CITY DEVELOPMENTS | BUY
TARGET PRICE: $15.40
MARCH 8 CLOSE: $12.94
DBS Group Research, March 8
We maintain our buy call on CityDev with target price of $15.40 as we fine-tune our residential sales and investment property valuation assumptions.
With the Singapore property market in the nascent stages of an upturn, CityDev is largely seen as a key proxy to upward trends in the Singapore residential market and has historically traded up to 1.2-1.3 times price to net asset value, which our target price implies.
Based on our analysis, CityDev is the developer with the largest amount of unsold inventory on the books, estimated at close to $6 billion comprising about 3,600 units.
These properties are located across various segments of the property market, which allow the group to capture the widest market share this year. The strong pre-sales of upcoming launch, The Tapestry, will be a catalyst for further re-rating.
WILMAR INTERNATIONAL | BUY
FAIR VALUE: $3.51
MARCH 8 CLOSE: $3.19
OCBC Investment, March 8
Looking ahead, crude palm oil (CPO) prices are likely to remain lacklustre.
India also recently raised import taxes on crude and refined palm oil, which is likely to dent imports.
India mainly imports palm oil from Indonesia and Malaysia, the world's top producers.
It is expected that the duty hike would narrow the difference between palm oil and soft oils such as soy oil and sunflower oil, which is likely to lead to increased demand for the latter two.
Pure CPO upstream players are likely to be more impacted by this development in India, whereas more diversified players such as Wilmar, which also trades in other oils, are likely to be less impacted. Wilmar remains our preferred pick in the sector. HPRY Holdings, a company wholly owned by Kuok Khoon Hong, has also been acquiring shares in Wilmar - a total of about 3.3 million shares at an average of $3.107 per share since late last month.
SINGAPORE EXCHANGE (SGX)
TARGET PRICE: $8.73
MARCH 8 CLOSE: $7.47
Maybank Kim Eng, March 8
The details of the Bursa Malaysia-SGX trading link are still being worked out with the timeline set to be end-2018. We view this as a positive development and expect synergies to come through in this government-to-government initiative.
On SGX India equity derivatives, it is: 1) working with National Stock Exchange to develop a link in Gujarat International Finance Tech city; 2) and to list successor products soon (which require regulators' approvals) and it plans to engage market participants to roll into these successor products from the current SGX Nifty suite of products.
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.
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Compiled by Angela Tan