STOCKS WORTH

CONSIDERING IN 2017
EXCERPTS FROM VARIOUS RESEARCH HOUSES
 C ONTENT

Introduction............................................................................................................................04

CIMB Outlook:
3 Sectors To Focus On As We Enter An Uncertain 2017...........................................06

CIMB:
5 Small Caps You Cannot Ignore In 2017......................................................................09

CIMB:
4 Blue Chips You Might Want In Your Portfolio In 2017...........................................13

Credit Suisse:
3 Investment Themes You Need To Know In 2017.....................................................20

DBS:
4 Investment Themes Driving Asia In 2017...................................................................30

DBS:
Buy These 4 Defensive Asean Stocks For 2017...........................................................34

Deutsche Bank:
4 Things You Need To Know About Sg In 2017............................................................39

Deutsche Bank:
Buy These 5 Sg Stocks In 2017..........................................................................................43

MBKE 2017 Outlook:

2 Strategies To Counter A Mediocre 2017.....................................................................47

MBKE:
6 SG Stocks We Love In 2017............................................................................................50
 Disclaimer

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Introduction

2016 has been a year of unexpected events and

shock to say the least. Uncertainty and volatility will
continue to persist in the new year of 2017 as Donald
Trump officially takes over from Barack Obama as the
US President; the United Kingdom leaving the Euro-
pean Union to be independent; the other European
states fighting for their own referendum; and many
more to come.

While no one knows exactly what will happen in

2017, looking through the lens of various research
houses could give us some idea of how the global
economy and markets will fare.

We are committed in our mission to continuously

be of service to our readers, helping them make more
informed investment decisions by providing well-
researched and condensed data and information.
1 January 2017
This report features the various research houses
overall macroeconomic outlooks followed by stock
Shares Investment
ideas that weve picked out. Read on to find out more. Editorial Team

Shares Investment
Translation Team

subscribe@sharesinv.com

Visit Shares Investment for

more investment research
material at :
http://www.sharesinv.com
 CIMB OUTLOOK:
3 SECTORS TO FOCUS ON AS
WE ENTER AN UNCERTAIN 2017
2017 A Year of Unprecedented Uncertainty
2017 is an uncertain year to step into. We are not just referring to the investment out-
look, but world politics as well. 2017 will be filled with multiple elections in Europe (Germany,
France, and the Netherlands) and major decisions will be made throughout the year (think
of Trump, Brexit Article 50, Federal Reserve rate hike).

In other words, the foundations of many of the global political and economic models
have been shifting rapidly without us noticing.

2017 events to keep the global economy and equity markets on their toes
Brexit - 1) French Election
1) Trump takes office BOJ Meeting
Article 50 Dutch Election 2) BOJ Meeting
2) ECB Meeting
3) ECB Meeting
January February March April

US Fed Meeting 1) ECB Meeting 1) French Election

2) BOJ Meeting 2) US Fed Meeting
3) US Fed Meeting

August July June May

1) German Election 1) ECB Meeting OPEC Meeting

2) BOJ Meeting ECB Meeting
2) BOJ Meeting
3) US Fed Meeting 3) US Fed Meeting

September October November December

1) OPEC Meeting 1) ECB Meeting

ECB Meeting 1) BOJ Meeting Czech ECB Meeting 2) BOJ Meeting 2) BOJ Meeting
2) US Fed Meeting Election 3) US Fed Meeting 3) US Fed Meeting

Source: CIMB, Company Reports

But All Is Not Lost

There is still good news for Asia though. For Asian economies, the prospects of uncer-
tainty arising from increasing protectionism in developed markets and persistent financial
market volatility will encourage governments to adopt an expansionary fiscal stance to
support economic growth.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 05
 Spotting the Right Opportunities
CIMB believes that there are trading opportunities in the short term. Based on the his-
torical trough-to-peak assessment, CIMB opines that the market could enter a twilight zone
of risk-on mode from Dec 2016 to Mar 2017 to hit the 14-month window of low to high.

CIMB highlights two trading opportunities in 1Q17. The first opportunity is the support
of a continuous recovery in oil prices. The second opportunity is the first interest rate hike
by the Fed in 2017.

In the longer term, CIMB foresees opportunities to buy on dips after the market digests
4Q16s earnings disappointments and a glimpse of the first 100 days of Trumps presidency.

Investors Takeaway: Go Overweight on These Sectors

1. Property

According to CIMB, property stocks are trading at around 42 percent discount to reval-
ued net asset valuation (RNAV). This is below the -1 standard deviation to the mean discount.
While developers would continue to remain range bound as rising global uncertainties and
the prospect of higher interest rates take a toll on potential home owners, CIMB foresees
possible mergers and acquisitions (M&A) activities that could catalyse a re-rating. Moreover,

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 06
 property developers are deeply discounted and possess limited downside risk to investors.

2. Consumer Goods

Consumer companies have been affected by the weak global environment and macro
uncertainty. However, CIMB sees this as an opportunity to buy on dips. CIMB recommends
looking out for companies with high brand equity and depressed valuations as these com-
panies represent attractive targets for privatisation. A few privatisations took place in 2016
with the most prominent ones being Osim, Eu Yan Sang and Super. The privatisations also
signal that the secular Asian consumer trend is still very much alive.

3. Gaming

In light of headwinds from Chinas anti-corruption drive, Genting managed to shift its
business focus from VIP gaming segment to the mass and premium mass segment. As part
of its efforts, Genting is restructuring its business by removing redundancies, upgrading
its hotels and exhibits to cater to a wider audience, and introducing targeted events and
initiatives to draw in a new crowd. With Japans parliament agreeing to allow an integrated
resorts model to be built, optimism has already built up around Genting.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 07
 4. Avoid REITs

Following the rising of yields and steepening of curves, CIMB undertook a major re-rating
of the REITs sector by downgrading the REIT sector from overweight to underweight. CIMB
reckons that the hawkish stance from the Fed will put a cap on share price performance
and negatively affect distribution per unit (DPU) through higher refinancing costs.

