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Mall Than A Shopping Mall


Strong maiden earnings, maintain BUY

Sasseur REIT delivered strong maiden earnings with DPU of SGD1.587cts for its 28 Mar to 30 Jun 2018 period, 4.6% ahead of its IPO projection. Sales growth of 16-142% at its four outlet malls outpaced our 3-40% forecasts with momentum expected into the seasonally stronger 2H. Despite strong results, our forecasts and DDM-based SGD0.90 TP (WACC: 10.7%, LTG: 3.0%) are unchanged as we await further confirmation due to its brief reporting history. With downside protection from risk-absorbing EMA structures, the risk to DPU is to the upside given stronger-thanexpected sales performance thus far.


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Oversea-Chinese Banking Corp (OCBC SP)

2Q18: Potential To Gradually Raise Dividends


2Q18 net profit grew 16% yoy, driven by strong treasury-related income from customer flows, cost discipline and low credit cost. Management expects a significant portion of mortgages to be re-priced in 3Q18, which would bolster NIM expansion. The final dividend could be 22 cents if OCBC pays out 40% of earnings as dividends in 2018. Maintain BUY with a higher target price at S$13.68.


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Sembcorp Industries Ltd

India operation turned around



 2Q18 revenue and net profit met our expectation.

 Utilities in both Singapore and China delivered healthy performance. And India turned profitable, but some operational issues remain.

 Marine segment still dragged the group improvement.

 We lowered our FY18e EPS from 18.9 SG cents to 17.7 SG cents, due to prolonged weak profitability from SMM. After incorporating a lower target price of S$1.78 for SMM, based on sum-of-the-parts method, we maintain our call to BUY with a lower target price of S$3.70 (previously S$3.83).


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Perennial Real Estate Holdings

Making slight progress


■ 2Q/1H18 core net profit was below our projections.

■ PIHMH opened in Jun; other China development projects are being progressively developed.

■ Singapore properties enjoyed high occupancy; Capitol Kempinski Hotel to open in Oct.

■ Maintain Add with an unchanged TP of S$0.99.


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MindChamps Preschool

More Acquisitions To Come


Maintain BUY with TP under review pending a call with management later today. 2Q18 results announced yesterday evening missed. Although 2Q18 PATMI surged 83% YoY, 1H18 results represented only 21% of our full-year estimate compared to 1H17 results that accounted for 29% of FY17 recurring PATMI. We think there is potential for catch-up in 2H18, given MindChamps has completed the acquisition of four Australian preschools in Jun and Jul 2018. It also announced the acquisition of another two preschools in Australia, which is expected to have a positive impact to FY18F earnings.


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Banks: You can bank on it!


Despite recent volatility, the three local banks reported a relative good set of 2Q18 results. More importantly, the guidance is still fairly positive. With more rate hikes ahead, NIM is likely to stay at current or higher levels. Based on current consensus estimates, net earnings growth is projected at 21% in FY18 and 11% in FY19 – record earnings for the banks. This underlines optimism in terms of growth expectation for both the Net Interest Income and Non-interest Income. The bumper crop of higher dividends also meant that on an annualized basis, dividend yields range from 3.5%-4.5%. With lower allowances, improving margins and healthy dividend payout ratios and yields, we remain fairly optimistic on the outlook for the banks. We have BUY for both DBS and UOB.


LionelLim8.16Check out our compilation of Target Prices

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