely to be further extended.
MMT's charter of its three jack-up rigs should continue until expiry in 2019, with risks from financing should they not be part of Seadrill's restructuring plans, in our view.
Our top sector pick is Yangzijiang ("Add", TP: $1.66) for earnings growth and orders.
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.