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 08
 CIMB:
5 SMALL CAPS YOU CANNOT
IGNORE IN 2017
1. Auric Pacific

Auric is a diversified F&B company that manufactures and distributes fast-moving con-
sumer goods in Singapore and Malaysia. It has a number of well-established brands such
as Sunshine, SCS butter and Buttercup spread under its portfolio.

Auric currently trades at a heavy discount against bakery peers and general F&B players.
Not just that, Auric also has a much stronger balance sheet compared to its peers. Given
Aurics significant net cash (47 percent of its market cap) and minority shareholder interest
of only 23.28 percent, CIMB reckons that Auric is a proper privatisation target.

BUY, TP $1.96

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 09
 2. Best World

CIMB believes that FY17 is poised to be another record year for Best World as it con-
verts its distribution in China to its core direct selling model. The strong demand and low
selling price to distributors is set to propel the group to a new level of profitability. Best
World is set to enjoy a record year of profit in FY16 with net profit far exceeding previous
years profit in just nine months.

The stocks valuations are undemanding as well at just 10x forward Price-Earnings (PE)
ratio. This is below peers 16x forward PE and its historical peak band of 15-18x.

BUY, TP $2.21

3. CEI Limited
CEI Limited is a niche contract manufacturer that focuses on low volume, high mix
manufacturing. CEI derives around half of its revenue from the medtech/life science sector.
Many of CEI Limiteds key customers have been with the company for the past 10-20 years.
CIMB notes that CEI is gaining better traction with its customers. The continued strength
of US dollar has also helped drive CEIs revenue growth. CIMB recommends CEI as a proxy
for the growing medtech and life sciences industry in Singapore.

BUY, TP $1.04

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 10
 4. Cityneon

For those who do not know Cityneon, it is the parent company of the popular Marvel
Avengers and Hasbros Transformers exhibition. Cityneon owns the exclusive licensing
rights to both exhibitions till 2023 and 2024 respectively via Victory Hill Exhibitions (VHE).

VHE developed its first Avengers S.T.A.T.I.O.N set which was put on display in New
York for 15 months, before making stops in Seoul and Paris. Recently, it has stopped at
the Singapore Science Centre. Moving forward, Cityneon has announced two other exhibi-
tion locations (Taiwan and Australia) for 2017, as well as a two-year agreement for the first
Transformers set in China, with more anticipated in the pipeline.

Apart from the existing licensing rights, Cityneons management is keen to expand its
existing product range in the form of core intellectual properties. Success in expanding its
product range could push the stocks price higher.

BUY, TP $1.41

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 11
 5. Dutech

Dutech currently holds the market leader position in the niche safe manufacturing sec-
tor. As Asias largest safe manufacturer, Dutech fulfills over 50 percent of the safe demand
from Diebold and Wincor Nixdorf, the worlds second- and third-largest ATM manufactur-
ers. This translates to an estimate of around a 20- to 25-percent share of the global ATM
safe market for Dutech.

Despite being the market leader, Dutech continues to sharpen its competitive edge in
the high-end global safe market via continued investment in Research and Development
(R&D). Its R&D efforts have paid off as Dutech is now one of the few Asian safe makers today
with UL and CEN certificates, which are often considered key criteria in global customers
selection of suppliers.

BUY, TP $0.65

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 12
 CIMB:
4 BLUE CHIPS YOU MIGHT WANT IN
YOUR PORTFOLIO IN 2017
1. Dairy Farm
2015 was a challenging year for Dairy Farm as it expanded too aggressively in a low
demand environment. But in 2016, Dairy Farm has undertaken the painful task of rational-
ising its stores and driving productivity. CIMB feels that Dairy Farms margins will recover
having closed the underperforming stores of 2015.

Dairy Farm also implemented a slew of initiatives to improve its core food business:
(1) higher range of fresh produce, (2) increased private label offerings, and (3) increased
direct sourcing. CIMB reckons that Dairy Farm will start to see fruits of its efforts in 2H16.
As such, 2017 will be a good year for investors to harvest the fruits.

BUY, TP $8.70

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 13
 2. First Resources
Among regional crude palm plantation companies, CIMB favours First Resources for its
young estate profile (average 10 years). CIMB believes that this bodes well for its output
growth prospects, as yields from young estates improve.

First Resources currently owns 850k tonnes of refining capacity. CIMB believes that
this will allow First Resources to refine in-house CPO to extract better profit margins for
its palm products. Furthermore, its biodiesel plant also stands to benefit from the higher
demand in the country following the Indonesian governments move to raise its biodiesel
mandates to a 20-percent blend in 2016.

BUY, TP $2.32

3. ST Engineering

With 25 percent of its revenue based in the US, CIMB opines that increased spend-
ing within the US and better economic outlook could benefit ST Engineering. There will
be greater spending on marine, land systems (road construction vehicles and beverages
trucks) and aerospace (stronger US airlines profit improves willingness to incur aircraft
maintenance expenses).

ST Engineering also stands to benefit from multiple positive secular structural trends
such as urbanisation, smart cities development, and increasing demand for data connec-
tivity and security (e.g. physical surveillance, cyber and cloud).

CIMB expects stronger-than-expected orders and divestment of loss-making non-core

businesses to act as key catalysts for ST Engineering.

BUY, TP $3.75

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 14
 4. Venture Corp
Heading into 2017, CIMB
forecasts that Ventures profit
growth will outpace revenue
growth as Venture focuses
on servicing customers with
higher profit margins. CIMB
is confident that Venture will
continue to reap the benefits
of its past engagements with
customers who value its abil-
ity to to innovate and improve
their products. With better
earnings and stronger free
cash flow, Venture could sur-
prise analysts expectations of
$0.50 in dividends per share.
Moreover, given the weak eco-
nomic outlook, CIMB foresees
accretive M&A opportunities
for Venture in FY17 that could
spark interest in the stock.

BUY, TP $10.94

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 15
 CREDIT SUISSE:
3 SECULAR INVESTMENT THEMES
FOR 2017
2016 was a turbulent year. Fears of a rate hike cycle, slowdown in growth leader China
and falling oil prices sent shock to the markets. The losses were subsequently offset by a
rally on the back of improving U.S. economic data and new stimulus measures in China. In
addition, not one, but two black swan events with the potential of catalysing a crash in the
stock market. Yet, the market recovered and the bull run continued.

