Brokers' Take

Japfa Ltd |

Buy

Nov 10 close: S$0.66

Target price: S$1.00

DBS Group Research, Nov 10

WE believe the steep correction has more than priced in Japfa Comfeed's poor performance. We continue to expect strong demand for animal protein in Indonesia over the long term, as purchasing power typically recovers a year after the initial shock. The pace of recovery would depend on higher wages, a stronger rupiah and lower raw material costs.

We maintain our "buy" rating on the counter as there is 50 per cent potential upside to our revised sum-of-parts target price of S$1.00 (implying 7.4 times 2015 forecast EV/Ebitda) - a cut from S$1.16 previously.

Other positives are marginal producers' exit and industry's self-imposed supply reductions to conserve cash.

Innovalues |

Buy

Nov 10 close: S$0.455

Target price: S$0.65

Maybank Kim Eng Research, Nov 10

Q3 2014 was above expectations on stronger margins. This confirms our turnaround thesis. We raise forecast 2014-2015 earnings per share (EPS) by 3 to 4 per cent. Undervalued growth stock with attractive yields. 24 per cent forecast 2015 EPS growth and about 6 per cent yield at only 8 times forecast 2015 EPS.

"Buy" with higher target price of S$0.65 from S$0.52, now at 12 times forecast 2015 EPS instead of 10 times. This is still below peers' 13 times and undemanding against 22 per cent three-year EPS compounded annual growth rate.

CapitaLand |

Buy

Nov 10 close: S$3.19

Target price: S$3.84

CIMB Research, Nov 7

CAPITALAND'S results were in line with expectations, with nine-month 2014 core profit accounting for 75 per cent of our full-year estimate. While residential contributions in China were more volatile, strong recurrent income from CapitaMalls Asia (CMA) and serviced residences helped to fill the slack.

Going forward, we anticipate overall returns on equity to pick up in the medium term as the group continues to launch more residences in China and time its launches in Singapore, while CMA is expected to continue to grow both operating metrics and portfolio size through developing its pipeline of assets. It also targets to double its serviced residence portfolio by 2020. We maintain our "add" rating with a slightly higher target price of S$3.84, pegged at a 20 per cent discount to RNAV (revised net asset value).

Compiled by Cai Haoxiang

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