Friday, June 10, 2016

Deutsche Strategy

Strategy: Deutsche include SMM into top five picks, replacing City Dev
-City Dev share price rose 18% YTD
-SMM may have limited downside and better upside potential due to:
1) O&M sector currently under-owned
2) SMM fallen significantly since crude price downturn in 2014
3) Majority of delivery in SMM order book is 2-3 years out, higher odds for oil price to strengthen, reducing deferment/impairment risk
4) bulk of order book exposure is not in the oversupplied shallow water space
-Deutsche has Buy rating with TP of $1.95 on SMM
-Remain 4 top picks include Comfort (TP $3.51), DBS ($19.80), First resources ($2), and Singtel ($4.60).

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