As we head into 2017, we highlight three investment themes from Credit Suisse with
good growth potential that investors can find investment ideas worth investing in. These
investment themes are secular investment themes driven by fundamental changes in the
society.

Theme 1: Ageing in Emerging Markets

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 16
 According to CS (and logically), almost every country globally is seeing an increase in
the proportion of older people as a percentage of their total population given improved
longevity, the post-war baby boom and declining fertility rates. CS observed that emerg-
ing markets (EMs) population proportion is ageing much quicker than developed markets
(DMs). As EMs population age, there are a lot of opportunities for life insurers to increase
their businesses to help these ageing population meet with the rising need for medical and
life insurance.

Chinas Insurance Market Still Under-Penetrated

In particular, CS highlights Chinas life insurance sector as a focal area of investment

to tap on to this demographic theme of ageing. This is because China remains the most
under-insured country in Asia in terms of life insurance.

Investors Takeaway: AIA Group, Ping An, Fresenius Medical Care and Straumann

Theme 2: Internet Of (Every)Thing

Online Is Still Not As Proliferated

Despite the growth seen to date in internet usage and online transactions, the market for
E-Commerce remains very much in the early phases of development. CS believes strongly
in the structural revenue growth outlook for internet, especially E-Commerce, globally.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 17
 Since 2011 the online retail markets in India, Indonesia and Mexico have expanded
by 7.5x, 6x and 2.5x, respectively. But looking at the share of retail transactions executed
online (rather than offline), the figure remains at just about seven percent globally. This
means that there is still much more room for e-commerce to growth.

Younger Generation Will Drive Growth

Unsurprisingly, the popularity of online retail is greatest among younger people. Based
on data for Europe and the US, internet users aged below 45 are much more likely to pur-
chase online than those over 45. In the US, millennials are now the largest section of the
population. As demographics continue to shift, online will soon take over offline as the
main mode of transaction.

Investors Takeaway: Alphabet, Facebook, VISA, Alibaba

Theme 3: BIG Data, AI

Increasing Reliance On Big Data And Analytics

As companies become more aware of how important data will help in their everyday
operations, the reliance on big data will grow.

Data quality is fundamental to the value of Big Data-derived insights. According to Erics-

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 18
 sons widely-cited 2010 forecast, there would be 50 billion connected IoT devices by 2020.
The increasing adoption of distributed ledger technologies (i.e. Blockchain) also offers the
potential to fuel Big Data by offering more accurate data in a shorter span of time. With
better quality data, insights derived from these data will be much more beneficial to com-
panies, thus motivating companies to adopt analytics function.

Neural Network Computing (AI)

Technology companies like IBM are coming up with faster-than-expected advances in

cognitive computing. The advancement in cognitive computing are positive for Big Data
analytics as it allows the combination of brute computing force and innovative neural net-
works.

Computational power will continue to improve rapidly to open up the possibility of new
areas of pattern recognition and predictive analytics to drive further usage of big data. Not
only big data, the development of neural network computing will also quicken the adoption
of AI in companies operations.

Investors Takeaway: Hon Hai Precision, SAP, BroadCom, Baidu, Wangsu Science

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 19
 CREDIT SUISSE:
THEME 1: AGEING IN EMERGING
MARKETS - 3 STOCKS TO CONSIDER

Sub-Theme 1:
Chinas Insurance Market Still Under-Penetrated

The UN forecasts that the total world population aged 60+ will increase by 56 percent
between 2015 and 2030, from 900 million to 1.4 billion. The majority of this increase will
come from EMs, with around a third from China alone. The Chinese insurance market is
forecasted to grow at 15 percent per annum over the next decade supported by the Chinas
five-year plan, deferred tax pension and tax breaks for health insurance.

Ping An Insurance
An ageing population implies that the demand for pension schemes will increase as the
population prepares for life after retirement. The Chinese government have also pushed

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 20
 out plans to promote purchase of pension schemes to supplement state-funded basic so-
cial insurance scheme and corporate annuities through its national tax-deferred pension
insurance guidance.

Largest Market Share

Among the Chinese insurers, Ping An has the largest market share with 43 percent
market share by premiums in 1H16. With demand for pension schemes taking flight, Ping
An should benefit the most from the governments promotion of pension products.

In terms of valuation, Ping An is trading at 0.9x P/EV, which is not a demanding valua-
tion. Furthermore, the stock is trading at one standard deviation below historical average
of P/EV despite robust Value of New Business (VNB) growth.

BUY, TP HK49

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 21
 Sub-Theme 2:
Better (And More) Healthcare Needs From Ageing Population
As EMs experience the same demographic shifts towards an elderly population with a
more Western lifestyle, demand for healthcare needs will also grow. Another beneficiary
of the ageing population in EMs will be the healthcare sector.

Fresenius Medical Care

Rising ERSD Incidence Rates In EMs

Due to a more Western diet, combined with ageing effects, incidence rates of ERSD will
increase substantially in EMs. The ESRD incidence rate in Asia is likely to develop in favour
of healthcare companies like Fresenius in the long run. End Stage Renal Disease (ESRD)
requires patients to go for regular dialysis treatment to keep their ESRD under control.
Fresenius Medical Care (FME) has predominantly been strong in the US dialysis market.

Low Market Share Signifies Growth Opportunities In EMs

However, FMEs presence in the EMs leaves much to be desired. Asia represents around

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 22
 43 percent of total dialysis patients globally. Yet, FMEs market share in Asia is only around
two percent. This is way below its market share in Europe/Middle East and Latin America.

This means that FME has the potential to accelerate its growth by tapping into emerg-
ing markets, particularly in Asia. Its management projects sales to increase at around ten
percent CAGR from 2013-2020. CS estimates that 15 percent of this growth will come from
Asia in the next four years.

