CGS CIMB

Singapore Banking
A quick comparison with Credit Suisse

SINGAPORE | BANKING& FINANCE | UPDATE
 On 14 March, Credit Suisse (CS) said in its 2022 annual report that it identified “material weaknesses” in internal controls over financial reporting and had not yet stemmed customer outflows. On 15 March, the bank’s top backer, Saudi National Bank, said that it was not able to give more money to the bank due to regulatory constraints. On 16 March, the bank exercised an option to borrow up to US$54bn from the Swiss National Bank.

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AEM Holdings Ltd
Patience is a virtue

■ We believe that the market has priced in a weaker FY23F since AEM’s FY22 results announcement.
■ We think that the share price re-rating could gather momentum from 2H23F onwards as the semicon industry recovers.
■ We reiterate our Add call on FY24F earnings recovery. 

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CGS CIMB

Airports of Thailand
A solid blue chip to brace market turbulence

■ We expect tourism demand to stay resilient against the backdrop of weakening global economic growth, thanks to strong pent-up demand.
■ We believe the higher operating costs for AOT after the opening of its new SAT1 terminal could be offset by a potential PSC increase in 2026F. 

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Digital Core REIT (DCREIT SP)
Rebalancing Towards Investment Grade Tenants

Cyxtera, DCREIT’s second-largest tenant accounting for 22.6% of annualised rent, was downgraded by Moody’s from B3 to Caa2 on 17 Feb 23. In the event that Cyxtera files for bankruptcy protection, our FY25 DPU forecast and target price would be reduced by 15% and 14% respectively to 3.5 US cents and US$0.67 assuming DCREIT backfills half of the vacant data centre spaces. DCREIT provides FY25 distribution yield of 8.7% (KDCREIT: 5.3% and MINT: 5.7%). Maintain BUY. Target price: US$0.78. 

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NetLink NBN Trust (NETLINK SP)
A Potentially Higher Rate Due To Rising Rates And Costs, Upgrade To BUY

The next regulatory review, which we believe may be on an uptrend, is expected to be completed by 1H23 and implemented by 2H23. Separately, 9MFY23 core earnings (+24.2% yoy) came in above expectations, forming 81% of our full-year forecasts. This prompted us to raise FY23-25 net profit by 7-15%. Given Netlink’s stable revenue streams and operating cashflows, we continue to like it as a high-yielding, safe haven stock. Upgrade to BUY with a marginally lower target price of S$1.02.

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GENTING SINGAPORE

Despite The 2023 Earnings Cut, 1Q23 Earnings Remain Solid

Increasingly likely mass market will exceed pre-Covid levels  Evidence is growing that the mass market will exceed pre-Covid levels comfortably, in our view. Singapore’s booming property prices created a lot of wealth which we gather has been driving locally sourced mass market gross gaming revenues (GGR) higher. Also, seat capacity from China to Singapore suggests that Chinese visitorship could recover to pre-Covid levels by year-end. We lift our earnings estimates by 18%-20% and DCF-TP by 23%. With 15% upside, we U/G GENS to BUY from HOLD

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