Cut Target Price to SGD2.00; Downgrade to HOLD

• We cut Target Price to SGD2.00, based on a revised RNAV discount of 45% (from 20%). 
• With large exposure to the high-end market, we expect demand for its housing stock to be dampened by the recent increase in ABSD for property investors. We downgrade our ASP assumptions by up to 12% and RNAV by 2.7%. 
• With limited upside to our Target Price, we downgrade to stock to HOLD from BUY.

Cutting ASP Assumptions

With a 5-10% increase in ABSD for property investors, we expect developers to lower ASPs to stimulate demand. As such, we cut ASPs for its high-end stock by about 10%.

With almost half of Martin Modern already sold, future price weakness should not impact this project. The pricing headwinds will affect its unlaunched projects at Beach Road and Pacific Mansion more. We cut their ASPs to SGD2,600 psf and SGD2,800 psf respectively.

Source: Maybank Kim Eng Research - 06 Jul 2018