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CGS CIMB |
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Sunny Optical Technology 2H23F shipments recovery on track
■ Sunny reported strong Sep 23/3Q23 shipments in all key product segments: handset lens sets (HLS), camera module (HCM), and vehicle lens sets (VLS). ■ HLS/HCM/VLS shipments -11%/+3%/+22% yoy in Jan-Sep 23. We estimate HLS/HCM/VLS shipments to rise 0%/10%/22% yoy in FY23F. ■ Reiterate Add. Our TP of HK$88.0 is based on 24x FY24F P/E.
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CP All Performance remained strong
■ We estimate CPALL’s 3Q23F net profit was strong although net profit contribution from CPAXT was likely below our previous forecast. ■ Reiterate Add and TP of THB76.50. Convenience store performance remained robust Although 3Q23F net profit contribution from 60%-owned subsidiary CP Axtra (CPAXT) was likely smaller than our previous estimate (see our latest report on CPAXT), we keep our forecast for CP All’s (CPALL) net profit relatively unchanged; we expect decent CPALL 3Q23F net profit of THB4.16bn (+13% yoy, -6% qoq), thanks to stronger-than-expected convenience store (CVS) performance. While we estimate CVS’s SSSG cooled from +7.9% in 2Q23 to +3% in 3Q23F, due to a higher base from the reopening of Thailand’s borders in May 2022, product gross margin likely expanded by 50bp yoy to 27.1% in 3Q23F, higher than our previous forecast of 26.8%). We believe product gross margin will stay at this level going forward, on the back of wider food margins from higher ASP and a more favourable mix of non-food sales (less low-margin cigarette sales). CPALL is expected to release its 3Q23 results on 10 Nov.
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UOB KAYHIAN |
UOB KAYHIAN |
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ISOTeam (ISO SP) Niche Contractor With Earnings Turnaround And Beneficiary Of Singapore Election
ISOTeam is a leading contractor of maintenance works in Singapore with a turnaround in net profit in FY23 of S$1.4m, after three years of losses. It achieved a record orderbook of S$194m in FY23 and we expect this to grow from more government contracts for maintenance works, ahead of the upcoming election. ISOTeam’s resumption of dividend could provide about 6.2% yield for FY25. It is trading at 7x FY24F and 5x FY25F PE, based on Bloomberg consensus estimate.
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Automobile – China Weekly: PEV Sales Up 22-23% yoy/4-6% mom In September, In Line
China’s PEV wholesale shipment and retail sales grew 22-23% yoy and 4-6% mom to record highs of 831,000/743,000 units respectively, in line with estimates. ICE-car wholesale shipment spiked 12% mom in Sep 23, outpacing PEV, as OEM pushed inventories to dealers at big promotional discounts to attain 3Q23 sales targets. EV companies’ insurance registrations fell 30% wow in the first week of October due to the Golden Week. Maintain UNDERWEIGHT. Top picks: BYD, CATL and Li Auto.
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LIM & TAN |
MAYBANK KIM ENG |
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Keppel Corp’s ($6.76, up 0.10) private fund, the Keppel Education Asset Fund (KEAF), is expanding its quality portfolio with the acquisition of two education assets in Sydney, Australia, at an aggregate purchase price of approximately A$198 million (approximately S$175 million). This would bring Keppel’s portfolio to A$4.8 billion (S$4.3 billion) of assets in Australia upon completion of both acquisitions. We like the educational exposure that Keppel is targeting to build up in Australia as this sector is seen to be highly defensive and demand is rather inelastic helping to counter the cyclical exposures of Keppel’s other businesses. After the Covid-19 pandemic and lockdowns, Keppel sees emerging signs of recovery and would be capitalizing on the rebound of the educational business in the Australian market with these latest acquisitions. It would help to build up longer-term recurring and defensive income streams for the company. At $6.76, Keppel is capitalized at $11.9 billion and trades at undemanding PE of 12x, 5% yield and Bloomberg consensus target price of $7.87, implies a potential 1-year return of 17%. We maintain “Accumulate” rating on Keppel.
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Singapore Banks 3Q23: What to expect
Slowing more. Asset quality benign. NEUTRAL UOB is set to report 3Q23 on 26 Oct, DBS 06 Nov and OCBC 10 Nov. We expect slowing NII. NIMs should be supportive, but could be partly offset by weak loans. Fees are unlikely to provide much growth with wealth management still in the doldrums. While asset quality should remain benign, we expect increasingly cautious guidance and a potential uptick in cautionary provisions. On the other hand, dividend guidance is likely to keep to an optimistic tone, especially with further capital releases with BASEL IV in 2024E. UOB could marginally surprise on the upside from stronger ASEAN consumer growth, but need to watch FX translation.
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