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Frasers Property Limited

Building a stable base


■ 1QFY9/18 core net profit was below expectations, making up 12% of our FY18F projections.

■ We expect Singapore residential earnings to improve in 2Q.

■ Australia contributions are likely to be more back-loaded, in our view.

■ International division to grow recurrent income via acquisitions in Germany and UK.

■ Maintain Add with a higher RNAV-based TP of S$2.40.


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CITIC Envirotech (CEL SP)

Opportunity To Buy Cheap On 2018 Valuations


Management is exceptionally confident about the company’s outlook amid strong government emphasis on environmental protection and we share their confidence. As one of the best in the business, CEL used to be one of the most expensive water businesses in Singapore. However, with superb profit growth forecasted for 2018, the stock is now the cheapest on 2018 valuations. Maintain BUY with DCF-based target price raised to S$1.11 on a 2.8-19.2% increase in 2017-19 earnings forecasts.


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SG Industrial REITs: Focus on a few


Ever since the start of the market correction on 5 Feb till the close on 9 Feb, unit price changes for industrial REITs under our coverage has ranged from -6.87% to -3.45%. For at least the next few days, we expect much of the price movements within the space to be dictated by market momentum. Nonetheless, we have two key tactical ideas to strengthen the portfolio for clients with exposure to the industrial REITs sub-sector. First, within the large cap industrial REITs, we favor Frasers Logistics & Industrial Trust for its 100% Australian exposure. Second, for small-mid cap REITs, we recommend switching holdings from Cache Logistics Trust to Viva Industrial Trust given their 9 Feb closing prices. Given that S-REITs valuations remain stretched despite the pull-back, we encourage investors to remain selective in their holdings.



Stellar Performance Across All Key Parameters



 4Q17 PATMI of S$1.2bn was in line with our estimates.

 Loan volume, NIMs, loans quality and Non-II results were stellar.

 Strong momentum in Consumer and SME banking segment in Hong Kong and Singapore.

 Strong momentum in WM and IB fee income.

 Maintain BUY rating with unchanged target price of S$29.30


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Perennial Real Estate Holdings

Medical hub vision slowly unfolding


Trading at 0.5x P/BV; maintain BUY.

We maintain our BUY rating with TP of S$1.05 (based on 50% discount to RNAV) on Perennial Real Estate Holdings (PREH). The stock currently trades at 0.5x P/BV, offering massive upside as it gradually realises its RNAV potential.


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LionelLim8.16Check out our compilation of Target Prices