Compiled by Cai Haoxiang
SMALL MID-CAP STRATEGY
DBS Group Research, Dec 5
Singapore's construction sector has been lacklustre for the past few years, plagued by falling tender prices and margin squeeze.
However, with construction gross domestic product falling at a lower rate, tender prices recovering and outlook improving for small- and medium-sized contractors, coupled with the recovery of the property sector, we believe this will provide support for sustainable improvement to the current construction landscape.
Large-cap property stocks have outperformed; second-liners and construction-related plays might be next.
We like Chip Eng Seng for its strong capability and proven track record, and see the recent correction as a buying opportunity.
We also see APAC Realty as the purest proxy to Singapore residential volumes.
In this report, we are also highlighting Lian Beng, Hong Fok, Hock Lian Seng, Tiong Seng and Keong Hong as potential property plays.
SINGAPORE CONSUMER | OVERWEIGHT
Phillip Securities Research, Dec 4
We remain "overweight" on the Singapore consumer sector.
After three lacklustre years, we expect the present rebound in economic conditions to continue and filter down to better consumer sentiment.
We have "buy" ratings on both supermarkets, Sheng Siong (target: $1.13) and Dairy Farm (target: US$9.89 or S$13.3).
They have their own fresh distribution warehouses in Singapore, allowing them to ramp up fresh offerings as well as to tap on economies of scale. Fresh products are less vulnerable to Amazon's threat.
Improving operating efficiencies will support their profitability and make them more resilient and sustainable.
In addition, they are also expanding their stores network, bringing their presence closer to consumers.
On the food and beverage segment, we have a "buy" on home-grown curry puff chain Old Chang Kee (target: $0.98) and the dominant spirits manufacturer Thai Beverage (target: $1.18), as well as an "accumulate" on Fraser & Neave (target: $2.83).
F&B manufacturers could collaborate with online intermediaries, to complement their existing distribution network.
For example, Old Chang Kee is engaging Foodpanda for delivery services, while products of Thai Beverage and F&N are available on Lazada, Redmart and Amazon Prime.
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