buy sell hold 2021




Delayed gratification


■ We cut our FY3/24F/25F core net profit estimates by 22.9%/17.5% post SATS’s analyst briefing as we think its costs are likely to stay high.

■ SATS’s early redemption of WFS’s medium-term notes is likely to see one-off re-financing costs of c.S$35.7m in 1QFY3/24F.

■ Recognition of lease liabilities from the consolidation of WFS could also lead to higher recurring interest of c.S$23.3m from FY3/24F.

■ Given the EPS cuts, our DCF (WACC: 8.0%) TP is lowered to S$2.60. Current valuation is steep at 45x FY24F P/E. Downgrade from Add to Hold.


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Malaysia Airports Holdings

1Q23: second post-Covid quarterly profit


■ 1Q23 core net profit was 18%/15% of our/Bloomberg consensus FY23F forecasts, above expectations as earnings could pick up in future quarters.

■ We reiterate our Hold recommendation as the coming earnings recovery is already well reflected into MAHB’s share price, in our view.

■ We raise our DCF-based TP to RM7.20, and raise FY23F core EPS forecast by 18%, on the back of stronger ISG international pax traffic assumptions.


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Emperador Inc (EMI SP)

1Q23: Robust Performance Led By Scotch Whisky


EMI reported strong 1Q23 PATMI growth of 10.5% yoy, largely driven by the Scotch whisky segment. Despite higher brandy segmental revenue, overall inflationary costpush continues to pressure brandy margins. EMI’s Scotch whisky segment outperformed on higher ASPs and demand. We think that EMI is fairly valued at current rich valuation levels given its premium market positioning and strong growth potential among its peers. Maintain HOLD with the same PE-based target price of S$0.57.


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Press Metal Aluminium Holdings (PMAH MK)

1Q23: A Soft Start To The Year; Negated By A Better Cost Structure


Results came in below expectations. Cut 2023-24 earnings by 22%/15% to account for lower all-in aluminium price assumptions. While LME aluminium prices could remain soft with the subdued economic environment, improving cost structure with a stronger US dollar could buffer for the shortfall. Every US$100/tonne increase to our conservative LME aluminium price assumption of US$2,450/tonne could increase PMetal’s earnings by 16% in 2023. Maintain BUY. Target price: RM5.50.


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Property - Overall

Dragged by stagnant office vacancy rates


■ We expect HK Grade A office vacancy to stay at c.13% for the rest of 2023F and 2024F, due to weak take-up and upcoming new completions.

■ We estimate a 5-10% decline in HK office spot rents in 2023F, followed by a 3-5% decline in 2024F, on the back of fewer office completions in 2024F.

■ We retain our cautious view on the HK office segment, with Champion REIT as the least preferred HK office landlord due to its large HK office exposure.


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Alliance Bank Malaysia (ABMB MK)

4QFY23: Boosted By Lower Provisions


Alliance Bank reported 4QFY23 earnings that were in line with expectations. Earnings were largely supported by lower provisions, higher forex income and above-industry loans growth. However, negative operating JAWS and qoq NIM compression impacted the sequential earnings trend. Maintain BUY with a lower target price of RM3.90 (0.85x FY24 P/B, 9.2% ROE) after earnings revisions. Valuations remain attractive at -1SD to its historical mean P/B. 


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