ANALYSTS SAY: Buy, Sell, Hold (22 March '21)

United Global Limited

Renewed energy

SINGAPORE | INDUSTRIAL | INITIATION

 UGL intends to leverage its new 60:40 JV with Repsol in UOC to expand UOC’s scale and reach. UOC’s revenue dropped 18.2% YoY in FY20 due to lower manufacturing ASP and trading revenue but gross margins improved 5.3 ppts.

 Global lubricant market projected to reach US$182.6bn by 2025. Growth in ASEAN expected to be 2.0% CAGR from 2019 to 2029, with growth accelerating from 2024 as its developing economies recover from the pandemic.

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iFAST Corp (IFAST SP)

Gaining Traction With The Rise In AUA

AUA growth was strong in 2020, catalysed by the shift towards digital adoption in the wealth management industry. The anticipated strong AUA growth will be supported by the positive momentum in net inflows of client assets. There are several new growth avenues that iFAST has laid out the operational roadmap for, with its main goal being to provide a holistic financial solutions product. Upgrade to BUY after changing our valuation methodology. Target price: S$7.96.

UOB KAYHIAN

UOB KAYHIAN

REITs – Singapore

S-REITs Bi-Weekly Updates (1-15 Mar 21)

S-REITs gained 2.3% during 1-15 March. We expect government bond yields to remain firm with an upward bias. We recommend a balanced mix of blue chip and laggard SREITs. BUY AREIT (Target: S$3.82) and FCT (Target: S$3.18), which provide distribution yields of 5.3% and 5.5% respectively. BUY ALLT (Target: S$0.89), LREIT (Target: S$0.97), SUN (Target: S$1.72) and UHU (Target: US$0.95), which provide distribution yields of 7%, 6.1%, 5.9% and 9.6%. Maintain OVERWEIGHT. 

AirAsia (AAGB MK)

Capital Raising Is Positive, But Issuance Of Free Shares Is Not

Post placement of 20% new shares, AirAsia will likely raise further funds via a rights issue. However investors should note the carrier: a) is proposing to issue almost 10% new shares at no cost, which would dilute minority interests stake, and raise corporate governance issues; and b) has about RM6b in lease and maintenance liabilities over the next three years. We have valued AirAsia on a post placement book value basis, along with discounted 2022-23 earnings, and derived a target price of RM0.68. Maintain SELL.