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SEA Ltd
Scaling SeaMoney in Singapore
■ Riding on ecosystem synergies, we expect SE’s digital bank in Singapore to reach the initial regulatory deposit cap rapidly with minimal acquisition costs.
■ Similarly, Shopee’s vast customer and merchant base allows SeaMoney to easily cross-sell its credit offerings while minimising credit risks, in our view.
■ We believe SE is now reaping fruits of its labour with the launch of multiple fintech products to further monetise its customer base. Reiterate Add.
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Yangzijiang Shipbuilding (Holdings) (YZJSGD SP)
Looking Forward To Better Capital Management
Despite continued strong momentum in new order wins ytd in 2023, YZJ’s share price has disappointed in the past month, underperforming the STI and MSCI Singapore indices. We attribute this to the paucity of its dividend payout announced with its 2022 results in late-Feb 23. With net cash of S$0.31 at end-23 and lack of onerous capex, we believe that better capital management could be a share price driver in the medium term. Maintain BUY. Target price: S$1.58.
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Tencent Holdings (700 HK)
4Q22: Ample Monetisation Opportunities From Video Accounts And Development Of AI Capabilities
Tencent’s 4Q22 results are largely in line with our expectations. Revenue was flattish yoy at Rmb145b, in line with our and consensus estimates. Gross margin expanded 2.6ppt yoy, reported at 42.6%, in line with consensus expectation. Non-GAAP operating profit was Rmb39.4b, growing 19% yoy, and non-GAAP OPM came in at 27.2%, better than our estimate. Non-IFRS net profit increased by 19.4% yoy to Rmb29.7b, 2.2% and 3.7% below our and consensus estimates respectively, given optimised resource allocation. Maintain BUY. Target price: HK$435.00.
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Jiumaojiu
Strong recovery expected in FY23F
■ Total revenue was down 4.2% yoy to Rmb4bn in FY22, in line with our expectation.
■ Net profit was down 86% yoy to Rmb49m in FY22, due to store closures during Covid,
and one-off FX losses and share options, slightly better than we expected.
■ The company opened net 100 Tai Er stores and 18 Song Hotpot stores in FY22; Song
surpassed the original target of 15 stores.
■ We expect NPM to reach 8.0% in FY23F, close to the 8.3% in FY21. We believe
Jiumaojiu has large room to improve store efficiency and margins in the long run.
■ We reiterate our Add rating, with a new DCF-based TP of HK$25.
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We highlight the key points from Far East Hospitality Trust’s ($0.575, down 1 cent) annual report below. For the year, Far East H-Trust recorded gross revenue of S$83.6 million while net property income grew 2.9% to S$77.3 million, even with the divestment of Central Square which was completed on 24 March 2022. As a result, distribution to Stapled Securityholders grew 25.2% to S$65.0 million on the back of higher net property income, lower costs, and distribution of divestment gains from Central Square. This translates to a distribution per stapled security of 3.27 Singapore cents, representing an increase of 24.3% compared to 2021. As visitor arrivals began picking up from the second quarter of 2022, operational performance has gradually improved to levels above the minimum fixed rent from FEHT’s master leases. By the end of 2022, half of the REIT’s properties comprising 3 hotels and all 3 serviced residences exceeded the minimum fixed rent.
FEHT’s market cap stands at S$1.14 bln and currently trades at 19x forward PE and 0.57x PB, with a dividend yield of 6%. Consensus target price stands at S$0.74, representing 30% upside from current share price. Singapore’s reopening of borders with China & HK recently is likely to benefit FEHT.
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Yangzijiang Shipbuilding (Holdings) (YZJSGD SP)
Looking Forward To Better Capital Management
Despite continued strong momentum in new order wins ytd in 2023, YZJ’s share price has disappointed in the past month, underperforming the STI and MSCI Singapore
indices. We attribute this to the paucity of its dividend payout announced with its 2022
results in late-Feb 23. With net cash of S$0.31 at end-23 and lack of onerous capex, we believe that better capital management could be a share price driver in the medium term. Maintain BUY. Target price: S$1.58.
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