Strategy Report: Deutsche has Strategy Report. Note that Co’s posted solid 4Q10 results, with steady FY11 outlook, and house has a 12-month index target of 3,680, implying a 15.9x FY11E P/E, (slightly above 2003-05 levels)….
Note that Aggregate 4QFY10 core earnings surpassed house estimates by 2%. due to earnings surprises in the Conglomerates on delivery of high-margin projects and better than expected performance from Transportation that offset weaker than expected core earnings from Properties….
Banks came in below forecasts but believe that the underlying trends are better than the headline results. would focus on:
1) beneficiaries of strong near term cyclical dynamics
2) companies with surplus capital to deploy or return
3) domestic asset plays
4) stocks trading at large discounts to normalized valuations where cyclical dynamics should improve on a 12m view…..
Add that market valuations are moderate with P/Es of 13.1x FY11E and 11.7x FY12E, and a market P/B of 1.55x. Top picks are SembMarine, DBS, Keppel Land, Top Sells are NOL & M1.
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