RIVERSTONE HOLDINGS | BUY
MAY 5 CLOSE: $0.965
TARGET PRICE: $1.05
Maybank Kim Eng Research, May 5
Q1 FY17 results beat our expectation.
Core earnings met 29 per cent of our FY17 estimate and grew 19 per cent year-on-year.
The out-performance was due to strong volume growth in the high average selling price and high-margin cleanroom segment at 20 per cent versus our forecast of 7 per cent.
This segment has gained good traction from the mobile, tablet and liquid crystal display manufacturing industries, as several new customers were secured.
We raised our FY17 to FY19 estimates by 17 to 18 per cent, for better growth in the cleanroom glove segment and higher margin from improved raw material costs.
We rolled forward our valuation base year to FY18 estimate and maintain 16 times price-earnings multiple (+1 standard deviation above mean for its product customisation edge).
Our target price increases by 27 per cent to $1.05.
OUE HOSPITALITY TRUST | BUY
MAY 5 CLOSE: $0.72
TARGET PRICE: $0.76
DBS Group Research, May 5
We reiterate our "buy" call with a revised target price of $0.76.
While we now expect a recovery in the Singapore hospitality market to occur only next year instead of this year, OUE Hospitality Trust (OUEHT) is one of the best-positioned hospitality Reits to ride out near term headwinds.
In fact, through the rebasing of its distribution per unit (DPU) in FY16 and its timely acquisition of Crown Plaza Changi Airport extension, OUEHT should still deliver a healthy 5 per cent growth in DPU this year.
DAIRY FARM INTERNATIONAL | ADD
MAY 5 CLOSE: US$8.75
TARGET PRICE: US$9.18
CIMB Research, May 4
Management iterated during the Q4 FY16's analyst briefing that the strategy for FY17 is to drive sales while maintaining margins.
Our view then was sales growth is inherently harder than margin expansion.
Dairy Farm's Q1 management statement would suggest that we were right.
The silver lining is that the company was able to build upon FY16's momentum and continued to improve margins.
We think the benefits of its store rationalisation initiatives are still flowing through.
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