Brokers' take
Hutchison Port Holdings Trust | Hold
Feb 9 close: US$0.685
Target price: US$0.68
OCBC Investment Research, Feb 9
HPHT swung to a Q4 2014 loss mainly due to a HK$19 billion (S$3.3 billion) impairment charge. FY 2014 distribution per unit is 41 HK cents, but management has guided for FY 2015 DPU to dip to 33-36 HK cents, below the consensus of 38.6 HK cents.
While the impairment is a non-cash item and will not affect the trust's cash flow generation and debt servicing ability, we note that unitholder's NAV per unit has dipped significantly from HK$7.26 (end-FY2013) to HK$4.86 (end-FY2014), and believe the share price will likely react negatively to the impairment charge and lower DPU guidance. Maintain "hold" with an unchanged fair value estimate.
Singapore Airlines | Buy
Feb 9 close: S$11.84
Target price: S$12.90
DBS Group Research, Feb 9
Despite weaker than expected operating earnings, we remain confident that SIA's earnings performance in future quarters will be better given the lower cost of fuel. The group's balance sheet remains strong with over S$3.5 billion net cash after consolidating Tigerair's numbers. We project SIA to pay out dividends of 50 Singapore cents for full year ending March 2016, given the improved profit outlook and its strong balance sheet position. This equates to a 60 per cent payout and translates to a decent dividend yield of 4.1 per cent. Our S$12.90 target price is based on 1.1 times 2016 financial year price to book value, which is its historical mean and also reflects SIA's improved earnings outlook.
Super Group | Hold
Feb 9 close: S$1.225
Target price: S$1.02
Maybank Kim Eng Research, Feb 5
Super is on its way to a recovery in almost all its major markets in 2015. Q3 2014 likely marked the bottom for its falling sales and margins. Its momentum should gather pace. But with a 20 per cent rally since we upgraded it from "sell" to "hold", this outlook appears to have been factored in for now. Super trades at 17.4 times 2015 earnings, close to its peer average of 18.5 times.
We still believe Super remains a viable consumer recovery play. But it needs to manage any distress from Malaysia's GST introduction, through consumer campaigns and good tax planning. Pending greater clarity, we keep our "hold" and target price of S$1.02, based on its five-year historical mean of 15 times earnings.
Compiled by Cai Haoxiang
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.
