Compiled by Stephanie Luo
SINGAPORE PROPERTY | POSITIVE
Maybank Kim Eng Research, Nov 16
The sector is in the early stages of a recovery and recent share price weakness on the back of profit-taking should be an opportunity to raise exposure.
Three things to watch for the next potential leg up: RNAV upgrades from accretive land deals, lower home vacancies, and a recovery in residential rents.
UOL and CityDev remain our preferred large caps for an unfolding rebound in Singapore's property market.
For investors with lower liquidity thresholds, GuocoLand offers compelling relative value with improving fundamentals.
Tenders for at least 13 residential sites are scheduled to close at year end.
These could add 3,600 units to the pipeline for property developers and improve their earnings visibility.
With the bulk of the land located in the central part of the island, tender interest could indicate developers' confidence in the high-end market.
With a resurgent collective sale market providing many options to acquire fresh sites, we believe developers will be more selective and rational in their bids.
We believe winners of accretive land deals could be re-rated on the back of RNAV upgrades.
MERMAID MARITIME | HOLD
NOV 17 CLOSE: $0.137
TARGET PRICE: $$0.14
DBS Group Research, Nov 16
Mermaid's order book at end-Q3 17 has recovered to US$174 million (S$236 million) from the low of US$99 million at end-Q2 17, boosted by the extension of a contract on the Asiana's long-term charter in the Middle East.
However, continued competitive pressures and a deferment of subsea jobs by oil companies resulted in low vessel utilisation and revenues in Q3 17.
Q4 17 should be better as these delayed contracts are executed, but visibility on next year's recovery is weak at this point.
Q1 18 should also be particularly weak as three key vessels go into drydock for their intermediate and five-year surveys.
On the plus side, Mermaid has a healthy balance sheet and thus does not warrant the kind of distressed valuations seen in other offshore and marine stocks.
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.