China Aviation Oil 1Q17:
Hitting the right notes
■ 1Q17 net profit of US$25.3m rose 41.1% qoq and 4.7% yoy, and accounted for 25.6%/25.9% of our/consensus forecasts.
■ Increased trading optimisation activities boosted 1Q17 GP margin to 0.47% (4Q16: 0.32%), alleviating the fall in volumes traded (1Q17: 7.3m mt vs. 4Q16: 8.3m mt).
■ Associate contribution came in at US$14.9m (+11.8% qoq/+5.0% yoy).
■ Maintain Add and TP of S$2.28, based on 13x FY18F P/E (c.17% discount to peer average).
Cache Logistics Trust
Soft DPU boosted by capital distribution
1Q17 gross revenue in line with our forecast
1Q17 DPU from operations exceeded our forecast by 5.0%
Quarter-on-quarter improvement in occupancy to 97.2% from 96.4%, but WALE continues to shorten to 3.6 years
Adjusted our FY17e/FY18e revenue forecast higher by 1.6%/1.5%
FY17e/FY18e DPU forecast adjusted higher by 3.9%/1.3%
CapitaLand Mall Trust: Stable DPU but rental reversions turned negative
CapitaLand Mall Trust (CMT) reported a 4.3% and 6.1% YoY decline in its 1Q17 gross revenue and NPI to S$172.0m and S$120.1m, respectively. However, DPU was flat at 2.73 S cents and was within our expectations. This was due to a smaller amount of taxable income available for distribution to unitholders which was retained. If we add back the income retained, adjusted DPU would have fallen 6.4% YoY to 2.87 S cents. 1Q17 saw a slight dip in shopper traffic, and tenants’ sales psf, while negative rental reversions of 2.3% were recorded. CMT is currently trading at FY17F distribution yield of 5.5%, which is in-line with its 5-year average. Although the operating environment is likely to remain tough, we believe CMT’s stature as a quality defensive blue-chip stock would still provide value for investors in light of geopolitical tensions and macroeconomic uncertainties. As such, we maintain our BUY rating and S$2.20 fair value estimate on CMT.
|UOB KAYHIAN||DBS VICKERS|
Keppel Corporation (KEP SP)
1Q17: Earnings Supported By S$143m In One-offs; O&M Barely Breaks Even
Keppel’s 1Q17 core earnings missed our and consensus expectations by a huge margin. Headline earnings of S$260m (+24%) was supported by S$143m in one-offs. Excluding this and fair value gains, core net profit was S$104m (-50%). The key drag was the O&M unit, which saw earnings decline by nearly 100%. The outlook remains challenging on the O&M front. Property appears stable, but we note challenges. Cut 2017 earnings estimate by 14%, and lower target price to S$6.55. Maintain HOLD. Entry price: S$5.90.
ComfortDelgro (CD SP)
SBS Transit wins 3rd Bus Package tender
• SBS Transit wins 3rd Bus Package with S$480.3m contract pricing
• 26 bus services, of which 13 services are currently operated by SBST
• A pleasant surprise; expect minimal 1-2% accretion to forecasts
• Maintain BUY, TP: S$2.94
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