UOB KAYHIAN

Prime US REIT (PRIME SP)
Rising From The Abyss

PRIME's Class A offices will benefit from a flight to quality despite the gloom in the US office market in 2H22. It is able to continue generating positive rental reversion as inplace passing rent was 6.7% below asking rent in 4Q22. It has prudently fixed or hedged 83% of its borrowings to fixed rates and has no refinancing till Jul 24. PRIME corrected 40% in 2H22. Valuation has bombed out with 2023 distribution yield at 15.2% and P/NAV at 0.56x. Initiate coverage with BUY and target price of US$0.78.

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Thai Beverage (THBEV SP)
Returning To The Land Of Smiles

Thailand’s robust tourism recovery is expected to continue with its upward momentum in 2023, driven by an influx of Chinese tourists. China’s abrupt zero-COVID-19 policy shift provides strong tailwinds for Thailand’s tourism sector, benefitting consumer companies such as THBEV. We opine that THBEV remains attractively priced at -0.5SD to its five-year mean PE. Maintain BUY with a higher SOTP-based target price of S$0.85 (S$0.73 previously).

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UOB KAYHIAN

Scientex (SCI MK)
Cyclical Accumulation On Margins Recovery And Global Economic Reopening

With China’s economy reopening after the last pillar of its zero-COVID policy was dismantled, we expect Scientex to benefit indirectly from the recovery of global trade flows. Meanwhile, easing input inflation with resin costs retracing >20% from 2022’s peak will allow the group’s manufacturing segment to deliver margins recovery in upcoming quarters. The group’s property segment will also record resilient growth in 2023 with more project launches. Maintain BUY. Target price: RM4.01.

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Srinanaporn Marketing (SNNP TB)
Very promising outlook

Raising forecasts and TP
We maintain our BUY call on SNNP with a raised target price of THB27.50 based on DCF (WACC 8.2% and G.3.5%) from THB21.20. We revise up our earnings forecast for FY22E-24E by 10-26% to reflect better-than-expected sales and gross margins. This is driven by both domestic and international
sales growth, especially in Vietnam, which has strong growth potential. We estimate FY23E and FY24E earnings to jump 30% and 21%, respectively. The 4Q22 earnings due on 21 Feb are expected to hit a record high.

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Dialog Group (DLG MK)
Expands upstream ops

Maintain BUY and MYR4.90 TP
Whilst this PSC is a low-risk deal and is unlikely to contribute in the near term, Dialog holding a majority stake and operatorship reflects its change in strategy (previously a minority holder in its earlier PSCs) as well as its intention to grow its upstream ops alongside its tank terminal ops, of which the latter will remain its key driver. Developing Pengerang to its full potential remains its key agenda and its Phase 3 ops are expected to gain traction this FY. Our TP is SOP-based.

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Regional Plantations
MPOB’s 2022 report card and 2023 outlook

Remain NEUTRAL on the sector
Record high CPO ASP (MYR5,088/t, +15% YoY) in 2022 more than compensated for the industry’s low productivity as MY’s palm oil export revenue grew 24% YoY to c.MYR135b. MY’s oil palm sector is saddled with a few ongoing structural issues such as declining yield trend, declining planted area, and MY’s PO losing price competitiveness vis-à-vis ID due to the latter’s export tax structure. Our preferred BUYs are KLK, FR, & BAL.

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