Starhub - A glimmer of starlight

■ Upgrade to Add with a revised target price of S$1.85. Multi-year share price decline now fairly accounts for competition risk, with potential upside surprise from cost cuts.

■ We cut FY19F-20F DPS to a more sustainable S$0.10 p.a. Still decent 6.1% yield.

■ StarHub will pursue cost optimisation in 2H18F. Our scenario analysis shows a sizeable fair value boost if cost cuts are better-than-expected.

■ Enterprise Fixed business may surprise on the upside on bigger-than-expected government contract wins and/or earnings-accretive acquisitions.

■ Key developments to watch: 
a) TPG’s service launch by year-end, 

b) TPG’s market traction by mid-2019 and

c) more details on cost cuts during 3Q/4Q18 results call. Read More

ESR-REIT - ESR-REIT’s 2Q18 DPU rose 4.7% y-o-y, mainly on acquisitions and divestment gains

• 2Q18 DPU of 1.001 Scts broadly in line

• Rent outlook to improve in FY19F as supply tapers

• Capacity for future dividends remains supported amid AEI initiative given cash hoard of c.S$75m from past divestments

• Maintain BUY with TP of S$0.63; we have yet to factor in the M&A with Viva. Read More

Cromwell European REIT - On track to outperform

What’s New
• 2Q18 DPU of 1.08 EURcts in line with expectations

• CERT on track to exceed its IPO forecasts

• In-line rental escalations offset marginal drop in occupancy

• Potential decision by French government not to acquire part of Parc Des Docks provides an opportunity to lift occupancy and rents. Read More

Hong Leong Finance - Strong 1H18, but cautious in 2H

• Net profit rose 41% y-o-y/14% q-o-q on higher interest income, offsetting higher interest expense

• Loan book grew by c. 2% q-o-q

• Higher dividends declared as expected, 5 Scts for 2Q18 (2Q17: 4 Scts)

• Maintain BUY, TP maintained at S$3.20/share after rolling forward valuation base Read More

The Strategist - MSCI August 2018 Quarterly Index Review

MSCI announced its August 2018 Quarterly Index Review. All official changes to the MSCI indices will be effective after market close on 31 August. The partial inclusion factor to China A shares will be increased from 2.5% to 5%. Read More

Wilmar International - Strongest 2Q core net profit since 2011

■ Wilmar delivered an almost tenfold jump in 2Q18 core net profit, thanks to better performances from its tropical oils as well as oilseeds and grains divisions.

■ The strong results were broadly in line with our and consensus expectations.

■ Another positive from 2Q is the interim tax dividend of S$0.035/share (+17% yoy).

■ However, the group said that a prolonged US-China trade war will negatively impact its crush margins due to lower plant utilisation.

■ Maintain Add with SOP-based target price of S$4.10/share, due to its attractive valuations and plans to list its China operations. Read More

First Resources - No surprises to 2Q18 results

Room for stronger 2H18 earnings
2Q18 core PATMI met 26%/25% of our/consensus full-year estimates – inline. We are keeping our forecasts, anticipating better 2H18 earnings. Maintain BUY and unchanged TP of SGD2.00 on 17x FY18 PER, pegged at its 5-year historical mean. We continue to like FR for its medium-term growth prospect and cost efficiency, being one of the lowest cost producers in the region. FR declared an interim DPS of 1.25sen. Read More

Memtech International - 2Q18 hit by poor margins

■ 2Q18 core PATMI of US$1m was a miss against our/consensus expectations.

■ Revenue grew 19% yoy in 2Q18, but GPM fell to 14.7% (2Q17: 17.3%) due to higher raw material costs, staff costs and more outsourcing of tooling work.

■ We expect qoq margin improvement in 3Q18F from better economies of scale.

■ Product pipeline boosted by new auto customer, medical device and military parts.

■ Maintain Add with lower EPS and S$1.43 TP (10x FY19F P/E). MTEC offers 4-5% forecasted dividend yield and currently trades at 0.9x FY18F P/BV. Read More