buy sell hold 2021



Keppel Corporation

Potential for 15% ROE by 2026?


■ With KEP’s new transformation plan of monetising another S$5bn-7bn worth of assets by 2026, we project it would meet its 15% ROE. Reiterate Add.

■ KEP also plans to doubled its AUM to S$100bn by 2026 and lower the proportion of EPC/development profits from real estate.

■ We think a recurring income of c.S$500m p.a. could be KEP’s run rate from FY23F, driven by asset management fees and operating income.

■ We project FY23-24F DPS of S$0.35-0.36 (5.8-6% dividend yield), likely to be supported by recurring income (c.S$0.28 above) and monetisation gains.


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Wilmar International

Weak commodity prices soften outlook


■ In 1Q23, weaker commodity prices affected refining and crushing margins for WIL and led to lower profitability despite higher sales volume.

■ We think that margin pressure could persist into 2Q23F before easing in 2H23F when demand-supply dynamics improve.

■ We reduce FY23F-24F EPS by 9.7%/5.1% on thinner margins and introduce FY25F estimates. Reiterate Add on SOP-based TP of S$4.63. 


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Alpha Picks: Solid Outperformance YTD In 2023; No Changes To Our Portfolio


Our Alpha Picks portfolio bettered the STI by 3.2ppt on a market cap-weighted basis in Apr 23. On an equal-weighted basis, our portfolio still outperformed the STI by 2.9ppt. The top performing stocks in April were large caps, led by Keppel Corp (+12.8% mom), CapitaLand Ascott Trust (+8.5% mom) and newly-added Seatrium (+4.2% mom). We make no changes to our Alpha Picks portfolio for May 23. Our Alpha Picks portfolio has now beaten the STI in 13 out of the past 14 months. 


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Emperador Inc (EMI SP)

2022: Flattish Performance In Line, Scotch Whisky To Drive Future Growth


EMI reported strong 2022 revenue growth of 12.2% yoy, driven by both the brandy and Scotch whisky segments from the resumption of global travel and relaxation of COVID19 restrictions. However, overall inflationary cost-push compressed margins, with PATMI increasing only 0.9% yoy. EMI’s Scotch whisky segment continues to outperform on higher ASPs and demand, but dragged by the brandy segment as margins compress. Maintain HOLD but with a higher PE-based target price of S$0.57. 


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Dyna-Mac (DMHL SP)

Validating the upcycle


1Q23E should rubber stamp upcycle

We expect 1Q23E revenue to surge 95% YoY to SGD80m, with NPAT jumping 61% YoY to SGD3m, underlining our expectation of a floating production storage and uploading (FPSO) upcycle. 1Q is traditionally the weakest quarter due to seasonality coupled with the festive period and we expect better quarters ahead for Dyna-Mac. We also expect an order win of >SGD300m in the near term which should further expand its order book to record levels. Also, given its huge cash pile of SGD185.4m, M&A is a potential key catalyst. Dyna-Mac is our Top Pick in the SMIDs space. Its excash valuation at 5.3x FY23E P/E is attractive vs global peers at 28.6x P/E.


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Mapletree Logistics Trust (MLT SP)

Navigating headwinds


Stable performance in difficult environment, BUY

MLT reported 4Q23 DPU of 2.268c, +1.8% QoQ, flat YoY. Contribution from new acquisitions was offset by higher operating and funding costs and adverse FX movements. Occupancy rose marginally while reversions continued at low single digit percentage. Focus is on asset enhancement and capital recycling while keeping gearing in check. While headwinds persist, we believe MLT’s regional network of warehouses and proactive asset management should result in stable performance. Maintain BUY with DMM-based target price of SGD1.80. 


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