Compiled by Annabeth Leow
FRASERS CENTREPOINT TRUST | BUY
TARGET PRICE: $2.48
JAN 24 CLOSE: $2.31
DBS Group Research, Jan 24
We raised our rental growth assumptions of key assets over the next few years, and we lifted the target price by 4.7 per cent as a result.
We are more optimistic than the street as we are forecasting a 7 per cent increase in distribution per unit (DPU) in 2018, against the consensus of 2.5 per cent, as Northpoint returns to full operations; and annual DPU growth of around four to five per cent in the next couple of years, whereas consensus believes DPU will stay flat.
Given the enlarged footprint and lack of supply in the north of Singapore, Frasers Centrepoint Trust retains its bargaining power in the region.
Target price was raised from $2.37 to $2.48 as we adjust rental reversions higher at key assets.
MAPLETREE LOGISTICS TRUST | ADD
TARGET PRICE: $1.43
JAN 24 CLOSE: $1.36
CIMB, Jan 23
Our "hold" rating on Mapletree Logistics Trust was premised on valuations.
Looking past valuations, Mapletree Logistics Trust's bottom-up story is constructive, with existing portfolio stabilising and growth prospects from redevelopment and asset enhancement initiatives.
Further upside could come from unabated acquisition momentum.
We upgrade the stock to "add" and raise our dividend discount model-based target price from $1.21 previously, as we roll forward our valuations and input higher long-term growth and cost of equity.
We decrease our distribution per unit forecast for 2018 through 2020, on lower revenue assumptions.
Downside risk is a turn in investor sentiment.
FRENCKEN GROUP | BUY
TARGET PRICE: $0.79
JAN 24 CLOSE: $0.645
UOB Kay Hian, Jan 22
A high-tech manufacturer with a diversified portfolio of blue-chip customers in various industries, Frencken represents an excellent proxy to Europe's economic recovery.
At current prices, this "mini-Venture" is available at bargain prices. We believe its recent disposal of Precico Electronics Sdn Bhd (PESB) is a positive and its roughly 20 per cent earnings compound annual growth rate momentum will continue into 2019.
Initiate coverage with "buy", with price-to-earnings ratio-based target price of $0.79.
Even during trough years such as 2012, where it reported a loss, the group still paid out dividends.
With a robust cash pile arising from the bumper years ahead, we are positive on the likelihood of 35 per cent dividend payout ratio to reward shareholders.
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