| UOB KAYHIAN |
UOB KAYHIAN |
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Food Empire Holdings (FEH SP) Seeing What’s Brewing In Vietnam Makes Us More Optimistic
We visited FEH’s office and manufacturing facility in Vietnam to learn more about its market presence and production capabilities. We also witnessed its strong distribution network in both general trade and modern trade, supported by a 930-strong sales team. With the influence of macro factors, increased promotional activities and new product launches, FEH has room for growth in the Vietnam market, despite being a top 3 player with a 14% market share. Maintain BUY with a target price of S$1.36.
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Hong Kong Exchanges and Clearing (388 HK) August Headline ADT Sluggish
The headline ADT in Aug 23 was on a downward trajectory with a 0.5% mom decline, due to the pessimistic sentiment on China’s economic outlook. The potential stamp duty cut may boost market turnover in the short term but a significant improvement on China’s economic fundamentals is necessary to encourage a more substantial ADT recovery. As such, we continue to expect HKEX’s earnings to be supported by a robust NII. Maintain BUY. Target price: HK$380.00.
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UOB KAYHIAN |
LIM & TAN |
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Airports of Thailand (AOT TB) Another Key Beneficiary Of Thailand’s Tourism Recovery
We expect AOT’s 4QFY23 earnings to continue to rise yoy and qoq, underpinned by: a) 12% qoq growth in international passenger numbers, and b) adjustment of concession revenue. We cut 2023 earnings by 8% to reflect the slow recovery of Chinese visitors but maintain 2024 earnings with an assumption of 140m passengers. AOT is another key beneficiary of Thailand’s tourism recovery. Maintain BUY. Target price: Bt83.00.
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The Land Transport Authority (LTA) is undertaking a review of the Point-to-Point (P2P) industry structure and regulatory framework, to ensure their continued relevance as commuter needs and the industry structure evolve.
We think that this may be eventually beneficial to ComfortDelGro ($1.26, down 1 cent) as the changes drive stability towards the P2P industry such as reducing the demand-supply mismatch of drivers and riders during the day and late-night hours, or enhancing the process of P2P services so that the P2P community (both drivers and riders) would be better off compared to the current situation. CDG’s market cap stands at S$2.7bln and currently trades at 15x forward PE and 1x PB, with a dividend yield of 3.8%. Consensus target price stands at |
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Frencken Group Ltd (FRKN SP) Accumulate for FY24E
Maintain BUY with a higher TP of SGD1.27 With key customers ASML and AMAT raising their revenue forecasts, we believe Frencken’s Singapore and Malaysia factory utilisation should benefit from a recovery of orders in FY24E, especially when ASML is also shifting some of its production from Europe to Malaysia. We think Frencken’s performance likely bottomed in 1Q23 in line with management guiding for higher semi-con revenue in 2H23, signalling the worst is possibly over. We are now more confident of a stronger FY24E, and maintain BUY with a higher TP of SGD1.27 (+31%), based on 11x from 9x FY24E PE. We also raise FY24E PATMI by 8.5% on better margins due to higher operating leverage and better utilisation across SEA factories.
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CPN Retail Growth REIT (CPNREIT TB) Our favourite yield play
Reiterate BUY with a higher TP of THB11.8 We reiterate BUY on CPNREIT due to 10-11% dividend yields over the next 12 years (FY23-34E), 8.1% IRR, and NLA-weighted average lease duration of 22 years (including upcoming lease extensions). We raise our DCF-based TP to THB11.8 from THB11.0 after trimming WACC to 5.6%. Potential rerating catalyst is strong 4Q23 net investment income (+14% YoY, +9% QoQ)
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