Brokers' take

Compiled by Cai Haoxiang

SEMBCORP MARINE | BUYDEC 4 CLOSE: $1.92

TARGET PRICE: $2.10

UOB Kay Hian Research, Dec 4

Our target price remains unchanged at $2.10, pegged to 1.6 times 2019 forecast price to book.

An improving rig market, especially for harsh environment semisubmersibles, will likely see SembMarine being able to divest the West Rigel semisubmersible at a favourable price.

This will see its balance sheet profile improve, putting prior concerns of a stretched balance sheet to rest.

A growing pipeline of orders provides earnings and cash flow visibility for the yard, further allaying concerns of a declining order book.

The improving prospects will likely drive the continued re-rating of the stock. Maintain "buy".

MAPLETREE INDUSTRIAL TRUST | HOLD

DEC 4 CLOSE: $1.98

TARGET PRICE: $2.06

OCBC Investment Research, Dec 4

We recalibrate our assumptions on Mapletree Industrial Trust following its proposed entry into the US data centre market.

Overall, we are supportive of management's move to broaden its footprint in the data centre industry and see it as a paradigm shift to fuel its next phase of growth.

Research firm 451 Research has projected demand for worldwide insourced and outsourced data centres to increase at a 5.3 per cent compound annual growth rate between 2015 and 2020.

We believe this growth would be underpinned by higher adoption of cloud services, big data requirements and proliferation of the Internet of Things.

Although we raise our fair value from $1.92 to $2.06, our "hold" rating is maintained as we believe positives have been largely priced in.

AGRIBUSINESS | NEUTRAL

CIMB Research, Dec 1

Malaysian palm oil stocks may have risen by 14 per cent month on month (m-o-m) to 2.5 million tonnes as at end-November.

A survey by the CIMB Futures team reveals a one per cent m-o-m rise in crude palm oil output in November.

We project that palm oil exports likely fell by 6.4 per cent m-o-m in November on weaker demand from India, China and the European Union.

Our survey reveals that November's production was stronger compared with October's due to stronger-than-expected growth in output from Sabah and peninsular Malaysia.

We maintain our sector "neutral" rating and top picks - First Resources and Wilmar.

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