buy sell hold 2021



DBS Group Holdings Ltd

Continued rise in NII while fee income recovers



 1Q23 earnings of S$2.57bn were above our estimates due to higher net interest income (NII) and fee income. 1Q23 PATMI is 28% of our FY23e forecast. 1Q23 DPS is raised 17% YoY to 42 cents.

 NII surged 50% YoY to S$3.27bn on NIM expansion of 66bps to 2.12% despite loan growth remaining flat YoY. Fee income decline moderated to 4% YoY and grew 29% QoQ, while other non-interest income grew 39% YoY. DBS lowered its guidance for FY23e, with NIM guidance from 2.10% to 2.05-2.10%; loan growth guidance from mid-single digit to 3-5%; and fee income guidance from double-digit to high-single digit.

 Maintain BUY with an unchanged target price of S$41.60. We maintain FY23e earnings as we lower NII estimates for FY23e due to lower loans growth and NIMs, offset by lower operating expenses and provisions estimates. We assume 1.90x FY23e P/BV and ROE estimate of 16.6% in our GGM valuation.


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Aztech Global (AZTECH SP)
1Q23: Earnings Largely In Line; Outlook Remains Positive

Aztech’s 1Q23 earnings after excluding S$3.1m forex impact is S$16.5m (+19% yoy) and this is largely in line with our forecast, forming 16% of our full-year estimate. IoT devices continued to be a key growth driver, driving revenue growth of 26% yoy. Orderbook remains healthy at S$662m as of 4 May 23, of which majority are planned for completion in 2023. The outlook for 2023 remains positive, with Aztech expecting its revenue to grow by double digits. Maintain BUY with a target price of S$1.00



 Maybank KE 

Frasers Logistics & Commercial Trust ($1.36, up 3 cents) announced 1HFY23 revenue of S$208.0 million and Adjusted Net Property Income of S$155.9 million for 1HFY23, representing decreases of 11.7% and 13.4% respectively, from S$235.7 million and S$180.1 million. The year-on-year decreases were mainly due to the absence of contribution from Cross Street Exchange which was divested on 31 March 2022, and weaker exchange rates for the foreign currencies against the Singapore Dollar over the period. Distributable income for 1HFY23 was correspondingly lower at S$130.8 million, from S$142.1 million a year ago. The distribution per unit (“DPU”) for 1HFY23 was 3.52 Singapore cents, representing a decrease of 8.6% from 3.85 Singapore cents in 1HFY22. The 1HFY23 DPU will be paid on 15 June 2023. 

FLCT’s market cap stands at S$5.1bln and currently trades at 23x forward PE and 1.1x PB, with a dividend yield of 5.7%. Consensus target price stands at $1.43, representing 5.1% upside from consensus target price. Given the hawkish environment, weaker performance amidst a uncertain environment coupled with a low consensus price, we maintain a “Neutral” on FLCT


Maintain BUY with an unchanged TP of SGD1.29 FEH will report 1Q23 earnings on 12 May 2023 after market hours and we expect revenue of USD86.7m (+5% YoY) and NPAT of USD11.2m (+22% YoY). This should be driven by strong demand, especially in its core markets of Russia and Vietnam. Corporate share buy-backs have also been consistent and will likely resume after the blackout period given it has just renewed its mandate. With a positive 1Q23E ahead and an undemanding valuation, we maintain BUY on an unchanged TP of SGD1.29, based on 11x FY23E P/E. 

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Aztech Global Ltd

Inflation eats into strong revenue growth


■ Aztech’s 1Q23 net profit of S$13.4m was 17.8% below our S$16.3m forecast due to a foreign exchange loss of S$3.1m.

■ Excluding the FX loss, 1Q23 net profit would have been in line with our expectations. 1Q23 revenue grew 26.3% yoy.

■ Reiterate Add with a higher TP of S$1.02, now based on 8.4x (previously 7.5x) CY24F EPS (still 0.5 s.d. below its 2-year average P/E). 


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Frasers Logistics & Commercial Trust

FX drag the biggest headwind

• 1HFY23 (financial year ending Sep 2023) distribution per unit (DPU) fell 8.6% year-on-year (YoY) to 3.52 Singapore cents due largely to FX impact
• Overall portfolio occupancy unchanged at 95.9%; solid rental reversions achieved
• Aggregate leverage ratio remained healthy at 27.8% with 76.2% of debt hedged

Investment thesis
Frasers Logistics & Commercial Trust (FLCT) owns a portfolio of prime logistics and industrial (L&I) assets strategically located within established industrial and logistics markets in Australia, Germany and the
Netherlands. It also owns commercial and business park assets in Singapore, Australia and the UK. We believe one of FLCT’s investment merits is its defensive profile given its high portfolio occupancy rate, healthy balance sheet and long weighted average lease to expiry with manageable lease expiries in FY23. FLCT also
places strong focus on ESG aspects. It is targeting net zero carbon status by 2030 and has consistently ranked highly in the Global Real Estate Sustainability Benchmark (GRESB) assessment.

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