Following a strong performance in the Singapore stock market to date, investors are finding it difficult to look for decent-priced stocks to add to the portfolio. Here, we highlight six of UOBKH’s latest stock pick recommendations for the month of May that are touted to have room for its share price to run.
Investors Takeaway: 5 Stocks To Own In The Best Performing Market In Asia
- CSE Global
CSE Global is one of the few qualified system integrators in the region for oil and gas and communication infrastructure industries. With 32 years of track record in a business with high entry barriers, CSE Global has a good competitive advantage over its peers and any potential new entrants. With oil prices on a strong recovery trajectory, UOBKH highlights CSE Global as a good proxy for the recovering oil prices. CSE Global currently has two-thirds of its order book attributed to the oil and gas sector.
UOBKH notes that Serba Dinamik recently bought a 25-percent stake in CSE Global and views this as a positive development for CSE Global as it could open up new markets in Malaysia and the Middle East.
BUY, TP $0.58
- Oversea-Chinese Banking Corporation
With an impending divestment of a 30 percent stake in Great Eastern Life Malaysia through an IPO or trade sale, Oversea-Chinese Banking Corporation’s (OCBC) share price could be in for a ride in 2H18. In about a month’s time, Great Eastern will have to submit its plan to Bank Negara and execute the plan in 2H18. UOBKH notes that proceeds from the divestment could be reinvested to further propel growth in its core commercial banking business.
BUY, TP $16.02
- DBS Group Holdings
DBS Group Holdings (DBS) had a stellar 1Q18 performance with its earnings result well above consensus estimates. Corporate loans contributed steady growth while its wealth management segment delivered a stellar performance. Moving forward, DBS management has guided for loans growth of eight percent in 2018 and remains confident to achieve a return-on-equity of 12.5 percent. UOBKH continues to recommend DBS as a core holding for growth proxy. Its generous dividend yield also gives investors additional bonus to cheer about.
BUY, TP $35.50
- Keppel Corporation
According to UOBKH, Keppel Corporation is the purest play in the offshore and marine recovery. Its solid financials and recurring profit from Keppel Capital will continue to help Keppel Corporation share price stay buoyant. UOBKH also notes that infrastructure and investments are expected to drive growth in the next few quarters.
BUY, TP $9.00
- Singapore Telecommunications
While its telco peers are worrying about competition from the fourth telco, UOBKH believes that the same worry for Singapore Telecommunications (Singtel) is unfounded. Singtel’s overseas business account for 70 percent of its bottom-line. Moreover, its overseas business continues to maintain its growth trajectory. Indonesian associate Telkomsel has registered double-digit growth in subscriber base and revenue growth from voice and data. Indian associate Bharti Airtel should also start to recover in 2019 due to industry consolidation with Tata Teleservices’ consumer mobile business. As funds and investments flow into laggards and defensive stocks, Singtel could see an influx of investment given its strong dividend yield characteristic.
BUY, TP $4.35
6. Wing Tai Holdings
At its current share price, UOBKH believes that Wing Tai Holdings (Wing Tai) is a good value play. Wing Tai is currently trading at 0.52 times forward-FY18 P/B with a deep 41 percent discount to its revised net asset value. Wing Tai is also in a net cash position, which puts Wing Tai in a good position to deploy its sizeable debt headroom. This could give Wing Tai financial ammunition to buy more landbank. Moving forward, UOBKH foresees Wing Tai further deepening its footprint in Singapore, Malaysia (post privatisation completion) and Australia.
BUY, TP $3.48