Brokers' take

MAPLETREE GREATER CHINA COMMERCIAL TRUST | BUY

TARGET PRICE: $1.11

JAN 31 PRICE: $0.955

DBS Group Research, Jan 31

While Magic faces the challenge of a stronger Singapore dollar and higher property taxes at Gateway Plaza, we believe these factors are only speed humps.

As Magic cycles through these headwinds, the strength of core asset Festival Walk (about 70 per cent of net property income) and boost from the Sandhill acquisition will shine through.

Moreover, Magic offers an attractive yield in excess of 7 per cent, which we believe is high.

The key risk is a significant downturn in the HK and Chinese economies, causing a decline in rents at Festival Walk, Gateway Plaza and Sandhill Plaza.

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SEMBCORP INDUSTRIES | BUY

TARGET PRICE: $3.36

JAN 31 PRICE: $3.15

OCBC Investment Research, Jan 31

Sembcorp Industries' power plant in Chongqing has commenced full commercial operation following the completion of its second 660MW unit.

Having invested in China for over two decades, SCI's presence now spans 15 regions, and we remain positive over the company's long-term prospects.

Meanwhile, the stock is already up 12 per cent year to-date and is now close to our fair value estimate of $3.36. Post-Keppel's FY16 results which saw significant impairments, there could be a dampening of sentiment on oil-related plays, barring positive surprises in the oil price.

We maintain our "buy" rating on SCI on a longer term basis, with dips presenting opportunities to accumulate.

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PLANTATION

UOB KayHian, Jan 26

Crude palm oil (CPO) prices are likely to stay firm in 1H17 as supply is still tight. However, the market could move into oversupply from 4Q17 as production starts to normalise by end-3Q17.

We see weaker CPO prices in 2H17 versus 1H17 but maintain our price expectation of RM2,600 (S$830) for 2017.

Investors should sell on strength when share prices trend higher as companies are expected to report good 4Q16 and 1Q17 earnings. Maintain "overweight" on the plantation sectors here and in Indonesia, and "market weight" for Malaysia.

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