Money Talk: Dairy Farm, Libra Group, CapitaCommercial Trust

SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.

1. Dairy Farm

Broker: OSK-DMG

The growth of modern retailing is at an inflection point in several Asean markets. In China, the market is still fragmented, with opportunities to consolidate market share. Dairy Farm is an excellent play on these themes, given its unrivalled scale.

Dairy Farm has a diversified portfolio, with mature market cash cows providing stability against emerging Asian growth markets such as Indonesia and the Philippines. It has leadership positions across most of its businesses. With its scale and balance sheet, we believe the company can not only withstand intensifying competition but also emerge stronger from it.

Initiate coverage with a contrarian BUY call and target price of US$11.20.

2. Libra Group

Broker: OCBC

Based on an analysis of this mechanical and electrical engineering specialist's order book, upcoming full-year 2014 earnings is forecast to increase a whopping eight times year-on-year to $4.7 million.

We highlight that this under-the-radar company is already showing initial signs for an earnings upswing: First half 2014 earnings had jumped 218.1 per cent year-on-year to $3 million.

Initiate coverage with a BUY call and a fair value estimate of 33 cents.

3. CapitaCommercial Trust

CCT's third-quarter distribution per unit (DPU) came in at 2.1 cents, which brings nine-month DPU to 6.32 cents. This is in line with our above-consensus full-year 2014 estimate of 8.43 cents but beat the Bloomberg consensus estimate of 8.3 cents.

Prime office rents continued their positive momentum with CCT's average portfolio rent up 2.3 per cent quarter-on-quarter to $8.42 psf from $8.23 in the second quarter and $8.22 in the first quarter, reflecting the significant positive rent reversions in the third quarter, which saw only 131,000 sq ft signed.

We expect the office rents to continue the uptrend given the limited Central Business District prime office supply before the second half of 2016.

Maintain OVERWEIGHT, raising our price target to $1.87.

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