Delfi - Sweeter By The Day

Upgrade to BUY from Neutral, with a new SGD1.47 TP from SGD1.54, 11% upside, as we see value emerging from the retracement in share price. We remain optimistic for the full-year result, as consumer confidence in Indonesia picks up. Meanwhile, Delfi’s efforts to focus on core brands have shown positive results in sales since 1Q18. We believe the uptick in volume could more than offset the negatives from IDR depreciation.

Silverlake Axis - Riding On Banks’ Spending Recovery

Maintain BUY and SGD0.65 TP, 25% upside. Silverlake’s poor FY17-18 financial performances have been on regional banks cutting/pulling back on major IT spending over the last two years. However, we understand these banks are now open to large IT capex again, with some needing to upgrade core banking systems. This trend is justified by Silverlake’s contract wins over the last few months and orderbook at near record highs. Hence, we think earnings will surge strongly over the next two years, especially in FY19, and maintain our call on this counter.

CITIC Envirotech - Minimal Trade War Impact Amid Rosy Outlook

With Trump announcing new tariff measures on China, China’s swift counter looks like the beginning of a trade war. While Chinese export-oriented firms may suffer, CEL is a different story with its defensive environmental business and government contracts with new order wins pushing to Rmb2.7b ytd. Its share buyback is a vote of confidence as its low PE and high dividend yield make it an attractive play on China’s war on pollution. Maintain BUY and target price of S$1.06.

China Aviation Oil - Streamlining its associate portfolio

■ China Aviation Oil (CAO) announced the intention to dispose of its entire 39% equity interest in China Aviation Oil Xinyuan Petrochemicals Co Ltd (Xinyuan).

■ Xinyuan is a minor contributor to CAO’s share of associates profit; hence sale will have negligible impact on CAO’s profitability, in our view.

■ Maintain Add and TP, based on 12.5x CY19F P/E (c.20% discount to peer average).

Asia Semiconductor Sector - Computex 2018: IoT innovations and AI driving more investment into the cloud

■ A wave of edge compute also driving further upgrades to the cloud. The 38th annual Computex was held in Taiwan from 5-9 June with 1,600 exhibitors and 41,000 visitors, and events from Intel, Microsoft, NVIDIA, ARM, Mediatek, Dell, Qualcomm and Asustek. We also conducted meetings with IC companies and ODMs profiled in the report. The 2018 event was organised around AI, 5G, blockchain, IoT, innovation and startups, and gaming/VR.

Property Devt & Invt - Uptick in May home sales

■ May sales surged 53% mom to 1,121 units.

■ Pace of new launches has accelerated; take-up rates remain healthy.

■ Maintain sector Overweight. Top picks remain UOL and City Developments

APAC Realty - Opportunity to accumulate

What’s New
• Recent price weakness an opportunity to accumulate

• Uptrend in property market intact

• Expect APAC to deliver stronger 2H18 earnings on strong project pipeline and active en-bloc activity

• Reiterate BUY; TP reduced to S$1.22

Singapore Telecommunications - Expanding Fixed Broadband In Australia And Thailand

Optus is gaining market share in Australia and TPG Telecom’s commercial launch could be blunted by the lack of traditional voice services. For its regional mobile associates, Telkomsel seeks to restore pricing stability after the festive Ramadan season while AIS targets to garner market share of 20% in fixed broadband by 2020. Singtel provides certainty by promising ordinary dividends of 17.5S cents for the next two financial years. Maintain BUY. Target price: S$4.22.