Under OCBC Research and UOB Kay Hian Research’s radars today, are three Singapore-listed stocks that continue to show potential for upside.

These stocks are highlighted for their resilience amidst the low growth economy and their management’s plans for the near and mid-term.

Keppel Corporation

As the oil and gas (O&G) sector continues to face pressure, our local conglomerate Keppel Corporation looks to other sources of revenue and income.

Keppel Corporation recently announced that its Offshore & Marine arm is looking at small-scale Liquefied Natural Gas (LNG) opportunities in Indonesia.

Despite the weak demand in the traditional LNG market, the small-scale segment opens up some “interesting opportunities”, according to Wood Mackenzie, a data analysis company for oil, gas, metals and coal.

Several developments in Indonesia that target the thousands of island spanning across the country, home to about 260 million Indonesians.

If the developments and initiatives were to work out, the small-scale LNG market would expand, benefitting Keppel Corporation. On top of that, it has other solutions to offer, which should increase its bottom line.

Nevertheless, small-scale LNG operations are “technically and logistically” challenging, and OCBC Research doesn’t see Keppel Corporation profiting from this area in the near future.

If anything, OCBC Research expects Keppel Corporation’s property and investment arms to support earnings, “driven by China’s ongoing cycle and Singapore’s impending property market recovery”.

OCBC Research maintains their BUY call for Keppel Corporation Limited (SGX: BN4) with a target price of $7.36.

Sheng Siong Group

Following OCBC Research’s coverage of Sheng Siong Group on 7 September 2017, they featured our local supermarket chain again in their report today.

We can see that Sheng Siong Group, among other supermarket chains, is making moves to stay competitive now that Amazon is in the picture.

As of the latest provisional results, Sheng Siong Group is leading the bid for a ~3.1k square feet store in Edgedale Plains, Punggol and trailing behind in second place for another store of the same size along Woodlands Drive 73.

Moreover, over the next half a year or so, there are another 11 HDB commercial store biddings underway.

OCBC Research remains optimistic and trusts that Sheng Siong Group’s “management is capable of optimising revenue per square feet for their stores” and continue to be resilient in cost management.

As such, OCBC Research maintains their BUY call for Sheng Siong Group Limited (SGX: OV8) with a target price of $1.04.


UOB Kay Hian Research expects several airlines including Norwegian Air, AirAsia, Jetstar Asia and Qantas, to engage SATS’s airline gateway services and food solutions over the mid-term.

Among the airlines mentioned, Qantas will be SATS’s biggest win in the best case scenario. UOB Kay Hian Research forecasts an estimated 3.0% boost in net profits from Qantas.

Apart from the estimated meal provision segment’s significant contribution to SATS’s bottom line, cargo traffic is another area the service provider might see growth in for the mid-term.

In UOB Kay Hian Research’s view, the market hasn’t factored in the positive news and its impact on SATS’s earnings for the next one to two years.

Including dividends of about $0.19 per share and the potential upside, UOB Kay Hian Research estimates a 16% upside for investors (as at 13 September 2017).

UOB Kay Hian Research maintains a BUY call for SATS Limited (SGX: S58) with a target price of $5.40.

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