MAPLETREE LOGISTICS TRUST | HOLD
TARGET PRICE: S$1.06
MARCH 24 CLOSE: S$1.085
OCBC INVESTMENT RESEARCH, MARCH 24
Mapletree Logistics Trust (MLT) recently announced that it has completed the divestment of its 20, Old Toh Tuck Road, property at a sale consideration of S$14.25 million - an attractive price, in our view.
Looking ahead, management has signalled to the market that it will continue to explore opportunities to recycle its capital. This would involve divesting its older properties with less modern specifications and/or lower yields and redeploying capital.
At current price level, which we believe is fair, MLT is trading at FY17F and FY18F distribution yields of 6.8 per cent and 7.0 per cent, respectively.
CHINA AVIATION OIL | ADD
TARGET PRICE: S$2.28
MARCH 24 CLOSE: S$1.475
CIMB RESEARCH, MARCH 23
WE hosted a non-deal roadshow for China Aviation Oil (CAO) on March 21. Discussions centred on the outlook for the jet fuel business, associate contributions, and potential mergers and acquisitions.
CAO's position as sole imported (bonded) jet fuel supplier in China makes it a proxy for China's growing outbound travel segment, which we expect to expand with urbanisation and "internationalisation" policies.
In our view, CAO's prime position in two major aviation hubs (China and US) underpins future growth and CAO's cash pile is earmarked for potential M&As.
Management said it is always on the lookout but is selective in investments. Management's preference is strategic assets or assets that give it access to more aviation hubs.
FRASER & NEAVE | NOT RATED
MARCH 24 CLOSE: S$2.33
RHB RESEARCH, MARCH 24
Since December 2016, F&N has deployed a substantial part of its war chest to increase its stake in Vietnam Dairy Products JSC, also commonly known as Vinamilk.
F&N has spent about S$850 million to raise its stake in the Vietnamese dairy company to 17.7 per cent from 11 per cent.
Growth through acquisitions is in line with F&N's goals to rebuild itself into a regional food and beverage power house.
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