Compiled by Navin Sregantan
| BUY (INITIATE)
JUNE 13 CLOSE: $0.32
TARGET PRICE: $0.41
RHB Research Institute, June 13
Oxley Holdings is likely to be able to pare down debts despite the market pricing it otherwise. Oxley has $2.18 billion of debts expiring by next year.
However, the majority comprise property loans, which can easily be refinanced. Only $450 million of its retail bond needs to be paid by next year.
In addition, it also has €237 million (S$365 million) coming in 2020, from the Dublin project as well as another US$204 million (S$279 million) from its development in Cambodia.
There is still $2.4 billion worth of locally sold residential units set to be booked into its coffers, and more than $900 million from the potential value-unlocking of the Stevens Road hotels, which have been converted to freehold, which will be even more attractive to buyers.
As such, the market has, indeed, been too focused on its high net gearing and underestimated Oxley's ability to pare down loans.
Management guided that excess cash - after paring down gearing - will be used to reward shareholders with special dividends, if there are no suitable opportunities at that time.
Key risks include further property cooling measures and rising interest rates.
| BUY (MAINTAINED)
JUNE 13 CLOSE: $4.10
FAIR VALUE: $4.38
OCBC Investment Research, June 13
The aerospace arm of ST Engineering recently incorporated a joint venture company with Vietnam Airlines Engineering Company, to provide maintenance, repair and overhaul (MRO) solutions.
Existing maintenance facilities of Vietnam Airlines at two Vietnam airports will be leveraged upon, and new infrastructure will be invested in to carry out component MRO work at these facilities.
In a separate announcement, ST Engineering mentioned that it has also entered into a partnership agreement with Nokia on key technology areas such as 5G and Internet of Things (IoT) to collaborate on enhanced digital and connectivity solutions.
We expect further growth in the group's order book in the longer term with better traction in Smart City solutions and export of defence solutions.
Meanwhile, we fine-tune our estimates and our fair value rises from $4.22 to $4.38.
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.
The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.