Compiled by Cai Haoxiang
JUMBO GROUP | HOLD
FEB 19 CLOSE: $0.575
TARGET PRICE: $0.59
UOB Kay Hian Research, Feb 19
Jumbo's Q1 FY2018 results came in below expectations.
Net profit fell 19.8 per cent due to higher operational expenses, higher salaries to support new outlets and higher promotional activities. Gross margins were negatively impacted mainly due to aggressive promotions.
We lower our FY2018 core earnings estimate by 3.6 per cent as we lower our gross margin assumption slightly and increase our other operating expenses assumption.
Maintain "hold" with a lower discounted cash flow-based target price of 59 cents (previously 60 cents). Suggested entry price: 53 cents.
FAR EAST HOSPITALITY TRUST | BUY
FEB 19 CLOSE: $0.72
TARGET PRICE: $0.75
OCBC Investment Research, Feb 19
Far East Hospitality Trust's results were within expectations.
We continue to see 2018 as a period of recovery from a low base, though we tweak our revenue per available room growth rates for FY 2018 downward.
DBS Group Research, Feb 19
Four collective sales projects were sold through private treaty in the past week, bringing year-to-date collective sales to eight sites worth a collective $3.5 billion.
There appears to be a bit of "fatigue", especially when most of the recently concluded deals were sold through a private treaty after an unsuccessful public tender.
The fact that most of the sites have also been awarded at reserve price levels, rather than a premium, may indicate that developers are turning more choosy in adding to their landbank and becoming more cautious in their pricing strategy.
This slowing momentum is positive, in our view, as it means lower upward pressure on final selling prices when these projects are launched.
We maintain our belief that buyer sentiment has improved significantly, buoyed by the stronger-than-expected economic growth outlook in Singapore. Sustained sales momentum will set the stage for residential prices to rise more quickly through 2018.
We like developers who have the ability to catch the positive wave of buyer sentiment and deliver strong project sellthrough rates (UOL and City Developments). In the mid-cap space, Roxy-Pacific, with six projects to be launched this year (440 units), could see its stock price re-rate if it can achieve strong sell-through rates.
Property broker APAC Realty offers investors an opportunity to participate in the projected robust growth in transactional volume this year.
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