Brokers' Take
Libra Group | Buy
Oct 27 close: S$0.215
Target price: S$0.33
OCBC Investment Research, Oct 27
Initiate coverage. Upcoming FY14 earnings are forecasted to increase a whopping 8.0 times year-on-year (y-o-y) to S$4.7 million, and FY15 earnings to grow 68.0 per cent y-o-y to S$7.8 million as the new management team, which took over operations in 1Q14, continues to expand and position the company to capitalise on the healthy public construction outlook.
In addition, the group's dividend yield is forecasted to jump dramatically from 1.6 per cent last year to 8.1 per cent in FY14 and 9.7 per cent in FY15. Increased visibility of its earnings and dividends growth will be compelling re-rating catalysts.
Dairy Farm International | Buy
Oct 27 close: US$9.44
Target price: US$11.20
DMG and Partners, Oct 27
Initiate coverage with contrarian "buy" rating. Growth of modern retailing is an inflection point in several Asean markets. Its appetite for China may have returned; in August 2014, it announced its biggest merger and acquisition to date, taking a 20 per cent stake in Yonghui Superstores for US$925 million.
Key risk is a depreciation of regional currencies against reporting currency USD, although this is mitigated by having around 40 per cent of revenue from Hong Kong.
Ascott Residence Trust | Buy
Oct 27 close: S$1.24
Target price: S$1.40
DBS Group Research, Oct 24
ART is acquiring three serviced residence operated by Quest (Australia's largest serviced apartment provider) in Greater Sydney for A$83 million (S$93 million). This is expected to contribute to a 0.2-0.3 per cent increase to FY15-16 forecast distribution per unit (DPU); acquisition is funded by recent issue of perpetual securities.
The strategic partnership between Quest and ART's sponsor provides additional acquisition pipeline. Maintain "buy", target price revised to S$1.40.
Compiled by Andrea Soh
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.
