buy sell hold 2021



Wilmar International (WIL SP)
Contributions From YKA Compensates Weakness From Tropical Oils

We estimate Wilmar’s 1Q23 core net profit at US$350m-380m (1Q22: US$328m). 1Q23 earnings will be largely coming from a YKA turnaround and higher contributions from sugar, well compensating the weakness from tropical oils. Recall that in 1Q22, YKA suffered from severe margin compression and contributed only 6% of Wilmar’s PBT. YKA should be able to deliver a better 1Q23 performance with slightly better margins
and higher sales volume yoy. Maintain BUY. Target price: S$5.50.


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Commodities – China
Weekly: Gold Steadies Above US$2,000; Market Sees Over 80% Odds Of A 25bp

Hike In May
Gold and copper futures retraced from the multi-month peak on 14 April on the hawkish statement from the Fed governor. Traders now see over 80% odds of a 25bp rate hike in the next FOMC meeting. Weakening steel prices have further compressed steel mills’ profitability. With steel production still hovering at high levels, we see strong inventory pressure ahead. Cement prices have continued weakening while inventory is piling up, due to high capacity utilisation and a lack of incremental demand from new projects. 


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Telecommunications – Malaysia
Malaysia Plans Second 5G Network

According to media reports, Malaysia may introduce a second 5G network by Jan 24. This is subject to DNB meeting the government's target of 80% 5G coverage by the end of this year. Our checks point towards Maxis and U Mobile forming a consortium to roll out 5G in Malaysia while the other telcos will form DNB. We make no change to our stance for the sector. Maintain MARKET WEIGHT. Prefer fixed over wireless. Top picks: TIME and Telekom Malaysia. 


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Tech Manufacturing Services
1Q23F preview - Aztech could see growth

■ Singapore tech manufacturing companies are widely expected to release their 1Q23F business updates in the upcoming weeks.
■ Aztech (Add, TP: S$0.91) could be the only company under our coverage that can still report yoy net profit growth in 1Q23F, in our view.
■ In the big cap space, we like Venture for its strong net cash balance sheet and 4.22% dividend yields (based on our forecasts) over FY23-25F.


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Astro Malaysia
A Max upgrade

■ We reiterate our Add call on Astro with our 86 sen DCF-based TP, supported by a FY1/24F 8.5% dividend yield and undemanding 9x P/E (FY1/24-25F).
■ Warner Bros. Discovery’s decision to bring its revamped Max service to AsiaPacific by 2024 is a potential re-rating catalyst.
■ In addition to increasing subscriber retention, tie-ups with streaming services should also lower its content cost risks, in our view.


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Dyna-Mac (DMHL SP)
The upcycle just started

Initiate with BUY and TP of SGD0.35

Dyna-Mac is in an enviable position to capture the surge in FPSO demand. There’s a shortage of FPSO capacity in the industry due to the lack of investment in the oil & gas (O&G) sector since 2016 and the attrition of competitors. The new management team has streamlined operations and costs, and renegotiated payment terms, which has helped to improve cash flow and profitability. M&A is also a real possibility as Dyna-Mac has net cash of SGD185.4m (SGD0.18/share). Dyna-Mac has an order book of SGD412.3m and we forecast earnings CAGR of 30+% for the next 2 years. We believe Dyna-Mac is significantly undervalued. Initiate coverage with BUY and TP of SGD0.35, based on 9.5x ex-cash FY23E P/E.


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AEM Holdings2.2700.130
Avi-Tech Electronics0.265-
Best World1.6800.050
Broadway Ind0.0990.012
China Sunsine0.4000.010
Delfi Limited0.9700.005
Food Empire1.430-0.010
Fortress Minerals0.280-
Geo Energy Res0.325-0.005
GSS Energy0.026-0.001
Hong Leong Finance2.480-
Hongkong Land (USD)3.240-0.140
ISDN Holdings0.315-0.005
IX Biopharma0.045-
Jiutian Chemical0.0260.001
KSH Holdings0.250-
Leader Env0.050-0.001
Medtecs Intl0.131-0.001
Nordic Group0.3400.005
Oxley Holdings0.089-0.002
REX International0.1350.002
Sinostar PEC0.138-0.002
Southern Alliance Mining0.600-
Straco Corp.0.500-0.030
Sunpower Group0.230-
The Trendlines0.085-
Totm Technologies0.023-
Uni-Asia Group0.820-0.020
Wilmar Intl3.3500.030
Yangzijiang Shipbldg1.7800.030

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