Attractive Valuation-To-Growth

FME is a stock that holds value for investors attributable to its defensive growth qualities
and relatively attractive valuation-to-growth profile among larger names in the European
Healthcare sector. Given its current price, the stock is priced at a good entry point for a
longer horizon investment heading into 2017.

BUY, TP 90

Straumann
Another area
that will be driven
by increasingly age-
ing population in
EMs is the dental
implant market. The
dental implant mar-
ket is expected to
grow much quicker
in EMs than DMs.

Strong Position To Capture Market Share In EMs

With operations in China, India, Russia, Latin America and other EMs, Straumann is well
positioned to gain maximum market share from EMs through its enhanced value segment
portfolio, local subsidiaries and direct sales lines to cater to local needs. Furthermore, with
substantial net cash on its balance sheet, Straumann has the finances to acquire subsidiar-
ies for inorganic growth.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 23
 Theme 2: Internet Of Everything - 3 Stocks To Consider
Alibaba
Alibaba is the largest online and mobile commerce company in the world with its total
trading volume online in the latest fiscal year surpassing Walmarts annual sales. Alibaba is
not just an e-commerce only company but it operates an ecosystem that serves as a plat-
form for third-party merchants. Over the past few years, Alibaba has made a dozen satellite
investments in online-to-offline (O2O) retail and services, media and entertainment, and
frontier technologies.

Alibaba Is Synonymous With Growth

Alibabas sustained gross merchandise volume (GMV) growth and a monetisation rate
improvement for the core e-commerce business is undeniable. Moving forward, should
there be a breakthrough in new categories such as grocery and food or an upside surprise
from Lazada and Youku (Chinas equivalent of YouTube and Dailymotion), it could catalyse
a revaluation of Alibaba.

Earnings Visibility From Core Assets

Alibabas forward
earnings is also gradually
more visible with four key
growth assets in Ant Fi-
nancial (internet finance),
Cloud (cloud computing),
Cainiao (smart logistics)
and Koubei (O2O ser-
vices). Its satellite invest-
ments could also unlock
future value in O2O retail
& services, media & en-
tertainment, and frontier
internet technologies to
give Alibabas earnings potential upside.

BUY, TP US$125

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 24
 Alphabet
For many, the company is known as Google. But for the purists, the name is Alphabet.
The continuing shift of consumer engagement towards mobile platforms and the migration
of advertising spending online will continue to drive revenue for Alphabet.

Online Ad Business Evolving

Alphabet have highlighted several new products that can help them maintain website
growth momentum. This includes (1) expanded text ads, (2) individual bid adjustments,
and (3) wide deployment of the fourth sponsored link on desktop.

On top of its core business, a higher than-expected contribution from Googles larger
non-search businesses (i.e. YouTube and Google Play) and any upward bias to estimates and
shareholder value creation from Alphabets Side Bets will further drive Alphabets share price.

Scepticism Creates Buying Opportunity

Credit Suisse believes that recent concerns about tougher comparisons and the poten-
tial for multiple compression starting in 3Q16 have weighed on Alphabets share price and
created a buying opportunity.

BUY, TP US$1070

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 25
 Facebook
Similar to Alphabet, Facebook is another beneficiary of the shift of consumer engage-
ment towards mobile platforms and the migration of advertising spending online.

Monetisation Potential Underestimated

Despite concerns about the number of ads that Facebook can display without affect-
ing user experience, Credit Suisse remains confident that Facebook will be able to drive
revenue growth without a material lift in ad loads. Among the industry, analysts are being
too conservative on Facebooks valuation and underestimates the long-term monetisation
potential of upcoming new products like WhatsApp and Messenger.

New Ad Tools For Retailers

There are healthy demand indications among advertisers for Facebooks new Dynamic
Ads for Retail, which facilitates the connection of in-store merchandise with nearby users.
The Dynamic Ads for Retail contribute significantly from 4Q16 onwards. Moreover, recent
feedback from advertisers suggests that the company continues to innovate on product
development. There could be an arrival of a new prospecting tool to help retailers find new

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 26
 customers, as well as the initial steps to start monetising Messenger in 2017.

BUY, TP$170

Theme 3: Big Data, Ai - 3 Stocks To Consider

The amplifying cycle of data creation, data storage, data transmission and data analytics
will continue to drive growth to companies exposed to big data and artificial intelligence.
This growth is unlikely to slow as appetite from corporates for greater operational efficiency
through data interpretation will only increase in an increasingly globalised world. The in-
creasing variety of data is also another driving factor behind this theme.

BroadCom
The DataCenter Ethernet Switch mar-
ket is expected to record a 12-percent
CAGR, driven mainly by Cloud/DataCenter
expansion. Broadcoms wired infrastruc-
ture gives it a good exposure to the secu-
lar trend in big data as wired infrastruc-
ture is directly levered to Cloud and Data
Center growth. With AAPL and Samsung
recording content gains of more than 20
percent per annum and M&A synergies
more than the US$750 million outlined
by the management, Broadcom leads Credit Suisse recommendation for 2017.

BUY, TP US$200

SAP
SAP is engaged in enterprise applications in terms of software & related service revenue.
Its core business is selling licenses for software solutions & related services to deliver a
range of choices fitting the varying functional needs of its customers.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 27
 SAP HANA, A Game Changer

In the big data era and era of disruption, SAP introduced SAP HANA (High-Performance
Analytic Appliance) that is viewed as the cornerstone of the companys in-memory strategy.
Credit Suisse recognises that SAP HANA is one of the most disruptive product to database
market share since SQL Servers emergence in the 1990s. It is a preconfigured hardware
appliance with pre-installed SAP software.

Migration Of Legacy IT Systems

Cloud will be a key driver behind a multi-year wave of application modernisation. Ap-
plication modernisation is the refactoring, re-purposing or consolidation of legacy software
programming to align it more closely with current business needs. SAPs new cloud initia-
tives will benefit them in this shift towards modernisation as companies migrate away from
its legacy IT infrastructure and system.

