ANALYSTS SAY: Buy, Sell, Hold (29 Dec)

Lim & Tan Securities

CapitaLand Investment / CLI ($3.67, unchanged)’s wholly-owned subsidiary Ascendas India Development VII and its joint venture partner Maharashtra Industrial Development Corporation (MIDC) have entered into separate agreements with CapitaLand India Trust / CLINT ($0.81, unchanged) to divest their respective 78.5% and 21.5% shareholding in Ascendas IT Park (Pune) to CLINT for approximately INR13.5 billion (S$221.9 million).

With the latest divestment, CLI has almost hit their 2022 target of S$3 billion of annual recycling target and also the divestment at 9% premium to its Dec’21 valuation benchmark implies value creation and accretion to shareholders of CLI. Coming at a time when global asset markets are deflating and interest rates are rising, we see CLI’s ability to divest assets at a premium to its 2021 valuations and to reduce their debt load as a positive. CLI is trading at 16-17x PE and just under 4% dividend yield with Bloomberg analyst consensus target price of $4.26 representing a potential upside of 16%.

Sembcorp Marine ($0.138, unchanged) today announced that it has completed the successful delivery of the world’s second
8th-generation drillship, the Deepwater Titan, to Transocean’s subsidiary Triton Titan GmBH (“Transocean”). Deepwater Titan is the second 8th-generation drillship constructed by Sembcorp Marine based on the Group’s Jurong Espadon 3T design. 

In addition, the Group had mentioned during last month that it expects 2H2022 losses to be similar to that for 1H2022. Sembcorp Marine’s market cap stands at S$4,363mln with current P/B at 1.1x, while it was loss-making in FY21 and presently does not pay any dividends. Consensus target price stands at S$0.14, representing a 1.4% upside from current share price.

 OCBC 

CHINA OVERSEAS LAND & INVESTMENT (688 HK) 

Recommendation :  BUY    

Fair Value        :  HKD 25.07

WELL POSITIONED HEADING INTO 2023.

• Expecting meaningful market share gains
• Contracted sales fell 22.1% year-on-year (YoY) to CNY256.7b for 11M22 but outperformed peers 
• Strong competitive advantage over peers

China Overseas Land and Investment (COLI) is a leading state-owned enterprise (SOE) property developer in China with a focus on top-tier cities. Buttressed by its strong balance sheet and competitive financing cost, the Group is well positioned to benefit from the ongoing industry consolidation and increasing scrutiny by the regulators on leverage in the industry. COLI has guided for steady growth in its contracted sales and land budget in 2022, and we expect management to focus more on merger and acquisitions (M&A) to drive its inorganic growth. COLI is also focused on high quality earnings growth, and has set a target to grow its recurring income streams via its commercial operations. It is targeting HKD10b of rental income by 2023, with high double-digit growth till 2025.

Aurelius Technologies (ATECH MK)
Brace for record earnings ahead

Results exceed expectations; raised TP
ATECH’s 9MFY23 core net profit (CNP) of MYR25.4m came in above expectations, making up 77% of both ours and consensus FY23E. We raised TP by +16% to MYR2.40 (pegging its revised CY23E EPS of 15.9sen to the industry’s historical 5Y average PER of 15.1x - unchanged), as we increased our FY23/24/25E CNP forecasts by 19%/16%/16%. We have raised sales forecasts from its communications and IOT products, and lowered taxes due to reinvestment allowance. Maintain BUY.

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Home Product Center (HMPRO TB)
ESG champion

High scores in all areas
HMPRO has achieved an ESG score of 88 on Maybank's rating system, well above the average of 50. This demonstrates its strength in environmental, social and governance metrics through quantitative and qualitative data.
It also has clear ESG goals in many areas while continuously emphasising ESG through sustainability practices covering its entire supply chain. Plus, its earnings growth outlook remains healthy. BUY, with a TP of THB16.80.

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