buy sell hold 2021



OKP Holdings Ltd

Potentially higher dividends in FY24


■ OKP is a transport infrastructure and civil engineering group in Singapore.

■ OKP announced that it was awarded c.S$43.8m in an arbitration. It also guided for better margins in FY23F and possibly higher dividend in FY24F.

■ As at Feb 2023, OKP had a net orderbook of c.S$454.1m, the highest in its history, according to its FY22 Annual Report.


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PropNex (PROP SP)

Still The Go-To Play For Singapore Residential Property


PropNex remains the go-to stock for exposure to Singapore’s residential property market given its dominant market share. In the medium term, its earnings could be boosted by its low-cost entry into the commercial property segment. We highlight that after its 1-for-1 bonus issue, liquidity has increased meaningfully. Maintain BUY. Target price raised to S$1.16 (previously S$1.07). 


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KSH Holdings Limited ($0.335, down 0.005), announced revenue of S$301.4 million for the year ended 31 March 2023 (“FY2023”), up 25.4% from S$240.3 million over the same corresponding period last year (“FY2022”). This is reflective of a gradual recovery of the construction business Net profit attributable to Owners of the Company for FY2023 was S$22.3 million, a decrease of S$1.9 million from S$24.2 million in the same period last year, coming in below our expectations, due to foreign exchange losses of S$6 million. Excluding the foreign exchange losses, the performance would have been in line with our expectations. 

Net gearing of 25% versus its net cash position a year ago reflects the build-up of its property development pipeline in Singapore as KSH has almost fully sold previously launched units. This is still reasonable given the expected inflows of cash from its fully sold development projects as they are handed over to clients. KSH is capitalized at S$190 million and trades at 8.5x PE and 6% dividend yield (2 cents per share) and an undemanding 0.56x P/B ratio. However, a re-rating is unlikely until their construction order books recover, and their property development pipeline strengthens further.

Singapore Telecommunications Ltd - Pulled down under

  • FY23 revenue met our expectations at 103% of FY23e estimates. EBITDA was 96% of estimates. Australian dollar weakness of 7.4% YoY in 2H23 was a major drag to earnings.
  • 2H23 underlying PATMI grew 11% to S$1.05bn. Almost all the growth came from lower depreciation and amortisation of S$90mn. Optus remains the major drag in earnings with its paltry ROIC of ~2% and 2H23 net profit of only A$7mn.
  • We left our FY24e revenue and EBITDA relatively unchanged. Our SOTP TP of S$2.84 and ACCUMULATE recommendation is maintained. Capital management remains the largest upside with planned capital recycling of S$6bn, including disposal of Trustwave, redevelopment of Comcentre and partial monetisation of infrastructure assets (datacentre, satellite, submarine cable). Any longer-term re-rating and improvement in ROIC will include a more significant return to profitability for Optus.

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Food & Beverages

Windfall from the bird flu outbreak in Brazil


■ Brazil, the world’s largest broiler exporter, reported its first ever detection of H5N1 avian influenza in May 23.

■ We believe Thai poultry industry should benefit from the global broiler supply disruption due to the potential bird flu outbreak in Brazil.

■ As a pure play for Thai poultry sector, GFPT stands to gain most, in our view


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1Q23: In Line, Supported By Lower Provisions


RHBBANK’s 1Q23 results were in line. Weaker-than-expected NIM was offset by lower provisions, solid operating cost discipline coupled with higher treasury gains. Share price resilience is expected to be supported by the group’s solid CET1 ratio of 16.9% (highest in the industry), which should allow the group to sustain an attractive dividend yield of over 7% in 2023 (highest among its peers). Maintain BUY and target price of RM6.65 (9.7% ROE, 0.83x 2023F P/B).


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