BUY, TP 90

Wangsu Science
The increasing demand for big data will most certainly drive the growth for high-volume
and high-variety of information and processing. This increasing data traffic will be beneficial for
its Content Delivery Network (CDN) business, which makes up 87 percent of Wangsu Science
revenue. CDN is a distributednetworkof proxy servers deployed in multiple data centers. The
goal of aCDNis to servecontentto end-users with high availability and high performance.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 28
 Top CDN Vendor In Growing CDN Market

The CDN market in China is expected to grow at a 34-percent CAGR up to 2020. Wangsu
will benefit from the strong growth in its core CDN business as the top professional CDN
vendor in China. Wangsus competitive advantage in higher operating efficiency, content
operation experience in non-standard business, leading CDN technology and independent
third-party positioning will give it an edge over its peers and new entrants.

IoT Another Secular Trend In The Making

Other than Big Data, Wangsus strong long-term growth prospects is also driven by the
proliferated use of IoT in the near future. Credit Suisse recommends Wangsu as a long-
term investment given its strong 46-percent growth and an average ROE of 25 percent for
2016-18E, which is way ahead of its peers.

BUY, TP RMB 79.30

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 29
 DBS:
4 INVESTMENT THEMES DRIVING
ASIA IN 2017
Handful Of Black Swans In 2016
2016 was unlike any other years we had. 2016 produced not just one black swan event,
but a handful of them, from the Brexit saga to Trumps unlikely victory and the unexpected
post-election rally that no one anticipated. The new Trump era is now perceived by inves-
tors as a pro-growth, equity friendly political environment that will support further growth
in the US economy.

Poor US-Asia Relationship Wont Hurt Asias Growth

On the other hand, Asia is heading into uncertain times as we approach 2017, given
the poor US-Asia relationship portrayed by Trump in his campaign. One only has to look at
how the Trans-Pacific Partnership (TPP) died to know that this isnt one of the rosiest period
for US-Asia relationship.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 30
 However, DBS is confident that growth among Asian economies will remain intact as
a whole. DBS believes that four investment themes will continue to thrive in Asia in 2017.

Four Investment Themes For Asia In 2017

1. US Cyclical Expansion To Drive Asian Exports

While Trump has shown strong desire to bring manufacturing jobs back into the US,
Asia is still undoubtedly the best place for manufacturing in the world. Asias manufactur-
ing and cost efficiency is still superior to US. A weak currency and global recovery scenario
should continue to benefit exporters in Asia.

The Trump administration is also contemplating tax cuts for individuals and businesses.
These tax cuts have the potential have a positive impact on US consumers discretionary
spending, which will in turn benefit Asian exporters.

2. Global Fiscal Expansion

Trumps plans to push ahead with fiscal stimulus by raising national debt to provide
federal funding for infrastructure is no secret. And Trump is definitely not alone. Outside
of the US, world leaders are coming to a consensus that monetary policies have limited
effectiveness in stimulating their ailing economies.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 31
 Following years of fiscal contraction, developed nations are now turning towards fiscal
stimulus to improve fundamental factors of their economies, i.e. driving demand and sup-
ply factors in developed economies. DBS expects greater global fiscal expansion to benefit
steel, mining, cement, construction and engineering firms prices in 2017.

3. Valuation re-rating of US valuations

US vs Asia Sectors 2017 Valuation And Growth Comparisons

2017 PE (x) 2017 Gro (%)

Sector ASEAN China HK US ASEAN China HK US
Cons. Discr. 19.3 18.0 21.5 18.9 17.4 29.9 8.3 9.1
Cons. Staples 21.3 19.9 11.3 19.0 12.9 13.0 11.5 7.3
Energy 13.2 14.7 32.1 13.7 174.3 403.0
Financials 11.2 6.7 18.1 13.5 7.6 4.4 11.2 10.3
Banks 10.9 5.4 14.0 13.0 7.7 2.1 9.9 7.1
Real Estate 14.5 6.4 12.8 36.3 7.5 16.8 1.3 -21.4
Healthcare 35.9 16.9 12.5 14.6 17.3 16.7 9.2 8.8
Industrials 16.7 10.0 17.8 18.4 5.8 13.1 21.9 5.1
IT 14.7 24.0 16.8 13.1 29.2 11.7
Materials 13.3 14.1 16.7 6.4 23.0 13.8
Telcos 17.1 13.5 15.0 13.8 8.3 10.9 7.8 4.3
Utilities 12.2 10.1 17.7 16.4 0.7 1.3 2.3 0.9
Market 14.3 11.6 15.4 17.1 8.1 15.1 6.5 11.8
Source: Datastream, IBES, DBS Bank. Shaded ones are sectors with cheaper valuation and stronger growth compared
to the US

Historically, Asian markets have had a strong correlation with the US markets. Yet,
valuations of Asian markets continue to trade at cheaper valuations compared to the US.
DBS believes that investors can focus on sectors which have potential to be re-evaluated,
e.g. Banks, Energy, Real Estate, Consumer Staples, Material and the Utilities sectors. These
sectors are all trading cheaper than their respective US peers.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 32
 4. ASEAN Domestic Demand Is The Safe Bet

From a macro perspective, 2017 is hardly a year to be excited about. While a moderate
recovery can be expected, US rates, currencies, and inflation outlooks will add uncertainty
for any investment plans. As such, DBS recommends focusing on defensive sectors that
have higher visibility on its 2017 outlook, i.e. ASEAN consumer sector. DBS highlights that
domestic government investments and private consumption will continue to be supportive
of growth in Asia.

Investors Takeaway:
ASEAN Consumer Stocks, Asia/US Valuation Laggards
While Asia no longer has the luxury of the TPP deal to act as a catalyst for investor in-
terest in the region, DBS believes that there is still a number of investment opportunities
for investors in the Asian universe. Based on the four investment themes, DBS suggests
that investors focus on beneficiaries of US recovery and global infrastructure spending
through Asia/US valuation laggards and ASEAN consumer stocks (Thaibev, CPALL, Sheng
Siong, Robinson Retail).

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 33
 DBS:
BUY THESE 4 DEFENSIVE ASEAN
STOCKS FOR 2017
Following DBS four investment themes that will drive Asia In 2017, we take a closer
look at four investment ideas that DBS recommends based on its four investment themes.

