TIGER AIRWAYS HOLDINGS
Broker : DBS Group Research
Call : Buy
Target Price: 42 cents
Tigerair is set to see earnings recover firmly this year, driven by higher yields from capacity discipline and lower jet fuel costs. The shedding of lower-yield, loss-making routes should also boost overall yields, and help drive the carrier towards sustained profitability.
Having jettisoned loss-making associates and taken painful write-offs, Tigerair should see a full-year profit of $39 million in financial year 2016 and $55 million in FY2017.
Also, Tigerair is now a 55.8 per cent-owned subsidiary of Singapore Airlines, and they have closer working ties, such as interline cooperation with Scoot. Inclusion in the KrisFlyer programme should lead to greater benefits in the long run.
Tigerair remains vulnerable to fuel price increases, as well as risks to demand arising from economic shocks or crises such as pandemics.
CAPITALAND MALL TRUST
Target Price: $2.25
The trust is acquiring Bedok Mall for $780 million, which equates to a property yield of 5.1 per cent based on the mall's net property income for financial year 2014 .
Apart from adding a well-located property to the portfolio, the purchase should increase the trust's exposure to the resilient necessity-spending segment as well.
Bedok Mall has a 99.3 per cent occupancy rate, and it enjoyed an average monthly shopper footfall of 1.4 million during the first quarter of this year.
The purchase will complement the portfolio as it will expand assets under management by 8 per cent to $11 billion.
It will also boost the trust's exposure to the necessity-spending segment to 76.2 per cent of the portfolio.
Broker: OCBC Investment Research
Target Price: $3.33
The company secured new aerospace contracts worth $920 million in the second quarter. The projects range from airframe, component and engine maintenance to engine wash services and pilot training.
Separately, ST Engineering saw its share price fall by nearly 12 per cent, from a previous peak of $3.66 to a recent low of $3.23, after it had given guidance for a muted outlook for the first half - it expected first-half revenue to be comparable to levels in the same period last year, while profit before tax (PBT) was expected to decline.
For the full year, management has kept its comparable guidance for both revenue and PBT. The expected dividend yield of 4.4 per cent for the year is fairly decent.
Maintain a "hold".
KEPPEL DC REIT
Broker: DBS Group Research
Target Price: $1.12
The Reit's second-quarter revenue of $26 million beat prospectus forecasts by 4 per cent, thanks to higher variable income from Singapore and cost recovery clawbacks from tenants at Gore Hill in Australia.
Net property income variance was smaller at 3.4 per cent, as the trust made a one-off provision for higher property taxes levied on its Singapore data centres.
The distribution per unit (DPU) for the second quarter came in at 1.62 cents, bringing the DPU for the first half to 3.56 cents. This is in line with our estimates - we expect a stronger second half because of the acquisition of Intellicentre 2 in Australia.
The stock offers yields that exceed 6.2 per cent. Upside will hinge on better-than-expected returns from acquisitions, or whether the trust embarks on larger acquisitions.