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CGS CIMB |
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Kimly Group Margin pressure kicking in
■ 1HFY9/23 core net profit of S$16m (+10% yoy) was largely in line. Revenue held steady, while OPM contracted yoy on higher rental and labour costs. ■ We see a weaker FY23-24F earnings outlook from rising staff costs (kick-in of Progressive Wage), slower outlet growth, and weaker cost pass-through. ■ Reiterate Hold on muted FY23-24F core earnings growth. Our TP is lowered to S$0.37, still based on 15x CY24F P/E.
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CSE Global Still impacted by supply chain issues
■ Robust 1Q23 revenue growth (+36% yoy) led by infra (+60% yoy) and energy (+22% yoy). Order wins tapered to S$160m (-31% yoy) on tough comparison. ■ We think OPM will take time to recover to pre-Covid-19 levels (c.7%) given prolonged supply chain issues and intense competition. ■ Reiterate Hold with an unchanged TP of S$0.37. The stock trades at 10x FY24F P/E (~0.5 s.d. below FY12-21 mean) with an attractive yield of 7.8%.
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CGS CIMB |
UOB KAYHIAN |
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ComfortDelGro On road to recovery, but volatility remains
■ 1Q23 core PATMI of S$32m (+15% qoq, -16% yoy) was largely in line. Worst is likely over, in our view, with sequential improvement in core profitability. ■ We see better days ahead with: 1) increased monetisation for the taxi segment, and 2) margin improvement for the public transport segment. ■ Reiterate Hold. Pace of earnings recovery still uncertain amid current highinflation environment, which challenges effectiveness of indexation formulas.
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United Hampshire US REIT (UHU SP) 1Q23: Strip Centres At The Forefront Of A Retail Recovery
Retail real estate in the US demonstrated resiliency with 10 consecutive quarters of positive net absorption. According to CBRE, strip centres are leading the recovery with rent growth of 2.7% yoy in 1Q23. UHU’s strip centres cater to necessity spending and have long WALE of 7.4 years. Occupancy has improved marginally by 0.1ppt qoq to a record 97.0% in 1Q23. UHU provides resiliency and lucrative 2023 distribution yield of 11.1% and trades at P/NAV of 0.62x. Maintain BUY. Target price: US$0.71.
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ST Engineering Revenue to be backend loaded to 2H23F
■ We expect to see stronger 2H23F net profit for STE with more USS projects back-end loaded, with supply chain pressure to be relieved in 4Q23F. ■ CA was the bright spark in 1Q23 business update with revenue at 27% of our FY23F, thanks to PTF. This trend should be sustained through FY23F. ■ Record quarter win of S$4.9bn in 1Q23 thanks to DPS contracts mainly from defence aerospace and combat vessels. Retain Add with a TP of S$4.00.
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Commodities – China Weekly: Gold Continues To Shine Amid Market Chaos
Gold continues to shine as the market seeks shelter amid the US debt-ceiling crisis. Steel to raw material spreads seem to have stabilised given the sharper decline of raw material prices. Lower production costs may slow down the current declining trend of steel production. Cement prices continued searching for the bottom with inventory levels staying high. We see further upside in demand from infrastructure projects but the weakening Apr 23 property sales have dampened the sector’s recovery outlook
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