UOB KAYHIAN

Suntec REIT (SUN SP)
2H22: Strong Recovery At Suntec City Mall And Suntec Convention

SUN reported a strong operational performance in Singapore and resilient contributions from the UK. Suntec Convention turned around to provide NPI of S$8.4m in 2H22. DPU from operations declined 17.9% yoy due to higher interest rates, weakness of the AUD, and a higher proportion of management fees paid in cash. Management has decided not to proceed with capital distribution in 2023. Distribution yield for 2023 is fair at 5.3%, although P/NAV of 0.65x is attractive. Maintain HOLD. Target price: S$1.40.

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SATS (SATS SP)
On Track To Complete The WFS Acquisition

With the receipt of shareholders’ approvals, SATS is on track to complete the WFS deal in Mar/Apr 23. We estimate the financial impact of the WFS deal to be dilutive for SATS in the initial years after the transaction is completed, although this also depends on how quickly the global air cargo outlook turns around and how fast SATS can realise its forecasted synergy. Maintain BUY with a higher target price of S$3.28 (for cum-right shares), based on 9.7x FY25 adjusted EBITDA for the combined entity. 

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UOB KAYHIAN

Westports Holdings (WPRTS MK)
2022: Profits In Line; Partially Factor In New Concession Event

2022 core profit was in line, after excluding major impairment reversal of the JV cruise business and investment tax allowance (ITA). Noting that: a) low 0-5% container growth guidance for 2023, b) gateway now at a high base, and c) moderating VAS, we believe share price may have started to price in chances of the new WPRTS 2 concession materialising, instead of earnings catalysts. Maintain HOLD with a higher DCF-based target price of RM3.80.

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Banks
4Q22F: tapering NIM expansion; div. upside

■ NIM expansion likely continued in 4Q22F, though the qoq rise likely halved as funding costs caught up. UOB could lead the pack due to Citi (c.10bp boost).
■ We highlight a possible uptick in credit costs for UOB (NPL collateral top-ups) and OCBC (MEV). Full-year impairments should still be within guidance.
■ Reiterate Neutral. UOB is our top pick as Citi integration is shaping up well and a recovery in ASEAN economies bodes well for UOB.
■ Strong capital and income trajectory supports a rise in FY23F ordinary DPS for DBS and OCBC. DBS could surprise with a special DPS for 4Q22F. 

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Charoen Pokphand Foods
At the beginning of the downcycle

■ 4Q22F core net profit likely recovered yoy, thanks to higher meat prices, but was likely weaker qoq amid the low selling season and falling meat prices.
■ We believe meat prices in most markets peaked in FY22F and will fall in FY23F, putting pressure on CPF’s GPM.
■ Downgrade to Hold with a lower SOP-based TP of THB26. 

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MY E.G. Services
Rewarding shareholders with Agmo shares

■ MyEG plans to distribute its 25.8% stake in Agmo via dividend-in-specie to entitled shareholders in two tranches amounting to 84m shares in 2023.
■ The exercise is intended to reward its entitled shareholders and allow them to make separate investment decisions between MyEG and Agmo.
■ We see a neutral impact to MyEG’s FY23-24F EPS. Reiterate Add and TP. 

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