| UOB KAYHIAN | UOB KAYHIAN |
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InnoTek (INNOT SP) Riding On China’s Auto Sales Recovery And High TV Demand
InnoTek, which has a huge exposure to China’s auto market, is a precision metal components manufacturer automation industries. It is set to benefit from: a) China’s auto sales recovery; and b) COVID-19 social distancing measures which have boosted demand for large screen TVs. We expect 2H20 EPS to grow by 229% hoh and 19.4% yoy in 2021. InnoTek has a net cash position of S$73m. We initiate coverage with BUY and PE-based target price of S$0.82.
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Jiutian Chemical Group (JIUC SP) 3Q20: Earnings Overshoot Expectations; DMF ASP Higher Than Expected
3Q20 net profit of Rmb51.9m (+2,038% yoy, +59% qoq) overshot our estimate of Rmb38.8m, due mainly to higher-than-expected DMF ASP. While spot DMF prices are seeing some softening since our stock initiation, they are expected to stay elevated due to sustainable demand. We lift our 2021F DMF ASP assumption slightly by 2.9% to Rmb7,200/tonne, keeping a healthy buffer of 30% below the current spot price of Rmb9,350/tonne. Maintain BUY with higher target price of S$0.18.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Elite Commercial REIT (ELITE SP) Maiden Acquisition Diversifies Mix Of Sovereign Tenants
Elite has announced its first acquisition since listing, of 58 commercial buildings for £212.5m. About 36% of the new properties are in London, and this will increase Elite’s London portfolio exposure to 14%, provide higher potential growth for rent and capital values as well as opportunities for future redevelopment. Maintain BUY and target price of £0.88.
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Valuetronics (VALUE SP) Earnings recovery delayed
Earnings recovery delayed: D/G to HOLD 1HFY21 PATMI of HK91.5m (-12.1% YoY) was ahead of our and consensus estimates. This was because the allocation switch-overs to other suppliers were disrupted by Covid-19 and are mostly delayed till 2HFY21. To account for this, we raise FY21E EPS by 24% but cut FY22-23E EPS by 14-20%. This should delay earnings recovery, which we believe is a key re-rating catalyst. As such we D/G to HOLD from BUY. We now value VALUE on 10x blended FY20-21E P/E from ROE-g/COE-g derived 1.2x FY21E P/B.
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