| CGS CIMB |
CGS CIMB |
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CSE Global Raising S$24m for M&As
■ CSE intends to raise S$24m via a share placement of 60m new shares (c.10% of existing share count). Issue price is at S$0.40. ■ Net proceeds of S$23m will be used to finance M&As, which we think could be targets in the communications or electrification sectors. ■ Reiterate Add with unchanged TP of S$0.62 as we await details on targets
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Banks Dividends to retain interest in the sector
■ In our scenario analyses, delaying the US Fed fund rate cuts to FY25F or factoring in 1 more cut could result in -3% to +2% impact on banks’ net profit. ■ Barring asset quality issues, the banks’ capital management plans and thus dividends (c.6.4-7.1% yield) remain key in sustaining interest in the sector. ■ We reiterate Neutral on the sector as re-rating catalysts such as a pick-up in loan growth and wealth management income could take time to materialise. ■ Although we think DBS may outperform in the near term due to its S$2.44 effective FY24F DPS, UOB is our top sector pick for its attractive valuation.
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UOB KAYHIAN |
LIM & TAN |
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Mapletree Logistics Trust (MLT SP) Weathering Headwinds From Mainland China
In China, growth from e-commerce has slowed. The huge logistics supply of 12m sqm in 2023 has pushed the nationwide vacancy rate to a high of 23%. We are concerned that the weakness from China could persist and last longer than the 6-12 months guided by management. We have toned down our optimism. MLT provides FY25 distribution yield of 5.6% (FLT: 7.0%). Maintain BUY. Target price: S$1.87.
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The Business Times reported that UNITED Overseas Bank / UOB ($28.95, up 0.35) is planning to double its private wealth assets under management over the next couple of years as it bets on increased wealth inflows into Singapore and South-east Asia. We continue to see Singapore banks as beneficiaries of a flight to safety and also a solid store and preservation of wealth for high net worth individuals and family offices in Asia given our strong and stable currency, stable, clean and solid governmental policies and also good track record of our property markets. We continue to see “Accumulation” opportunities in UOB as inflation remains sticky and thus rate cuts may not come as soon as indicated by market participants. UOB is trading an undemanding valuations of 8x PE, 1.1x book, 5.9% yield and 12% discount to consensus target price of $32.30 |
| LIM & TAN | KGI FRASER |
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Frasers Logistics & Commercial Trust / FLCT ($1.04, unchanged) announced that it has entered into a share purchase agreement with subsidiaries of Frasers Property Limited (“FPL” or the “Sponsor”) to acquire 89.9% of the equity interests in the property-owning companies which hold four logistics properties located in Germany (the “New Properties”) (the “Proposed Acquisition”). The agreed property purchase price for the New Properties is €129.5 million (approximately S$188.9 million) (the “Property Purchase Price”), representing a discount of 5.3% and 1.1% to the appraised value of the New Properties by Colliers and CBRE respectively. At its last traded price of $1.04, FLCT is capitalized at $3.9 billion and trades at 20x forward PE, 7.5% div yield and 0.9x book. With the acquisition being earnings and DPU accretive, yield would be enhanced by a bit to 7.7%-7.8%. This coupled with consensus target price of $1.30 implies an opportunity to “Accumulate on Weakness” as interest rates may not drop as much as the market had expected previously due to the recent releases of hotter than expected CPI and PPI data.
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Centurion Corp Ltd Centre of excellence.
• Foreign worker dormitories and student accommodations continue to contribute to revenue growth. Total revenue for 2H23 rose by 22% YoY from S$89.9mn to S$109.3mn. Despite revenue growth being partially offset by the cessation of management contracts of two onboard centres in Singapore, 2H23 revenue still managed to grow 22% YoY, showing strength in its rental rate revisions and occupancy rates across its PBWAs and PBSAs. As of FY23, the total asset under management was S$2.0bn with 67,377 operational beds in 34 properties in 15 cities globally.
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