| CGS CIMB |
CGS CIMB |
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Singapore Post Ltd Reviewing sustainability of postal services
■ SingPost announced today that it is working with IMDA on a review of its Singapore postal business to ensure long-term commercial sustainability. ■ Key discussion points include postage rate adjustments, as well as costs and operating model review, including optimisation of post office network. ■ We see this as a step in the right direction, helping near-term share price sentiment given its post and parcel segment is loss-making. Reiterate Hold.
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Astra International Regaining its automotive mojo
■ Astra International is one of our top picks among Indonesian large caps, given its 17% upside potential to our TP and 4.3% dividend yield in FY23F. ■ Toyota’s aggressive new model pipeline could lift Astra’s auto volumes and margins in FY23F, in our view. We do not see EVs as an immediate threat.
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UOB KAYHIAN |
UOB KAYHIAN |
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Quarterly ASEAN Outlook Gingerly Seeking Value And Diversification As Near-Term Headwinds Mount
There are near-term headwinds as regional markets grapple with higher interest rates and bond yields. Growth in ASEAN is supported by a shift of supply chain to ASEAN. BUY reopening plays CLAS (Target: S$1.39), MAHB (Target: RM7.53) and RFMD (Target: S$1.90). BUY defensive consumer staples BAT (Target: RM14.40), CPALL (Target: Bt78), KLBF (Target: Rp2,400) and OR (Target: Bt29.00). BUY yield plays BMRI (Target: Rp5,750), OCBC (Target: S$17.50) and SCB (Target: Bt244).
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Shipping And Ports – China Weak Global Trade Outlook More Than Priced In
Recent economic indicators point to a subdued 2H23 global trade outlook. However, we think the global trade weakness is more than priced in by the cheap valuation of our port and container shipping coverage. CSH’s preliminary results guidance significantly beat our expectations, implying that container shipping players’ earnings may stabilise at levels better than our previous projections. Maintain MARKET WEIGHT. Top picks: CSH (1919 HK/BUY/Target: HK$9.71) and CSP (1199 HK/BUY/Target: HK6.65).
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| LIM & TAN | LIM & TAN |
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Grand Banks Yachts (S$0.310, unchanged) announced that it would expand its production facility in Malaysia by more than 25% to handle bigger luxury boats, increase capacity and accelerate boat-building activities. The expansion, which will cost approximately MYR30 million (S$9 million), is expected to be completed by August 2024. GBY’s market cap stands at S$57.2mln and currently trades at 6.3x forward P/E and 0.9x P/B, with a historical dividend yield of 1.6%. We see positives in its 1) strong order book of S$178.0mln which provides revenue visibility for 1.5-2 years, 2) margins expansion to mitigate inflationary pressures, 3) net cash position of S$34.9mln in this current economic climate, and 4) potential doubling of dividends to 1.0 S cts for FY23F as GBY achieved its highest 9-month net profit in more than a decade. Going forward, we continue to anticipate margin acceleration over the next few quarters as GBY benefits from a 15% increase in boat base prices. We maintain a BUY recommendation on Grand Banks Yachts.
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Singapore Post ($0.48, up 2.5 cents): Channel News Asia reported that with more people opting to communicate online instead of through letters, the government will consider allowing Singapore Post to “introduce postage rate adjustments” in the future, said Senior Minister of State for Communications and Information Tan Kiat How. Singapore Post’s market cap stands at $1.1bln and currently trades at 21x forward PE and 1.0x PB, with a dividend yield of 1.3%. Consensus target price stands at $0.5, representing 6.4% upside from current share price. Having continuously faced challenges in the mail division, Singpost is trying to transform into a key global logistics player and trying to do a potential sale of non-core assets as management is trying to look at strategic initiatives to future proof the company. With this added likelihood to “introduce postage rate adjustments … of a sufficient degree” that should feed into Singpost’s recovery in addition to their initiatives, we thus upgrade Singpost to “ACCUMULATE”. |
