UOB KAYHIAN

APAC Realty Ltd
Pinning longer-term hopes on Vietnam

■ APAC to invest up to S$15.4m to grow its Vietnam business.
■ Investing to boost the real estate brokerage business in Vietnam.
■ Reiterate Add rating with an unchanged TP of S$0.77.

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REITs – Singapore
The Test Of Fire Makes Fine Steel

Our stress test reveals that CLAS, FLT, MINT and MLT provide upside of 7%, 14%, 19% and 18% respectively even if interest rates maintain at peak levels on a permanent basis. We focus on S-REITs with resilient balance sheets to weather a protracted period of elevated interest rates. BUY CLAS (Target: S$1.37), CLAR (Target: S$3.27), FLT (Target: S$1.56), MINT (Target: S$3.30) and MLT (Target: S$1.99). Maintain OVERWEIGHT. 

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CGS CIMB

Agribusiness
Palm oil stocks expected to ease in 1Q23F

■ Malaysian palm oil stocks fell 4% mom to 2.2m tonnes at end-Dec 2022, broadly in line with market expectations
■ We expect stocks to decline further in Jan-Feb 23 before climbing in 2Q23F.
■ We project Malaysian planters to report a 33% decline in FY23F net profits due to lower CPO price (-25% yoy) and rising estate costs. 

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Quarterly ASEAN Outlook
Guarded Optimism As Prospects Brighten For A Soft Landing

Interest rates should peak in 1Q23 while inflation is expected to continue receding in 1H23. Growth in ASEAN would be supported by the reopening of China in 2023. Thailand benefits from a tourism recovery and high food prices. BUY Bangkok Bank (Target: Bt165), Advanced Info (Target: Bt244) and Thai Union (Target: Bt23). We like Indonesia for growth from green commodities. BUY Bank Rakyat (Target: Rp5,300), Telkom Indonesia (Target: Rp4,860) and Mitra Adiperkasa (Target: Rp1,600).

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Farm Fresh Berhad (FFB MK)
Emerging from the clouds

Maintain BUY with unchanged TP of MYR1.75
FFB’s outlook prospects are positive. With operating expenses under control and production constraints behind them, the group is poised for growth from 2HFY23 onwards. We keep our earnings estimates unchanged. Reiterate BUY with a TP of MYR1.75 (29x CY23E PER based on the Malaysia dairy-related peer average). 

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Siam Cement (SCC TB)
4Q22E earnings to tumble, moderate recovery in 2023

Cut FY22E earnings forecast, retain HOLD
4Q22 earnings are likely to plunge 86% YoY to only THB1.15b. The earnings flop seen in all three businesses, namely chemicals, building material products and packaging, should be dragged by weak demand and reduced prices. We thus cut our FY22E earnings forecast 22% to THB22.376b (-53% YoY). However, China’s reopening should see earnings recover in 2023 and we maintain our earnings forecast of THB31.652b, a rebound of 42%, but still off a low base. We maintain our HOLD rating with a TP of THB340.

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