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CEI Limited

Hold for dividends


■ We provide an update on CEI post our company visit last Thursday (our last update on CEI was on 12 Feb 2018).

■ We believe it is well positioned to benefit from the US-China trade tensions as its factories are in Vietnam and Indonesia.

■ Maintain Hold but lower TP to S$0.97, based on 10x (3-year historical average P/E) FY20F core EPS.


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Sembcorp Industries (SCI SP)

Sheer Overhang; Downgrade To HOLD


SEIL Project 1 PLF worsened in Feb 19 despite Unit #1 resuming operations, while SEIL Project 2 showed yoy weakness. Dark spread is narrowing as India spot electricity prices are declining more than coal prices. Earnings are lowered 1-3% as a result. At the same time, balance sheet concerns for SMM have created an overhang. We lower our non-marine PE multiple and downgrade SCI to HOLD. Target price: S$2.80. Entry price: S$2.35.


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Wilmar International (WIL SP) : BUY

Building an Asia-Pacific consumer food empire


• Acquiring remaining 50% stake in Goodman Fielder Pty Limited

• Deal for US$180m cash; also acquiring existing shareholder loans for US$95m, with another US$50m payable by Wilmar subject to performance

• Wilmar continues to build its consumer food business

• Maintain BUY, TP S$3.60


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Singapore Equity Strategy

Headwinds Persist; Stick With Quality!


 Earnings downgrade continues after weak FY18 results.

Dairy Farm, Genting Singapore (GENS), and Golden Agri reported FY18 results that missed expectations, while Best World, Raffles Medical and Thai Beverage’s results beat. StarHub (+7%) and Thai Beverage (+6%) had highest earnings upgrades, while GENS (-7%) saw earnings downgrade. Earnings revisions for STI remained negative, with 2019’s consensus EPS downgraded by 2% in the last four weeks. Post results, we upgraded ComfortDelGro to BUY from Neutral and downgraded Ascendas REIT to NEUTRAL from Buy.


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