Brokers' take
UOL Group | BUY
Feb 29 close: S$5.66
Target price: S$7.39
DBS Group Research, Feb 29
UOL derives a significant about 50 per cent of revenue from its retail, office and hotel segments which should continue delivering stable cashflows. We expect its portfolio of commercial properties (office & retail) to be resilient in the face of headwinds from both the office and retail sectors. For offices, this is mainly due to their location along the fringes of the CBD (central business district) where there is less rental volatility, while its retail assets have a unique niche in the children and education sectors which has relatively inelastic tenant demand.
We believe that deep value lies in the group's portfolio of well-located hotels and serviced residences in Singapore, Malaysia and Australia. These hotels are held on a historical cost basis, which is conservative compared to potential realisable value. We estimate there is potential upside of more than S$0.9 billion if the valuations of these properties are marked-to-market.
Samudera Shipping Line | HOLD
Feb 29 close: S$0.195
Target price: S$0.21
KGI Fraser Research, Feb 29
Excluding the US$11.1 million write-down in Q4 FY15, Samudera's Q4 FY15 core net profit of US$4.1 million (+10 per cent year-on-year; +28 per cent quarter-on-quarter) was higher than our expectations. FY15 core net profit makes up 105 per cent of our full-year forecasts. Samudera continues to generate positive free cash flows with a continually strengthening balance sheet (net gearing now at 0.24 times versus 0.33 times, 0.52 times and 0.66 times in FY14, FY13 and FY12, respectively). Its current net gearing is one of the lowest in the shipping industry; and we expect this trend to continue, allowing the group to grow via acquisitions and provide an upside rerating catalyst. As much as we believe in Samudera's mid to long-term prospects, we remain cautious on the industry this year given headwinds from weaker economic growth and oversupply in major shipping lanes. We maintain our "hold" rating with a target price of $0.21, pegged to eight times FY16 forecast price-earnings ratio.
Thai Beverage Public Co | ADD
Feb 29 close: S$0.70
Target price: S$0.83
CIMB Research, Feb 29
Maintain "add" and sum-of-the-parts target price of S$0.83. ThaiBev's Q4 had positive data points for beer, negated by non-alcoholic drinks, higher financing costs and taxes.
We deem Q4 FY15 results as a mixed performance. While the strong showing by beer after the rebranding is highly encouraging, the other divisions are not doing as well.
Compiled by Kenneth Lim
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
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