1. Indofood: Undervalued Consumer Play

Indofood (INDF) is the largest instant noodle and wheat flour manufacturer in Indone-
sia. For many Indonesians, noodles are a cheap substitute to rice. Even in a slow economy,
INDFs noodle sales are relatively resilient. In 3Q16, INDFs Consumer Branded Products
(CBP) segment recorded an improvement in volume growth across all segments, indicating
an improving demand environment.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 34
 Deep Discount To SOTP

INDFs shares have been trading at a deep discount to its sum-of-the-parts (SOTP) valu-
ation in the past three years. The company now trades at a 26-percent discount to its SOTP
valuation, compared to an average discount of 14 percent in the past five years.

Divestment From China Minzhong

DBS opines that this is largely due to the companys venture into the cultivation business
through the acquisition of China Minzhong Food Corporation in 2013. INDF is currently in
the midst of divesting its majority ownership in China Minzhong to Marvellous Glory Hold-
ings. INDF and First Pacific have already gained approval from independent shareholders.
The divestment will conclude before 2017.

DBS believes that this will catalyse a revaluation of INDF share price that will narrow
INDFs current discount to SOTP valuation.

BUY, TP IDR 9,900

2. ThaiBev: Regional Player In The Making

ThaiBev is currently in a transformational stage as it morphs into a regional player. This
transition and uncertainty surrounding the mourning period in Thailand has been encour-
aging investors to divest from ThaiBev in recent months.

Deep Discount To SOTP

ThaiBev has strong financials to drive earnings accretion through inorganic growth. Ac-
cording to DBS, ThaiBev and F&N has sufficient financial strength to undertake acquisitions
to the value of $4 billion.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 35
 Current shareholdings in FCL and FNN

Source: Company, DBS Bank

Looking To Take Stakes In Vietnam Beverage Companies

There has been increasing talks of ThaiBev looking to take potential stakes in Vinamilk
and Saigon Beer Company in Vietnam. Should ThaiBev succeed in taking stakes in Vinamilk
and Saigon Beer, it will further underpin their ambition to become a regional player.

Overall, DBS believes that ThaiBev remains an attractive stock to invest in as it trans-
forms into a regional player.

BUY, TP $1.19

3. Robinsons: Fundamentals Intact Despite Recent Sell-Off

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 36
 Robinsons Retail Holdings (RRHI) has closed down a significant number of nonperform-
ing stores, which had an adverse impact on the companys margins. This contributed to
the recent sell-off in RRHIs share price. Despite the recent sell-off in RRHIs share price,
DBS is confident of the companys strong fundamentals and improving earnings profile in
FY17F/FY18F.

Tailwind From External Factors

According to DBS, RRHIs growth prospects remain bright. Growth is underpinned by

positive industry data: favourable demographics, rising disposable income, low inflation
backdrop, and underpenetrated modern retail industry.

DBS also expects same-store-sales-growth (SSSGs) to normalise in the upcoming quarter

as the effects of election-related spending wears off. Rising household disposable income,
low inflation backdrop and robust economic/construction activity will continue to support
RRHIs growth prospects.

BUY, TP PHP 92

4. CPALL: Higher Growth And Margin In 2017

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 37
 CPALLs outlook in 2017 is driven by two major shifts in consumer trends: cautious
spending and shift towards convenience.

Trend 1: Cautious Spending Among Thais

Amid weak consumption pressure, Thai consumers are spending on smaller-ticket

items and making more frequent trips to convenience stores and mini-supermarkets.
With convenience stores and mini-supermarkets forming the bulk of CPALLs operations,
DBS expects CPALLs SSSG to outperform other retailers. Furthermore, CPALLs attractive
products and sales promotion and favourable position as the leader in the convenient
store market allows it to benefit from potential government stimulus packages and public
infrastructure spending.

Trend 2: Shift Towards Convenience

There is another underlying shift in consumer trend among the Thais, i.e. one that is
towards convenience. Given the tilt towards convenience, DBS foresees strong growth in
ready-to-eat food, health and beauty products, and drinks at its cafe corner. CPALL should
expect to yield relatively higher margins in the upcoming year from these higher margin
products.

BUY, TP THB 75

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 38
 DEUTSCHE BANK:
4 THINGS YOU NEED TO KNOW
ABOUT SG IN 2017
In DBs recent outlook for Singapore in 2017, DB warns of a challenging year for Singa-
pore in the upcoming year. This is because, fundamentally, Singapore remains a very chal-
lenging market in the near-term with many structural issues. The uncertainty from global
economies also suggests a fairly volatile trading year ahead. DB predicts that 2017 will be
a more volatile year than the past few years.

In this article, we highlight the four things you need to know about the Singapore mar-
ket in 2017:

1. Headwinds In Transition Year 2017

2017 will not be a year of much growth, but rather a transition year for Singapore. 2017
will be a stepping stone year for Singapore to transit towards the goal of Smart Nation.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 39
 Despite a multitude of external headwinds, DB forecasts that Singapore is on a path of mild
recovery through the medium-term.

2. Cyclical Sector Worries Will Ease

DB expects Singapore to reach a cyclical bottom in 2017 on expected improvement in

external demand and pro-growth policies. In particular, DB expects the two cyclical sectors
- real estate and O&M - to bottom out in 2017. There is much hope that stability will return
to the O&M sector following the recent deal within OPEC and the introduction of support
measure by International Enterprise (IE) Singapore. As worries over cyclical sectors ease, it
will also ease worries of non-performing loans (NPLs) among the three local banks.

3. Two Key Investment Focus: Restructuring, Rebuilding

To put simply, 2017 will be a challenging year for Singapore. However, the good news
is that the Singapore government has been proactively building towards the future.

Unlike previous years, restructuring and rebuilding Singapore Inc will be the key invest-
ment focus for Singapore in 2017. This will be similar to the last turning point in early 2000

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 40
 when Singapore saw a prolonged contraction in the economy and faced structural chal-
lenges to its pillar industries. The episode forced Singapores Economic Review Committee
to propose appropriate strategies to promote growth and development of the Singapore
economy.

