Compiled by Navin Sregantan
CDL HOSPITALITY TRUST (CDLHT) | BUY (MAINTAINED)
JUNE 11 CLOSE: $1.61
TARGET PRICE: $2.06
UOB Kay Hian, June 11
In the near term, we expect some drag from transitory downtime caused by asset enchancement initiatives (AEIs) as well as the absence of major events this year.
In the coming quarters, however, we expect earnings to turn around, led by the return of newly refurbished rooms at Orchard Hotel (from June) and the gradual ramp up of Raffles Maldives Meradhoo.
The refurbishment projects in progress are expected to give CDLHT's portfolio a competitive advantage in the coming years, positioning it for recovery in the Singapore hotel sector.
In the immediate term, these AEIs also serve as a defence in terms of market positioning, against some of the newer hotels (Intercontinental Singapore Robertson Quay, Sofitel Singapore City Centre, Courtyard Marriott at Novena and Andaz Singapore).
Share price catalysts include contributions from yield-accretive acquisitions and increased contributions from newly refurbished properties.
YANGZIJIANG SHIPBUILDING (YZJ) | HOLD (MAINTAINED)
JUNE 11 CLOSE: $1.44
FAIR VALUE: $1.45
OCBC Investment Research, June 11
With recent market volatility, the share price of YZJ has moved fairly in line with the broader market, rising in April and coming off in May following the recent imposition of additional tariffs by the United States on Chinese goods.
With the recent market correction, the stock has fallen 18.2 per cent from the peak of $1.65 in April to the recent low of $1.35 last month.
However, this is higher than the 9.1 per cent decline experienced by the Straits Times Index for the same period.
Hence YZJ's stock has been moving in a similar fashion to the market, though with a higher beta.
The market for new orders is "still silent", and this mainly relates to the bulker and containership segments.
The tanker market, in comparison, is relatively better, with inquiries for chemical tankers and crude oil tankers.
That said, 2020 should be a much better year in terms of new orders, as ship owners who have been holding back (hence affecting this year's new order flow) are likely to place new orders after they have more operational clarity relating to the International Maritime Organisation's sulphur content cap regulation which will be enforced from next year.
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