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Genting Singapore (GENS SP) 2Q21: Qoq Improvement Despite COVID-19 Miseries, Major Recovery In Sight
GENS’ 2Q21 results came in above our expectation despite lower operating capacity as Singapore returned to Phase 2 (Heightened Alert) of the country’s circuit breaker. Positively, GENS delivered a stronger qoq EBITDA despite flattish revenue, outperforming rival MBS (EBITDA -22% qoq). We expect GENS to generate meaningful capital appreciation until 2022, with Singapore’s resilient vaccination pace navigating the direction towards achieving herd immunity by September. Target price: S$1.08.
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UOB KAYHIAN |
UOB KAYHIAN |
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Singapore Telecommunications (ST SP) 1QFY22: Earnings Below Expectations; Revenue And EBITDA In Line
Singtel delivered 1QFY22 core earnings of S$451m, a 33% yoy surge on the back of the stable consumer landscape in Singapore, improved Optus performance and a turnaround at associate Airtel. While 1QFY22’s core earnings were below our full-year forecast, revenue and EBITDA were in line. The discrepancy on our end stemmed from lower-than-expected associates and tax rates. We cut FY22-24 forecasts by 8%/4%/4% respectively. Maintain BUY with a marginally lower target price of S$2.75.
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ST Engineering (STE SP) 1H21: Ex-Grants, Net Profit Grew 19.5%, But 2H21 Likely To Be More Challenging
1H21 earnings only reflected an S$11m reduction in government grants. We estimate that grants could decline greater than S$150m in 2H21. While STE aims to offset that by further cost savings and new businesses, we estimate 2H21 earnings could drop 30% hoh. We are encouraged by STE’s continued growth in orderbook, but valuation multiples are unlikely to expand further. Downgrade to HOLD. Target Price: S$4.25.
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