buy sell hold 2021



PTT Global Chemical

The perfect storm


■ PTTGC’s ethane feedstock contracts with PTT could be subject to revision if PTT is required to pay more for domestic gas.

■ PTTGC’s operating outlook should remain weak in 2H23F given slow recovery in industrial coating demand and depressed olefins spreads. 


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Xiaomi Corporation

Smartphone sales set to recover in 2Q/2H23


■ 1Q23 adjusted net profit up 13% yoy and formed 27% of our FY23F forecast, largely in-line, as we expect sustained operational improvement in 2Q/2H23F.

■ We see a sequential improvement in smartphone sales in the next few quarters with a stable GPM outlook due to its sound premiumisation strategy.

■ Reiterate Add. TP of HK$15.78 based on 24x FY24F P/E, its 3-year average. 


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1HFY23: Muted Results In Line With Expectations; No Near-Term Catalysts


BRC reported lower 1HFY23 earnings of S$26.2m (-34% yoy, -48% hoh), dragged by lower project contractual offtake and an unfavourable product mix. Management noted that Singapore’s construction sector is expected to recover from 3QFY23 onwards, backed by easing of the labour shortage and a strong pipeline of upcoming construction projects. However, with no near-term catalysts as well as compressed volumes in 3QFY23, we maintain HOLD but with a higher target price of S$1.73. 


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DBS Group Holdings Ltd - Dividends to increase by 24 cents per year

We attended DBS’ Investor Day on 22 May 2023 where management shared their digital-led strategy in growth markets, how new businesses with potential have evolved from the previous Investor Day in 2017 and addressed some of the questions from investors and analysts. The key takeaways from DBS Investor Day 2023 are:

  • Guidance of a medium-term (3 to 5 years) ROE of 15-17% and a baseline for dividends to increase by 24 cents per year. Further upside of S$3bn based on optimal CET-1 operating range which could be distributed in further ordinary dividend step-up, special dividend or share buyback.
  • Technology has transformed the way they manage with the use of a hybrid multi-cloud strategy with in-house infrastructure as a service. Other business segments such as Consumer and SME, Private banking, Global transaction services, and Treasury markets have also benefited from the digital transformation.


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SingTel (S$2.56, up 2 cents) saw 2H23 net earnings improve 6.1% yoy to S$1,055mln while 2H23 underlying profit rose 11.5% yoy to S$1,048mln. A final ordinary dividend was declared and increased to S$0.053 (2H22: S$0.048) while total dividends in FY23 equated to S$0.149 (FY22: S$0.093), coming in around our expectations of S$0.15.

At $2.56, market cap of SingTel is S$41.9bln, FY23 P/E is 18.8x, FY23 underlying P/E is 20.4x, current P/B is 1.6x, dividend yield is 5.8% and its present net debt position of S$8.3bln equates to net gearing of 33.2%. Given that we continue to like SingTel for its defensive attributes in times of market uncertainty, we therefore maintain our BUY recommendation on the stock.




Malayan Banking (MAY MK)

1Q23: Risk-to-reward Well Balanced


Maybank’s 1Q23 net profit was in line, underpinned by the absence of the prosperity tax and lower provisions. Pre-provision operating profit contracted due to NIM compression and weaker insurance income. The stock is trading at -0.5SD from its historical mean P/B, which is fair. The minimal scope for credit cost writeback and weaker loans growth are offset by a relatively attractive dividend yield in excess of 6%. Maintain HOLD and target price of RM9.00 (1.15x 2023F P/B, 10.2% ROE). 


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