Tat Hong Holdings
Price – $0.375
Target – $0.40

Tat Hong Holdings’ (THH) tower crane rental division in China remained the bright spot which saw higher utilisation rates as a result from participation in new projects across several sectors such as commercial building, infrastructure, transport and power generation sectors. Segment revenue climbed higher but offset by a weaker RMBSGD. Nevertheless, the group’s revenue for 9M17 slid 13% attributable to strong competition in the industry particularly in their key markets, Australia and Singapore. Management expects FY17 results to be negatively impacted by likely impairments and on-going restructuring costs. The outlook for the group remains mixed across its business divisions with tower crane rental business as the stable performer, while we expect cost containment efforts to continue. Maintain HOLD. OCBC Investment (10 Mar)

Price – $2.86
Target – $3.10

StarHub and M1 intend to share radio access (base stations) and backhaul transmission network in a comprehensive manner across 3G, 4G and 5G. We expect a definitive deal to be signed in 4Q17, which will minimise StarHub’s capital and operating expenditure. Management anticipates TPG to launch fibre broadband services in 2H17 to build its branding in Singapore before it launches mobile services in 2H18. Meanwhile, StarHub has been streamlining its operations and exploring other avenues to reduce operating expenses. Despite its dividend yield improving to 5.6% due to its share price correction, we trim our FY17 and FY18 net profit forecasts by 0.8% and 1.7% respectively because of the heightened competition in the residential broadband space. Downgrade to HOLD. UOB-Kay Hian (9 Mar)

CapitaLand Commercial Trust
Price – $1.525
Target – $1.69

While office rents continue to soften this year, there is potential for it to bottom out at the end of 2017 and early 2018 given supply is expected to fall from 2018 onwards. Local operations of large technology companies such as Microsoft, Google and Facebook have more focus on development work in Singapore now apart from sales and marketing, which may attract more technology companies to expand locally driving office demand. Meanwhile, Capitaland Commercial Trust’s (CCT) acquisition of the remaining 60% in CapitaGreen not only helps to offset potential negative rental reversions and lower occupancies for its portfolio but also allows CCT to deliver 2% growth in distribution per unit this year. In addition, redevelopment of Golden Shoe Car Park into a commercial building will enhance CCT’s net asset value and earnings upon completion in 2021. Maintain BUY. DBS Vickers (8 Mar)

Sheng Siong Group
Price – $0.94
Target – $1.21

Although Sheng Siong Group (SSG) did not win any bid for new sites this month which was won by NTUC FairPrice with a rental rate of $13 per square foot for the 5,812 square feet of space at Bishan, we noted the absence of small players. This could indicate that irrational bidding from small players has probably eased, softening the competition in the HDB rental markets. Management cited that there are still pockets of areas where SSG does not have a presence. With 5 more commercial units up for the supermarkets to bid for over the next six months, we are optimistic that there is still room for SSG to expand its store count in Singapore. Maintain BUY. RHB Research (8 Mar)

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