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UOB KAYHIAN |
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Aztech Global Ltd Revenue could cross S$1bn by FY25F
■ Aztech reported 3Q23 net profit of S$30.9 (+48.6% yoy, +4.7% qoq), 5% below our S$32.5m forecast. ■ 3Q23 net profit was reduced by a S$5.5m withholding tax. Excluding this, 3Q23 net profit would have been S$36.4m, 12% above our expectation. ■ Reiterate Add, with unchanged S$1.23 TP, as FY23F orderbook remains strong and management remains optimistic of FY24F growth opportunities.
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Aztech Global (AZTECH SP) 3Q23: Record-High Earnings Beat Expectations; Moderately Optimistic About Outlook
Aztech’s 3Q23 record-high earnings of S$30.9m (+48.6% yoy/+0.5% qoq) beat our forecast, with 9M23 forming 82% of our full-year estimate. IoT devices continued to be a key growth driver, driving an 11.1% yoy revenue growth. Orderbook remained healthy at S$322m as of 16 Oct 23, of which the majority is planned for completion in 2023. Amid the volatile environment, the outlook remains cautiously optimistic. Maintain BUY with an 11% higher target price of S$1.11 after raising our EPS forecasts.
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CGS CIMB |
UOB KAYHIAN |
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IGB REIT Occupancy and rental rate surpassed prepandemic levels
■ Reiterate Add rating, with an unchanged DDM-based TP of RM2.02, on high occupancy rate, positive rental reversion and strategic asset locations. ■ Occupancy rates for both MGM and TGM malls reached 99.9% in 3QFY23, surpassing pre-pandemic levels of 98.9%. ■ DPU of 2.6 sen takes 9MFY23 DPU to 7.8 sen, within our FY23F expectation of 10.31 sen. Stock offers FY23F-FY25F yields of 6.0-6.6%.
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Property – Malaysia A Study Trip To Iskandar Malaysia
We came away from our recent trip to Iskandar Malaysia (IM) feeling positive, having learnt of the mutual economic and societal benefits that could be reaped upon the full operation of the RTS by end-26, which could stimulate the growth in and around the JB City Centre. We opine that IWH Group and property-construction player Ekovest (BUY, Target: RM1.10) are clear winners for the IM theme, and from a more long-term perspective, we like Sunway (BUY, Target: RM2.38). Maintain MARKET WEIGHT.
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LIM & TAN |
LIM & TAN |
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The Board of Directors (the “Board”) of Food Empire Holdings Limited ($1.13, down 0.01) wishes to announce that the Company is currently exploring a proposal to seek a dual primary listing of its ordinary shares (the “Shares”) on the Main Board of The Stock Exchange of Hong Kong Limited (the “SEHK”) (the “Proposed Dual Primary Listing”). Based on its initial assessments and findings, the Board believes that a dual primary listing will potentially be beneficial to the Company as it provides the Company with access to two equity markets in Singapore and Hong Kong, a more diverse investor and shareholder base and additional sources of fund raising. Food Empire Holdings is capitalized at $598 million and trades at 9x FY23 forward PE ratio and price to book ratio of 1.6x. Based on last year’s 4.4 cents dividend payout (40% payout ratio), dividend yield is 3.9%. The stock has done very well this year, way outperforming the market by rising 78% (against a flattish STI) and based on Bloomberg consensus 1 year target price of $1.45, potential 12-month return is about 28.3% based on its last traded price of $1.13/share. Our check from Bloomberg shows that management’s claim of comparable fast moving consumer goods companies does indeed trade at higher PE multiples averaging near 15x despite the weakness in Hong Kong and China broad stock indices. However, we also note that those comparable companies have way bigger sales, profit and market capitalization compared to Food Empire and have different end market exposures compared to Food Empire which counts Russia/Ukraine/ Vietnam as key end market exposures for their end customers. Finally, we also note that the stock has done very well this year (already up 78% versus a flattish STI index) and further out-performance may be subject to the successful listing in Hong Kong.
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Aztech Global ($0.855, down 1 cent): The Business Times reported that Aztech Global has posted a 15.9 per cent increase in net profit to S$73.8 million for its first nine months ended Sep 30, 2023, up from S$63.7 million in the corresponding period of the year before. Earnings per share stood at 9.56 Singapore cents for the nine-month period, up from 8.25 Singapore cents from 9M 2022. Revenue for the first nine months of the year rose 10.7 per cent to S$672 million, from S$607 million a year ago. This was mainly driven by a year-on-year increase in sales of Internet of Things (IoT) devices and data-communication products, said the company in a business performance update on Monday (Oct 16). For Q3 alone, the company posted a net profit of S$30.9 million, an increase of 4.7 per cent from the previous quarter; and revenue jumped 24.8 per cent to S$283.4 million from S$227 million in Q2. Shares of Aztech Global closed S$0.01 or 1.2 per cent lower at S$0.855 on Monday, ahead of the announcement, according to The Business Times. At $0.855, market cap of Aztech Global is $669mln, FY22 P/E is 9.9x, current P/B is 2.1x and dividend yield is 8.7% |
