Brokers' Call: City Developments Limited


Broker: DBS Group Research

Call: Buy

Target Price: $9.60

Despite hotel operations showing some weakness in financial year 2015, impacted mainly by lower revenue per available room at its Asian hotels, they were still the largest revenue contributor with 54 per cent among all divisions, which implies a substantial proportion of stable income.

CDL expects to recognise approximately $400 million of property sales in financial year 2016 as property projects are completed.


Broker: OCBC Investment Research

Call: Buy

Target Price: $3.96

Singtel's results for financial year 2016 came in within expectations. Revenue eased 1.5 per cent to $16.96 billion, about 4 per cent below forecast. This is due mainly to the 9 per cent depreciation in the Australian dollar against its Singapore counterpart.

Reported net profit rose 2.4 per cent to $3.871 billion, while underlying net profit was up 0.7 per cent at $3.805 million. Singtel declared a final dividend of $0.107 per share, bringing the total payout to $0.175 for financial year 2016, both unchanged from 2015.

Singtel expects consolidated revenue and earnings before interest, tax, depreciation and amortisation for the group to both grow by low single digits.


Broker: CIMB

Call: Hold

Target Price: $3.49

Wilmar, the largest manufacturer of consumer pack edible oils worldwide, reflected its ambition to expand into a global consumer powerhouse during its first quarter results briefing.

The company believes it has competitive advantages over its peers in its plans to develop or acquire businesses, and plans to expand its consumer products division. This would help to widen the profit margin of its businesses, provide the group with a more stable income stream, as well as allow it to tap the expanding middle income segment in Asia and lower its distribution costs to stay competitive against its peers.

The group expects operating conditions in the second quarter to be more challenging mainly because of concerns that crush margin could come under pressure as a result of China's excessive soya bean imports in the coming months. This, coupled with the volatile markets, could impact the group's second quarter earnings in 2016.


Broker: OCBC Investment Research

Call: Sell

Target Price: $1.92

Delfi Limited, previously known as Petra Foods, reported a decent set of results for the first quarter of 2016. Revenue was down 2.5 per cent year on year to US$103.6 million (S$142.1 million), meeting 25 per cent of full-year estimates.

Notably, profit after tax and minority interests (excluding exceptional items in the first quarter of 2015) rose 7.8 per cent to S$8.4 million, which came in above expectations.

This improvement was driven by the gain of 1.6 percentage points in gross profit margin, due to a combination of higher "own brands" sales and ongoing cost containment initiatives.

Separately, the group has announced a joint-venture agreement with South Korea's Orion Corporation, to develop, market and sell a range of joint branded confectionery products in Indonesia.

A version of this article appeared in the print edition of The Straits Times on May 16, 2016, with the headline 'Brokers' Call'. Subscribe