GENTING SINGAPORE | BUY
TARGET PRICE: $1.25
MAY 4 CLOSE: $1.085
Maybank Kim Eng Research, May 4
Genting Singapore will report Q1 FY17 results on May 12. While it may have ceded mass market share in Q1 FY17, we believe it will regain this in Q2 FY17.
Factoring in higher VIP volume and lower VIP rebate rates, we lift our earning before interest, tax, depreciation and amortisation (Ebitda) by 14 to 16 per cent and our target price by 14 per cent to $1.25.
This remains based on 12 times FY17 estimated enterprise value-to-Ebitda, its eight-year mean. We now estimate Q1 FY17 estimated Ebitda of $250 million (Q4 FY16: $233.7 million, Q1 FY16: $192.5 million). Maintain "buy" with catalysts expected from a potential Japanese casino licence. Risks to our call include below theoretical VIP win rates and more bad debts.
HONGKONG LAND HOLDINGS | BUY
TARGET PRICE: US$8.51
MAY 4 CLOSE: US$7.68
DBS Group Research, May 4
In the past three months, Hongkong Land's share price appreciated 14 per cent amid the improving office market in Central. Meanwhile, the stock is trading 32 per cent below our assessed current net asset value.
Valuation is by no means expensive from a historical viewpoint. The tender of the Murray Road car park building site will close on May 12. We expect this tender to draw tremendous interest from developers and China-based financial institutions.
Any encouraging tender result could prompt a revaluation of office assets in Central and re-rating of office landlords with heavy exposure there.
We believe that Hongkong Land could trade up to US$8.51, 30 per cent discount to our December 2017 NAV estimate.
BREADTALK GROUP | BUY
TARGET PRICE: $1.60
MAY 4 CLOSE: $1.49
RHB RESEARCH, MAY 4
BreadTalk announced a strong set of Q1 FY17 results on May 3. Excluding $9.3 million of capital gain from the divestment of TripleOne Somerset, the group registered a positive profit after tax and minority interests of $1.4 million - a turnaround from Q1 FY16 (loss of $5.4 million).
We believe the positive momentum would continue as management continues to focus on improving profitability. The group would be paying out a special dividend of 2 cents. Maintain "buy" with higher target price of $1.60 (from $1.50, 14 per cent upside).
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