Compiled by Claire Huang, The Business Times
GENTING SINGAPORE | BUY
TARGET PRICE: $1.53
NOV 7 CLOSE: $1.27
Nomura, Nov 7
We reiterate our "buy" rating on Genting Singapore as we believe the stock should maintain its recent run (up 36 per cent year-to-date), backed by another strong Q3-17 adjusted Ebitda of $320 million, and should lead to further street upgrades, with adjusted Ebitda margin of 51 per cent versus 35 per cent for FY16.
We were encouraged by gaming volumes increasing (VIP roll +26 per cent year-on-year and slot handle +8 per cent year-on-year) and continued strength in non-gaming offerings with revenue +16 per cent quarter-on-quarter. At the same time, management kept a tight lid on trade receivables and impairment losses.
Barring hold-related volatility, we think Genting can now achieve $1.15 billion annualised adjusted Ebitda (versus our previous estimate of $1 billion).
OUE LIMITED | BUY
TARGET PRICE: $2.47
NOV 7 CLOSE: $2.01
OCBC Investment Research, Nov 7
OUE's Q3-17 profit after tax and minority interest fell 90 per cent year-on-year to $10.7 million mostly due to the absence of a one-time gain from the sale of the extension of Crowne Plaza Changi Airport to OUE Hospitality Trust in the same period last year, lower reversal of impairment losses at OUE Twin Peaks and softer mark-to-market gains on investments.
The group has commenced operations at Downtown Gallery and Oakwood Premier OUE Singapore, which will further augment the group's recurring income base.
After updating our valuation model, our fair value estimate increases from $2.17 to $2.47. Currently trading at only 0.46 times price-to-book, we continue to see OUE's shares as attractively priced.
DBS GROUP | ADD
TARGET PRICE: $25.00
NOV 7 CLOSE: $23.49
CIMB Research, Nov 6
Its 9M-17 net profit of S$3,177 million (-4 per cent year-on-year) was below consensus and our expectations, at 68 per cent of our full-year forecast. Q3-17 net profit of $802 million was 17 per cent of our estimate.
But we view the group's move to kitchen-sink its oil and gas credit losses positively. This allows DBS to start 2018F with a clean slate.
Other positives from the Q3-17 results were the 4 per cent quarter-on-quarter increase in loan volumes and sustained business momentum, which underpinned non-net interest income.
With lower special provisions ahead and positive operating profit guidance, we upgrade DBS from "hold" to "add" with a higher target price.
Downside risk is weaker net income margin expansion.
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