Compiled by Navin Sregantan
CITY DEVELOPMENTS | BUY (UPGRADED)
AUG 13 CLOSE: $9.09
TARGET PRICE: $11
DBS Equity Research, Aug 13
We believe City Development's share price could trade up to the higher end of the FY2013-2017 trading range.
This is given the positive catalysts of potential successful privatisation of Millennium & Copthorne Hotels (M&C) at below book value, investments and redevelopment potential to build its recurring income and better-than-expected sell-through rates, especially in the luxury market.
Contrary to market expectations, City Developments has successfully achieved better-than-expected sell-through rates especially in the luxury market, despite the weak market sentiment.
We upgrade City Developments to a "buy" and raise our target price to $11 from $9.50 previously, based on a lower 30 per cent discount to revalued net asset value (NAV), which implies 0.95 time FY2019 price-to-NAV at 0.5 standard deviation below historical average.
Potential catalysts are that property sales remain strong despite the change in sentiment and that there is growth in recurring income.
The inability to complete the privatisation exercise of M&C could limit potential upside to revalued net asset value.
| BUY (UPGRADED)
AUG 13 CLOSE: $15.28
TARGET PRICE: $16.30
RHB Research Institute, Aug 13
Despite worsening tensions between the US and China, Venture Corp delivered flat year-on-year earnings in the first half of FY2019 - in spite of its weaker Q2 numbers.
Management expects the volatile economic environment to persist, but has several initiatives in place to help Venture weather related near-term challenges.
This, together with a few new product introductions scheduled for Q3-Q4, leads us to expect a better outlook for the company ahead.
Venture will continue to focus on its long-term strategy and build its ecosystem to foster growth.
Contributions from new customers won in past years are also expected to grow year-on-year in 2019, but this could be impacted negatively by the ongoing trade dispute between China and the US.
With new product introductions (NPIs) from new customers and existing customers in the second half of FY2019, coupled with the recent sizeable share price correction to its current levels, we upgrade Venture to "buy".
Key risks to the rating are slowing economic growth and a worsening of the US-China trade war.
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.