Compiled by Navin Sregantan
| BUY (MAINTAINED)
AUG 21 CLOSE: $0.965
TARGET PRICE: $1.82
DBS Equity Research,Aug 21
During the investor conference call hosted by DBS, Yangzijiang CFO Liu Hua reassured the investment community that the chairman's assistance in an investigation is not related to the group and operations are carrying on as usual.
Executive chairman Ren Yuanlin has been the prominent figure of Yangzijiang, but his son Ren Letian succeeded him as CEO in March 2015, after having been on rotation through the various divisions of the shipyard for nearly 10 years.
The shipbuilding business has done well in the past four years under his leadership, allowing the chairman to take a step back to focus on the investment segment.
Existing shipbuilding customers who have expressed concerns over the incident involving the chairman are comforted by the clarification.
Bankers have expressed confidence with Yangzijiang; as far as we understand, this event should not trigger events such as loan reviews.
While most investors are understandably concerned, some shareholders in Hong Kong and China, who are more familiar with such events, have expressed their confidence in Yangzijiang.
| NEUTRAL (MAINTAINED)
AUG 21 CLOSE: $10.66
TARGET PRICE: $11.50
RHB Research Institute, Aug 20
After attending OCBC Bank's presentation on its Greater China franchise, we are optimistic on further growth there.
However, net interest margin (NIM) contraction could lower overall earnings growth.
Our target price is derived from long-term return on equity (ROE) assumption of 11.7 per cent (same as for the first half of FY2019's), factoring in digitisation-driven cost efficiencies accompanied by marginally-narrowing NIM.
We lower our long-term ROE assumption, given increasing global economic uncertainties.
We believe OCBC's share price could be volatile in the short term, given expectations of inorganic expansion; its management has also indicated that it is looking at opportunities.
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