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Sembcorp Marine (SMM SP)
Weaker-than-expected Guidance For 2H22; Medium-term Outlook Remains Bright
SMM’s 3Q22 business update contained weaker-than-expected guidance for 2H22. Though high labour costs were to blame, resulting in our increased loss estimates for 2022, it will not be an issue after end-22. Nevertheless, we maintain our bullish view on the company as the offshore marine industry remains strong, backed by high commodity prices, with the added benefit of the completion of the merger with KOM in 1Q23. Maintain BUY. Target price: S$0.156.
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Bumitama Agri (BAL SP)
3Q22: Results Within Expectations
BAL’s 3Q22 results came in within expectations. The lower qoq profit was mainly due to plummeting CPO and PK ASPs despite slightly higher sales volume. However, inventory levels remain high due to high production in 3Q22 and also logistic disruptions from heavy rainfall. BAL’s 4Q22 profit is likely to be higher qoq on the back of higher CPO ASPs and higher sales volume. Maintain HOLD with a target price of S$0.65 on the back of high 2022 dividend yield of 12%.
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ComfortDelGro (CD SP)
Hitting a speed bump
3Q22 PATMI below; trimming FY22-24E EPS and TP CDG’s 3Q22 PATMI of SGD34.3m (+32.9% YoY; -18.3% QoQ) came in below our and street expectation with 9M22 earnings of SGD153m forming around 71% of MIBG/consensus full-year estimates. We attribute the miss entirely to the group’s public transport services, especially its overseas operations, given the elevated costs and forex headwinds. We trim FY22-24E EPS by 15% and lower our DCF-based TP to SGD1.60 (WACC: 8.3%, LTG: 1%). Retain Buy as CDG’s balance sheet remains solid with net cash of SGD647m (or SGD0.30/share), underpinned by its strong FCF.
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Bumitama Agri (BAL SP)
Post 9M22 results briefing
Single-digit PER with good dividend yields BAL is on track to deliver +16%-18% YoY FFB output growth in 2022, and its 3Q22 output was key to recent earnings outperformance. We raise our FY22E-24E by +19%/+7%/+7% mainly on higher output assumptions. Following our EPS revisions, we tweaked our TP slightly to SGD0.89 (from SGD0.88) on unchanged 8x FY23 PER, -0.5SD its 5Y mean. Valuation remains attractive trading at single-digit PER with >6% dividend yields.
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Dialog Group (DLG MK)
1QFY23: Results In Line As Thailand Upstream Offset Malaysia’s Weakness
Dialog started FY23 with profits in line with expectations. An impressive maiden 1QFY23 JV income from Thailand offset Malaysia’s weakness across upstream and EPCC projects. While storage sentiment will benefit from energy security, we were positively surprised by the recent upturn in storage market conditions, though we remain cautiously optimistic assuming earnings inflection may lag behind storage.
Retain BUY, and raise target price to RM2.35.
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Charoen Pokphand Foods (CPF TB)
Resilient Earnings Recovery Outlook
Although the domestic livestock trend is stronger than our earlier estimates, we expected to see a gradual decrease in 1H23. However, the softening of domestic livestock prices will be offset by a better share of profit from CTI. We expect 2022-23 core earnings to grow 606% yoy and 14.7% yoy respectively. Maintain BUY. Target price: Bt33.00.
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