Track record of DPU growth through strategy of portfolio rebalancing and stability through diversification
Portfolio is positioned to capture opportunities as Singapore evolves towards higher value-added manufacturing
ACCUMULATE with DDM-derived target price of S$2.86
Asian Pay Television Trust – An 11% payout in 2018
APTV generates stable and recurrent monthly subscription fees from its monopolistic cable TV business.
Management has guided 2018 DPU of 6.5 cents (11% dividend yield), unchanged from 2017.
Maintain ACCUMULATE rating with a target price of S$0.64.
Banyan Tree Holdings Limited – Patience as partnerships bear fruit
Partnerships with Vanke and AccorHotels will provide BTH with a pipeline of management contracts and scale up at a much faster pace than before.
Sustained improvements in RevPARs for BTH’s biggest market Thailand (61% of FY16 revenue for Group-owned hotels). We expect RevPAR strength for Thailand to sustain and Maldives (23% of FY16 revenue for Group-owned hotels) to improve in FY18.
Maintain ACCUMULATE with a target price of S$0.71.
CapitaLand Limited – Stable base of recurring income
Building up a base of quality recurrent income at a CAGR of c.16% (Operating EBIT growth 2013-16). Around 85% of CAPL’s total assets are now earmarked for recurrent income.
Office markets in Singapore and China are showing signs of improvement, while RevPAUs for serviced residences experience recovery in key markets.
Maintain ACCUMULATE with a target price of S$4.19.
Chip Eng Seng Corporation Ltd – Riding the SG property cycle well
Leveraged to the upcycle in Singapore residential property market with available inventory and a replenished land bank.
Close to S$200mn (33% of market cap) worth of unbilled development profits to be recognized over the next 3 years from Singapore residential projects already sold.
Maintain BUY. We raise our target price to S$1.21, as we narrow the discount to RNAV from 50% to 40% and incorporated construction business into our target price.