buysellhold july.23



Apple Inc. suffered its worst stock decline in a month following a report that Chinese government agencies have barred staff from using the iPhone and other foreign-branded devices at work.

Employees at “some” central government regulators received instructions via chat groups and in meetings to stop bringing such gadgets into the office, said the Wall Street Journal, citing people familiar with the matter. It’s not clear how widely the orders were issued, the newspaper added.

Locally, Nanofilm ($1.04, down 0.01) is a key supplier of Apple and prospects will likely be negatively impacted as a result. Besides, Nanofilm also trades at expensive valuations with Forward PE at 27x (based on Bloomberg consensus estimates), price to book of 1.8x and dividend yield of only 1.4%. Bloomberg consensus 1 year target price of 97 cents, implies potential down-side of 7% from current level. We maintain “Avoid” Nanofilm.



Seatrium Ltd

Visit to FLNG vessel Gimi


■ We recently visited STM’s latest FLNG vessel, Gimi, at its Benoi shipyard in Singapore. Gimi is STM’s second FLNG conversion project for Golar.

■ After delays in its delivery schedule due to setbacks in charter deals and the impact from Covid-19, Gimi is finally set to sail in early-Oct 23.

■ Golar is looking at another FLNG conversion (Fuji), but we think STM can cherry pick its projects to focus on high-return ones given the tight capacity.

■ Maintain Add and TP of S$0.19. Rerating catalysts: sizeable order wins, return to profitability, strategic review communication by 4Q23F. 



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Tenaga Nasional

Starting to deliver on RE ambitions


■ TNB expects its RE capacity to increase by 33% over the next 18 months based on projects on hand, taking it a step closer to achieving its 2025 target.

■ We view the earnings setback from negative fuel margins in 1H23 as transient in nature and expect the drag to narrow in 2H23F.

■ TNB remains one of our top picks and key beneficiary of the National Energy Transition Roadmap (NETR). Reiterate Add with DCF-based TP of RM12.00.



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Digital Core REIT (DCREIT SP)
Overcoming Resistance As Cyxtera Is Rehabilitated

DCREIT’s second-largest tenant Cyxtera has resumed payment of rents since July and is on track to emerge from the court-supervised chapter 11 bankruptcy restructuring by fall of this year (4Q23). Cyxtera reported growth in EBITDA of 10.7% yoy in 2Q23. DCREIT’s inclusion in FTSE EPRA Nareit Global Developed Index will enhance trading liquidity. DCREIT provides a distribution yield of 6.5% for 2023 (KDCREIT: 4.8%, MINT: 6.1%). Maintain BUY. Target price: US$0.73.




Travel & Leisure - Overall

Visa requirement may be lifted for Chinese


■ A temporary tourist visa exemption for Chinese tourists could give a strong boost to Thailand’s foreign tourist arrivals in 4Q23F.

■ We expect AOT, ERW, SPA and CENTEL to benefit the most from the potential visa exemption for Chinese tourists.

■ We anticipate new stimulus measures to be announced after the first cabinet meeting which is likely to take place in early-Sep 23, in our view.



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7-Eleven Malaysia Holdings

Steady expansion to drive growth in FY24F


■ We remain neutral on SEM post its 2QFY23 results briefing, as we expect its decent CVS growth to be dragged by its Caring segment in the near term.

■ However, we are encouraged by SEM’s measured approach in its 7-café store expansion and plans to enhance its operational efficiency.

■ Reiterate Hold, with an unchanged TP of RM2.10 (26.7x CY24F P/E)



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