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Hong Leong Asia There is more value in the break-up
■ We forecast 54% NPAT growth in FY21F for HLA, riding on strong diesel engine sales in China and construction activity recovery in Singapore. ■ Potential secondary listing of its diesel engine arm CYD is a key re-rating catalyst, given CYD is trading at 5.6x CY22F P/E, c.60% discount vs. peers. ■ Initiate with Add (SOP-based TP of S$1.18), valuing engine/building materials at 8/12x FY22F P/E respectively, supported by S$114m ex-CYD net cash.
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CSE Global (CSE SP) Safe Proxy For Oil Recovery Backed By Attractive Dividend Yield Of >5%
We turn more positive on CSE as its oil and gas segment could be turning a corner with the rise in oil prices. Its order intake from infrastructure and mining grew 22% yoy in 2020 despite COVID-19. Furthermore, the last time CSE secured a large greenfield order win in the infrastructure space was over two years ago, providing scope for a sizeable infrastructure project win in the near term. Dividend yield is above average at 5.1%. Upgrade to BUY with a 28% higher target price of S$0.68.
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CGS CIMB |
UOB KAYHIAN |
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Star Media Group Bhd Time to lay off the dimsum
■ As its print cash cow is further emaciated, Star Media Group made the proactive decision to pull the plug on its video-streaming service dimsum. ■ We suspect that the bulk of the RM12m impairments done in 4Q20 was for the content in dimsum’s library. We now forecast FY22-23F to be profitable. ■ That being said, its print division looks to be further debilitated. Star’s catalysts lie in unlocking its real estate assets and special dividends.
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Berjaya Sports Toto (BST MK) Pricing In Longer-term Catalysts
BST appeals as it is a laggard beneficiary of economic reopening and dividend yield compression, although we expect business normalisation at only end-21. Longer-term catalysts include the Gaming Act amendment and the accelerated growth of its Vietnam investment. Meanwhile, the Berjaya Group’s ongoing restructuring, which has benefitted the stock prices of its holding and sister companies, may eventually lift sentiment on BST. Maintain BUY and target price of RM2.46.
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Check out our compilation of Target Prices
