CapitaLand – Benefits of a nimbler real estate value chain
CapitaLand was the first amongst the three names to announce its third quarter 2015 (3Q15) results at the start of this month on 4 November. Its 3Q15 net profits of S$192.7mn, a 48% jump, was in line with market expectations and came from a broad-based improvement in performance in residential development projects, rental income from malls and serviced apartments.

CapitaLand also said it had ceased negotiations regarding the potential acquisition of Asia Square Tower 1, a decision Macquarie Equities Research (MER) views as positive and disciplined on CapitaLand’s part.
 
MER retains its Outperform rating on CapitaLand shares with a 12-month target price of S$4.00. MER believes that CapitaLand shares are attractive given that they are trading at 0.75x price-to-book value and at a 38% discount to their revalued net asset valuation.

The stock closed at $$3.07 yesterday.

Wilmar – Management upbeat about outlook
Wilmar reported a 35% drop in its 3Q15 results last Wednesday, following weaker-than-expected refining margins, and weaker profit from the biodiesel and oleo chemicals division due to the lower crude oil price.

Its tropical oils division once again disappointed as it had over the last few quarters, with low CPO prices impacting upstream operations and contracting refining margins buffeting the midstream. Wilmar’s sugar operations also fell short of expectations, largely due to the weak Australian dollar. 

Nevertheless, Wilmar’s management outlook statement calls for better midstream CPO margins (biodiesel) and sugar results (rising prices) going forward. CEO Kuok Khoon Hong said that the rally in palm oil prices and Indonesia’s biodiesel blending program will improve margins and the company’s sugar milling business will benefit from the recent surge in prices.

On the date of the results release, Wilmar shares fell below the $3 mark and to its lowest closing price in three weeks. MER retains their Outperform rating on Wilmar with a 12-month target price of S$3.10.

Wilmar closed at S$2.94 yesterday.

SingTel – MER’s top pick among Singapore telcos
SingTel announced its quarterly results last Thursday, with net profit dipping 0.8% to S$1.03bn for the second quarter of the current financial year. The company had attributed the drop to "significant currency headwinds," such as the 13% decline in the Australian dollar. In constant currency terms, both operating revenue and earnings before interest, tax, depreciation and amortisation had in fact grown by 5%.

While retaining its Outperform rating on SingTel, MER reduced their price target on the stock from S$4.97 to S$4.80 on the back of its result announcement. This is due to MER’s lower estimates on SingTel’s 32.15%-owned Indian carrier Bharti Airtel.

SingTel closed at S$3.80 yesterday, its lowest in six weeks.