STRATEGY – SINGAPORE
Alpha Picks: Switch Out Wilmar For Bumitama, Drop Lendlease And add CapitaLand Investment
Our Alpha Picks rose 2.5% mom on an equal-weight basis and outperformed the STI which fell marginally by 0.2%. For Mar 22, we have switched out of Wilmar and into Bumitama as we prefer the latter’s purer exposure to CPO prices as well as having solid production growth in 2022. We cut our losses on Lendlease REIT and instead add CapitaLand Investment as we foresee earnings growth from its lodging segment as well as its funds management segment. |
Japfa (JAP SP)
2021: Results In Line; Uncertainties From Vietnam Remain
Japfa’s 2021 core net PATMI of US$133m (-32% yoy) was in line, forming 103% of our full-year forecast. Performance from the Indonesia poultry segment improved as lockdowns eased while the Vietnam operations continue to experience weakness from low ASP and high feed cost. Its China dairy segment continued to deliver a stable
performance. We cut our 2022 EPS by 19% to account for weakness from Vietnam.
Maintain HOLD and SOTP-based target price of S$0.63.
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Hyphens Pharma International
Quality earnings to come in FY22F
■ GP jumped 10.2% yoy in FY21 due to lower revenue contribution from
Vietnam; we expect FY22F GPM to normalise to 37.7% following reopenings.
■ Novem acquisition was completed earlier than expected; we forecast Novem
to add c.S$1.5m to bottomline in FY22F (c.22% of FY21 net profit).
■ Reiterate Add. Our TP remains at S$0.36. We expect Novem and reopening
of its operating markets to drive 18.7% yoy net profit growth in FY22F.
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UMS Holdings Ltd
A taxing issue
■ FY21 pretax profit was in line with our expectations but net profit at 82%/83%
of our/Bloomberg consensus was below expectations due to higher taxes.
■ Key downside risks for FY22F are higher raw material costs (aluminium) and
higher effective tax rate.
■ Reiterate Add with an unchanged S$1.63 TP as UMS FY22F EPS could
potentially grow 37% yoy, in our view.
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