buy sell hold 2021




Sembcorp Marine Ltd ($0.115, trading halt), through its wholly-owned subsidiary Sembcorp Marine Offshore Platforms Pte. Ltd. (“SMOP”),
and consortium partner GE Renewable Energy’s Grid Solutions (“GE”) have jointly secured a Framework Cooperation Agreement (“FCA”) from TenneT TSO B.V. (“TenneT”). The FCA covers a period of five years with an option to extend another three years. It consists of three contracts, each valued at approximately EUR 2 billion, to supply the high voltage direct current (HVDC) electrical transmission systems for three mega offshore wind farm projects, with a combined capacity of six Gigawatt (GW), in the
Netherlands as part of TenneT’s offshore grid acceleration programme

SMM’s market cap stands at S$7.9bln and currently trade 0.96x PB and does not pay dividends. It is notable that SembMarine together with GE has been selected for 3 out of their 11 2-gigawatt offshore converter platforms in Europe and bears testimony of their capabilities and deliverability. We believe this should boost sentiments given the current “Hot” theme in the renewable energy sector. However, we would also like to highlight that contributions from the completions are only
expected to be 4Q’29 to 2031, implying investors need to take a longer time horizon to see the fruits from these new contract wins. We like the direction that SembMarine is heading towards as this would reduce their over-reliance on dirty energy. Bloomberg consensus target price is 13 cents implying potential upside of 14-15%. We have an “Accumulate” rating on SembMarine.


Mapletree Logistics Trust
Resuming AUM growth

■ MLT deepens its footprint in Japan, Australia and South Korea.
■ Transaction to be funded by debt and equity, and is DPU accretive.
■ Maintain Add with a higher TP of S$1.88. 


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Sembcorp Marine
New benchmark

■ We estimate SMM’s current order book stands at c.S$23bn (vs. Feb 23’s S$18bn) with contracts for offshore HVDC electrical transmission systems.
■ Work will progressively begin in 3Q24F with delivery from 4Q29F to 2031F. We estimate material revenue recognition in FY25F and lift our EPS by 10%.
■ We also raise our order win expectations to S$7bn for FY23F and S$4bn each for FY24F and FY25F (previously S$3bn p.a.).
■ We raise our TP to S$0.19, now based on 1.5x CY23F P/BV (previously 1x), based on its 7-year average trading valuation. Reiterate Add.


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AEM Holdings Ltd
Embracing Test 2.0

■ AEM was a presenter at the second run of our CGS-CIMB Tech/EV Conference on 29 Mar 2023.
■ AEM reiterated its view that the new generation of semiconductor chips will require a change in test flows that its Test 2.0 offerings provide.
■ Reiterate Add with an unchanged TP of S$3.86.


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BYD Co Ltd
Strong EV sales could sustain

■ FY22 net profit jumped to Rmb16.6bn on robust EV deliveries (+157% yoy).
■ We expect EV deliveries to rise 54%/23% yoy to 2.88m/3.54m in FY23F/24F, driven by mass market share gains and overseas expansion.
■ Reiterate Add. SOP-based TP raised to HK$342 on higher cash balance. 

Uni-Asia Group Ltd
Shorter term leases in the downturn


 FY22 revenue and PATMI beat expectations at 118%/116% respectively of our forecast. Charter rates locked in during 1H22 offset the current sluggish environment. Dividends
more than doubled to 14.5 cents.
 2H22 PATMI rose 3% YoY to S$11.4mn, bolstered by average charter rate per day in 2H22, rising by 11% YoY to US$18.2k. A decline in property sales in Japan and a weaker currency was a major drag in revenue.


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