ANALYSTS SAY: Buy, Sell, Hold (20 May)

CGS CIMB

Singapore Airlines (SIA SP)
FY22: Results In Line; Emerging Strong In FY23

SIA’s FY22 revenue of S$7,615m and net loss of S$962m were in line with our forecasts. There are signs that SIA’s recovery trajectory is steeper than we previously expected. We now expect SIA to turn in an exceptionally strong FY23 net profit of S$1.35b, driven by strong pax volume, strong pax yields and a fuel hedge gain of over S$1b. Despite strong near-term earnings outlook, valuation is stretched. Maintain HOLD. Our new target price of S$4.88 is based on 1.12x FY23 P/B (2SD above historical average).

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Delfi Ltd
Picking up where it left off

■ 1Q22 revenue of S$133.0m is comparable to quarterly high of S$136.6m in
1Q20, suggesting business momentum has returned to pre-Covid levels.
■ We think Delfi could bring forward its expansion plans to FY22F if sales
momentum is sustained for the next 1-2 quarters.
■ Delfi generated free cash flow of US$24.9m in 1Q22, bringing net cash position to US$99.9m that is supportive of c.5% dividend yields. Reiterate Add.

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PHILLIP SECURITIES

OCBC

BRC Asia
Construction sector recovery surpasses our estimates

SINGAPORE | INDUSTRIAL | 1H22 results
 1HFY22 revenue and net profit was ahead of our expectations at 81%/83% of FY22e. The
beat came from a faster-than-expected recovery of the construction sector. We estimate
that volume moved increased ~30% YoY in 1HFY22.
 $1.8mn in net reversal for onerous contracts made in 1HFY22 as contracts were fulfilled,
though this was offset by additional provisions for deliveries beyond the period.
 Provision for impairment on trade receivables fell over 60% YoY aided by the recovery of
the construction sector and government support.
 Maintain BUY with a higher target price of S$2.26 (prev. S$1.84). Our TP is based on 8x
FY22e P/E, still at a 15% discount to the 10-year historical average, on account of the uncertain external environment. We revised upwards our FY22e earnings by 37% to account for the faster pace of recovery in the construction sector. 1H22 dividends jumped 50% YoY to 6 cents. Stock is now trading at 10.7% dividend yield.

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Thai Beverage
Singapore| Consumer Staples

Rating BUY (as at 19 May 2022)
Last Close SGD 0.70
Fair Value SGD 0.88

Beneficiary of reopening
• EBITDA and PATMI improved 7.5% and 13.3% YoY in
1HFY22 (financial half-year to end-Mar 2022)
• Performance boosted by easing Covid-19
restrictions
• An interim dividend of 0.15 Thai Baht was declared

Investment thesis
Thai Beverage PLC’s (ThaiBev) 1HFY22 revenue rose 8.9% year-on year (YoY) to THB 142.9b, driven by stronger performances across its business segments, thanks to relaxation of Covid-19 restrictions. Total sales volume grew 6.4% YoY in 1HFY22. EBITDA and PATMI improved 7.5% YoY and 13.3% YoY to THB 28.2b and THB 16.3b, respectively. An interim dividend of 0.15 Thai Baht per share was declared, same as last year. Costs such as raw material and packaging increased in 1HFY22 but ThaiBev managed to mitigate some of the costs through improvement in operation efficiency and price adjustments. EBITDA increased YoY for all Thaibev’s business segments, with the exception of the Spirits
business (-2.6% YoY in 1HFY22). Performance of the beer business benefited from earlier reopening in Vietnam.
Total sales volume increased 5.5% YoY including Sabeco’s sales. As domestic and international borders reopen, we see ThaiBev as a beneficiary of reopening and the gradual return of tourists. After adjustments, we
keep our fair value estimate at SGD0.88.