DBS Group Holdings is an investment holding, treasury and funding vehicle for itself and its subsidiaries. Co.'s main subsidiary is DBS Bank Ltd, which is engaged in a range of commercial banking and financial services, principally in Asia. Co.'s various business segments are: Consumer Banking/ Wealth Management, which provides individual customers with a range of banking and related financial services; Institutional Banking, which provides financial services and products to institutional clients; as well as Treasury, which provides treasury services to corporations, institutional and private investors, financial institutions and other market participants.
Banks suffered the double whammy of the COVID-19 pandemic and a sudden collapse in crude oil prices in 1Q20. The impact on asset quality is bruising, but banks are able to weather these challenges due to their adequate provisioning and strong capital base. DBS and OCBC guided credit costs of 80-130bp and 100-130bp respectively, on a cumulative basis over 2020 and 2021, which are in line with our expectations. Maintain OVERWEIGHT. BUY DBS (Target: S$22.30) and OCBC (Target: S$9.78).
KEY HIGHLIGHTS Strategy Alpha Picks: Strong Outperformance: Our portfolio gained 13.3% mom in April, significantly outperforming the FSSTI’s +5.8% mom. For May, we add FEHT and Koufu, and remove ST Engineering and Food Empire. TRADERS’ CORNER Silverlake Axis (SILV SP): Trading Buy First Resources (FR SP): Trading Sell
Despite facing challenges in building new towers as a result of social restrictions, TOWR should not see any significant impact on revenue. Currently, about 80-90% of tenancy addition comes from collocation contracts. This trend should persist further especially as operators must strengthen capacity to accommodate the jump in data traffic. We expect 2020 revenue/EBITDA to rise by 16%/19% yoy. Maintain BUY with higher target price of Rp1,050.
GREATER CHINA Sector Healthcare: Fear not of GPO, focus on innovation. Property: Real estate data continues to reflect a pick-up. Results So-Young International (SY US/BUY/US$10.10/Target: US$13.00): 1Q20: To post a steady recovery after a weak quarter with outlook expected to improve gradually. Re-initiate Coverage Hong Kong Exchanges and Clearing (388 HK/BUY/HK$254.80/Target: HK$288.00): Indispensable role as the bridge between China and the world. INDONESIA Update Astra Agro Lestari (AALI IJ/BUY/Rp6,200 /Target: Rp7,700): Reiterate BUY on share price weakness, supported by higher CPO prod...
A second week of consolidation with S-REITs easing 2.2%. MAGIC lost 8.5% due to resumption of social unrest in Hong Kong. Hospitality REITs FHT, ARAUS, FEHT and CDREIT and retail REITs CT, MCT and FCT were among top losers. EREIT (insider buying), UHU (easing of lockdown) and MLT (inclusion in MSCI Singapore index) registered modest gains. We turn the spotlight on SASSR, a play on recovery in domestic consumption in China. Maintain BUY on SASSR with target price at S$0.96.
KEY HIGHLIGHTS Sector REITs: S-REITs Weekly. Results PropNex (PROP SP/BUY/S$0.51/Target: S$0.65): 1Q20: A silver lining in the COVID-19 crisis. Update Sembcorp Industries (SCI SP/HOLD/S$1.55/Target: S$1.70): A subdued 1Q20 update. TRADERS’ CORNER Frasers Centrepoint Trust (FCT SP): Trading Buy China Aviation Oil Singapore (CAO SP): Trading Buy
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