Rebuilding Singapore Inc.

In terms of rebuilding, the spotlight will be on Singapore Inc. that were once leaders
of their respective sectors. The last time such effort was undertaken was in 2000 after the
Asian financial crisis. Building Singapore Inc was carried out in that period to foster scale
and create Singapore Champions.

Singapore Inc. has lagged behind due to technology disruptions and intensified competi-
tion from regional players. DB thinks that Singapore Inc. will have to undergo its next phase
of technology and productivity rebuilding in order to regain its position as market leaders.

Restructuring Singapores Economy

The other area of focus is economic restructuring. Technology and innovation will be
at the forefront of this economic restructuring. In January 2016, Singapore held its first
Committee on the Future Economy (CFE) to position Singapore for the future and identify
areas of growth regarding regional and global developments.

Most recently, the government has sought to make Singapore a leader in FinTech. The
Singapore government has established the FinTech Innovation Lab, and regulatory sand-
box for FinTech experiments and solutions, whereby innovative solutions can be offered
to the public under relaxed regulatory requirements for a limited period of time.

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 41
 Overall, there will be an investment focus on companies that are able to evolve them-
selves into the Smart Nations eco-system. These stocks will be in a better position to out-
perform in 2017.

4. Yield Falling Out Of Favour

Yield stocks have gone from being the love of the market to the fear of the market as
markets embrace for an accelerated pace of inflation. However, DB reiterates that the fun-
damental outlook for strong yield stocks have hardly changed. Thus, DB sees opportunity
for yield plays as the likely volatility in the year ahead and stability of some yield names
would attract institutional investors back to safe haven yield plays.

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 42
 DEUTSCHE BANK:
BUY THESE 5 SG STOCKS IN 2017
In our previous article, we highlighted some of the key developments in the Singapore
market for 2017. In this article, we focus attention on five stocks that will benefit from the
key developments in the Singapore market for 2017.

1. Singtel: Focus On Smart Nation And Cyber Security

The two key themes for Singtel in 2017 are
Smart Nation and Cyber-security.

The Smart Nation is a whole-of-nation IoT

project spearheaded by the government with a
focus on mobility, healthcare and citizen services.
As a key partner of the government in its Smart
Nation effort, Singtel will be a major beneficiary.
In particular, Singtels enterprise division will

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 43
 benefit from the infrastructure build-out and associated services of the Smart Nation pro-
gramme. Its enterprise division has a 35-percent contribution to core earnings.

SingTel is also rapidly building upon its cyber security capabilities with its 2015 acquisi-
tion of cyber security company Trustwave for $1 billion.

In addition, the potential IPO of NetLink Trust would provide an opportunity for a one-
time special dividend for shareholders.

BUY, TP $4.45

2. SingPost: Riding With Alibaba

SingPosts re-focus on integration is deemed as a positive management move by DB as

it expects the integration of SingPosts past acquisitions to drive revenue at a CAGR of 20
percent over FY16-19E.

Alibabas recent investment to increase its stake in SingPost and Quantium Solutions to
14.5 percent and 34 percent respectively also bodes well for SingPost. Given that Alibabas
continued expansion into Asia-Pacific (APAC) with various acquisitions, SingPost would be
the ultimate beneficiary from Alibabas China-APAC trade flows.

BUY, TP $1.85

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 44
 3. SATS: Tourism Rebound Boon For SATS
SATS has a dominant position in the aviation and food solutions business in Singapore
with an 80-percent market share at Changi Airport. Its long term attractive business growth
is well-supported by strong Chinese inbound tourism to Singapore, and capacity expan-
sion of Changi Airport (terminal 4 and 5). DB expects Chinese inbound tourism to register
a CAGR of 18 percent over 2015-2020E, which will indirectly drive overall growth of revenue
for SATS.

On top of macro factors, SATS also possess solid fundamentals. SATS has a net cash
position in the balance sheet and generates a stable four to five percent Free Cashflow
yield. This financial strength gives SATS the flexibility to make value-accretive acquisitions
or increase dividend payouts to shareholders.

BUY, TP $5.79

4. CapitaLand: Increasing Efficiency; Attractive Valuation

As one of the leaders of Singapore Inc., DB believes that CapitaLand will remain focused
on improving its ROE in 2017. This will be done through existing initiatives including cost

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 45
 reduction and project completion cycles. New initiatives including optimising its capital
structure and becoming more asset light could be alternatives.

On top of that, CapitaLand could be a likely first-mover on any potential restructuring

and increasing dividend payout. DB is confident CapitaLands likely strong earnings growth
in the medium term and its current undemanding valuation will enable CapitaLand to out-
perform in 2017.

BUY, TP $4.05

5. DBS: Rate Hike Beneficiary

Among local banks, DBS has the highest developed market exposure (SG and HK at
64 percent of loans). Now the the Fed has raised rates, DBS is in prime position to benefit
from the best CASA franchise among the three banks at 62 percent, providing an additional
leverage to take advantage of rising rates.

Aside from the potential uplift in net interest margin (NIM), the strength of its wealth
management franchise will continue to propel its earnings growth, boosted by the tie-up
with Manulife bancassurance agreement.

BUY, TP $18.50

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 46
 MBKE 2017 OUTLOOK:
2 STRATEGIES TO COUNTER A
MEDIOCRE 2017
Amidst the festive cheers, investors have to be prepared for a tough 2017, warns MBKE.
Against the backdrop of tepid global growth, near-term fundamental growth challenges to
key financial services, property and energy-related sectors, Singapores forecasted growth
for 2017 has been reduced to a range of just one to three percent.

MBKE: Economic Growth, Index Valuation,

Earnings Recovery, Political Factors
To gauge an economys outlook, MBKE considers four important factors: economic
growth, index valuations, earnings recovery expectations and political factors. According to
MBKE, these four factors point to a mediocre year for Singapore in 2017. Economic growth
will continue to be sluggish while index valuations remain uncompelling. Earnings recovery

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 47
 expectations are also weak with downside risk.

