Brokers' Take

IPS Securex | BUY

Nov 27 close: S$0.735

Target price: S$1.26

DMG Research, Nov 27

WE initiate coverage on IPS Securex (IPS) with a S$1.26 target price representing an 86.7 per cent upside, thus we recommend a BUY. IPS is one of Singapore's leading providers of integrated security solutions. As political instability grows around the region, ongoing disputes in certain countries and increasing national security concerns have led to governments in the region boosting their defence budgets, which puts IPS in an advantageous position to benefit from this situation. We expect PepperBall to be the game changer for IPS.

Mermaid Maritime | ADD

Nov 27 close: S$0.35

Target price: S$0.45

CIMB Research, Nov 27

AT 93 per cent of our September FY2014 forecast (Q4 at 29 per cent), FY2014 core net profit of US$44.4 million (+196 per cent year on year) was slightly below our expectations but broadly in line with consensus. The deviation came from lower subsea profitability. We trim our FY2015-2016 earnings per share by one per cent to 6 per cent on lower subsea profitability, offset by contributions from chartered-in vessels. We also introduce FY2017 forecasts, factoring in contributions from the three newbuilds - two tender rigs and one diving support vessel. We maintain Add with a lower target price (alongside blanket cut for the sector valuations). Catalysts are stronger earnings and contract wins.

ComfortDelGro | BUY

Nov 27 close: S$2.55

Target price: S$3.03

OCBC Research, Nov 27

STABILITY is ComfortDelGro's (CDG) key strength thus far for FY2014 and we think its ability to remain so is attractive. CDG's results for all three quarters in FY2014 came in within our expectations and we believe it is on track to meet our forecasted 9.0 per cent year-on-year growth for FY2014's profit after tax and minority interests. CDG's key growth drivers are its bus, rail and taxi segments and we believe these will remain strong going into 2015. For bus and rail operations in Singapore, the potential catalyst could come from a fare increase in 2015. We continue to like CDG for its diversified yet stable revenue streams from different geographical regions. With a healthy balance sheet, we expect stable and decent dividends (~55% payout) ahead. Hence, we reiterate our BUY rating on CDG with an unchanged future value estimate of S$3.03.

Compiled by Claire Huang

Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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