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Sunpower Group (SPWG SP) Pure Green Investments Play After Sale Of M&S Business
Sunpower is selling its M&S business at an attractive valuation, which will result in a special dividend distribution of S$0.2359/share. Post-sale, management will focus on driving greater scalability as a pure steam-power producer in China. The GI segment has superior cash flow generation capability relative to the M&S segment, with 30-year operating concessions providing long-term revenue visibility. Maintain BUY with an 18% higher target price of S$1.10.
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GKE Corp Ltd Green shoots ahead
■ We forecast 93% NPAT growth in FY5/21F for GKE, riding on Singapore’s enhanced medical supply stockpiling and China’s infrastructure boom. ■ Favourable dynamics in Singapore’s warehousing industry and GKE’s growth initiatives in China may underpin net profit CAGR of 49% over FY20-23F. ■ We initiate coverage on GKE with an Add rating and SOP-based TP of S$0.18.
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CGS CIMB |
MAYBANK KIM ENG |
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ISDN Holdings Ltd Re-rating on the cards
■ We reiterate our view that ISDN is on track to report a record net profit in FY20F. ■ We see re-rating catalysts from its FY20 results and possible monetisation of its Indonesian hydropower business in 2021. ■ We believe ISDN’s demand outlook is stronger than we previously expected, hence our revised forecasts leading to a higher TP of S$0.72.
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Tenaga Nasional (TNB MK) A value play
Tariff rebate relieves CSR pressure With generation being largely stable in 4Q20, we believe there is little risk of revenue disappointment. Tenaga’s continued over-recovery of generation cost in 2020 (low coal price) has resulted in a tariff rebate being introduced for 1H21, thus relieving the pressure for further tariff discounts. Reiterate BUY with an unchanged MYR12.90 TP (DCF-based).
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Check out our compilation of Target Prices