Politically, there are rising risks of protectionism in the west and possible cooling-off
in China relations following the recent seizure of Singapores military vehicles en-route
Hong Kong. Central banks in the region are taking measures to restrict capital flight. MBKE
opines that this could have a bearing in the medium term for Singapore housing sales to
foreigners, tourism and direct investment. As such, Singapore stands to lose the most as
an open economy.

SG Consumers Pessimism Reflects Mediocre Year Ahead

Various consumer confidence monitors also suggests that Singapores consumers are
increasingly tightening their consumption. Referencing the Mastercard Index of Consumer
Confidence, MBKE reasoned that the outlook for consumer spending remains Pessimistic
with a Significant Deterioration. The study also indicated that Singapore ranked second-
lowest on the Index in the Asia-Pacific region in terms of overall consumer confidence.

STI Valuations Deceptively Cheap

While STI trailing PE valuations look attractive relative to both its three-year and five-year

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 48
 FSSTI Trailing P/E (3 year) FSSTI Trailing P/B (3 year)
x PE PE mean x PB PB mean
PE + 1sd PE - 1sd 1.5 PB + 1sd PB - 1sd 3,700
17 3,700 Index (RHS)
Index (RHS)
1.4 3,500
16 3,500

15 3,300 1.3 3,300

14 3,100 1.2 3,100

13 2,900 1.1 2,900

12 2,700 1.0 2,700

11 2,500 0.9 2,500

Dec-13

Jun-14

Dec-14

Jun-15

Dec-15

Jun-16

Dec-16

Dec-13

Jun-14

Dec-14

Jun-15

Dec-15

Jun-16

Dec-16
Source: Maybank Kim Eng, Bloomberg Source: Maybank Kim Eng, Bloomberg

historical data, MBKE thinks that this is largely due to the de-rating of the financial sector.
Excluding the financial sector, STI valuation appears to be moderately rich.

But STI Is Still A Good Dividend Play

That being said, STI stands out as one of the highest dividend-yielding indices in ASEAN.
This is partly attributable to STIs REITs components and proactive payout policies. On top
of that, a number of corporates have also linked management KPI to various balance sheet
capital efficiency measures, prompting these corporates to increase their dividend payouts.

Investors Takeaway: 2 Investment Strategies For 2017

With a one-year investment time frame in mind, MBKE prefers steady, relatively high
cash flow resilience sectors, especially stocks with low or declining CAPEX requirements
and ones that benefit from secular growth trends. MBKE believes that investors should be
overweighting Property REITS and Healthcare stocks.

Another strategy that MBKE recommends is a bottom-up strategy with a focus on com-
panies with a strong business model in sectors that are driven by secular growth. MBKE high-
lights that stocks with (1) low earnings cyclicality, (2) cashflow stability and low balance sheet
risk within a preference framework of secular growth drivers and (3) business models with
demonstrated track record will provide potential upside for investors in a year of uncertainty.

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 49
 MBKE:
6 SG STOCKS WE LOVE IN 2017
1. Jumbo
Jumbo is one of MBKEs top recommendation for its combination of a resilient home
base and successful overseas thrust that should provide catalysts to outperform. Its focus
on seafood with a wide clientele appeal and strong branding among local and foreign food
lovers make it the default choice for premium seafood delicacies.

Jumbos core Singapore market provides stable incremental growth while overseas
markets (China for now, but could include Thailand in the future) are expected to provide
higher growth quantum in coming years. Best of all, valuations have not yet priced in the
expected catalysts.

BUY, TP $0.78

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 50
 2. Ezion
Among the O&M sector, Ezion is one of the relatively more resilient stocks. Ezions
exposure to production and maintenance services allows them to keep most of its assets
utilised and to generate free cashflows from FY16-18E. Ezion has a high chance of surviving
the current downturn as it has no immediate balance sheet risks. Ezions five new assets
scheduled for contribution in 1H17 could serve as a near-term stock catalyst to drive earn-
ings per share (EPS) growth.

BUY, TP $0.42

3. Bumitama Agri
Having planted an average of ~9,000 hectares (ha) of nucleus area per annum over the
past 10 years, Bumitama Agri is one of the fastest-growing plantation companies. Bumitama
Agri now has a sizeable nucleus planted area of 120,000 ha of relatively young oil palm trees.

With an average age of around eight years old, Bumitama Agri is expected to grow its
fresh fruit bunches (FFB) output at a 10-percent CAGR over 2015-18. Moving forward, MBKE
expects FFB yields to normalise and grow sharply by 25 percent.

BUY, TP $0.97

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 51
 4. UOL
In a tough operating environment for property developers, UOL remains as one of the
worthy developers to invest in, according to MBKE. UOL has the highest share of recurring
income base amongst local developers with a conservative residential portfolio with high
pre-sales and no exposure to qualifying certificates (QC) penalties over the next two years.

Moreover, with a massive 43-percent discount to the underlying market value of its
assets, it is high-reward-low-risk for investors.

BUY, TP $7.37

5. Raffles Med
As Singapores leading integrated healthcare organisation with robust track record
and exciting development plans in China, Raffles Med is one of the top picks among locally
listed stocks. MBKE reckons that Raffles Meds local expansions will support medium-term
growth, while its China expansion will drive long-term growth. Moreover, MBKE believes
that the catalysts from expansion have not been fully priced in yet, especially in China.

BUY, TP $1.85

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 52
 6. Capitaland Commercial Trust
MBKE recommends Capitaland Commercial Trust (CCT) as it is one of the better posi-
tioned REITs to ride through near-term headwinds in the sector with its favourable lease
expiry profile and strong weighted average lease expiration (WALE) of 6.8 years. Unlike
distributions for office REITs that are supported by non-core distributions, CCTs distribu-
tion highlights the underlying fundamentals of its properties. CCT is currently valued at a
14-percent discount to the value of its offices in Singapore.

BUY, TP $1.81

Article by Lim Si Jie

ST O C K S WO RT H C O N SI D E R I N G I N 2 0 1 7 Page 53