Compiled by Claire Huang, The Business Times
KSH HOLDINGS | HOLD
TARGET PRICE: $0.87
NOV 6 CLOSE: $0.885
UOB Kay Hian, Nov 6
KSH's share price of $0.89 has surpassed our target price of $0.87 by 2.2 per cent, representing total returns of 111 per cent since our initiation.
Singapore's property market is heating up, but construction remains weak and KSH has no projects ready for launch to take advantage of this.
Upside catalysts for its Gaobeidian project also appear remote. Upside has been priced in, while downside risks remain.
We advise investors to take profit and downgrade to "hold" with an unchanged sum-of-the-parts target price of $0.87.
VENTURE CORP | BUY
TARGET PRICE: $23.00
NOV 6 CLOSE: $21.99
OCBC Investment Research, Nov 6
Venture Corporation's nine-month revenue for FY17 grew 44.5 per cent year on year to $2.92 billion, driven by a diversified revenue base, continuing strong execution of customers' programmes and deepening of collaborative partnership with strategic customers.
In line with revenue growth, 9M FY17 operating expenses rose 41.3 per cent to $2.65 billion.
Consequently, Venture's 9M FY17 profit after tax and minority interests (Patmi) came in above our expectations as it jumped 81.5 per cent year on year to $229.8 million, which formed 88.2 per cent of our FY17 forecasts.
Looking ahead, we believe Venture's margins expansion seen for 9M FY17 is sustainable as it continues to pursue its strategy of value creation for customers by engaging in research and development work alongside its customers.
We also believe Q4 FY17 will be the strongest quarter for the year based on historical track record. Hence, we are raising our FY17-FY21 Patmi forecasts by 15 per cent to 20 per cent.
MANULIFE US REIT | BUY
TARGET PRICE: US$0.98
NOV 6 CLOSE: US$0.90
RHB, Nov 6
Manulife US Reit remains one of our preferred picks among mid-cap Reits.
We have adjusted our distribution per unit figures to fully reflect the effects of a rights issue.
Our forecasts assume a 100 per cent payout ratio. Our dividend discount model-derived US$0.98 (S$1.34) target price is based on a cost of equity of 8 per cent and target price of 2 per cent.
Main risks are the ability to retain key tenants and changes to its efficient underlying tax structure.
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