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MAYBANK KIM ENG |
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Retail Slow consumption during high season
■ Domestic consumption in 4Q23F appears weaker than our initial estimate. ■ Discretionary spending slowed yoy in Oct-Nov 23, while food sales continued growing. ■ CPALL and DOHOME are our top sector picks.
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Traders’ Almanac Technical Trading Ideas: Softer selling pressure in blue chips
AJI – BUY, SL: MYR15.50, R1: MYR17.10, R2: MYR18.50 BURSA – BUY, SL: MYR6.60, R1: MYR7.10, R2: MYR7.50 PTRB – BUY, SL: MYR0.460, R1: MYR0.560, R2: MYR0.645 CRUDE PALM OIL – “Hammer” within support, rebound ahead KLCI INDEX FUTURES – Selling pressure persists
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LIM & TAN |
MAYBANK KIM ENG |
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Venture Corp (S$13.10, down 19 cents): Global semiconductor revenue is projected to grow 16.8% in 2024 to total US$624 billion, according to the latest forecast from technological research and consulting firm Gartner Inc that was released earlier this week. In 2023, the market is forecast to decline 10.9% and reach US$534 billion. “ We are at the end of 2023 and strong demand for chips to support artificial intelligence (AI) workloads, such as graphics processing units (GPUs), is not going to be enough to save the semiconductor industry from double-digit decline in 2023,” said Alan Priestley, VP Analyst at Gartner. “Reduced demand from smartphones and PC customers coupled with weakness in data center/hyperscaler spending are influencing the decline in revenue this year At S$13.10, market cap for Venture Corp is S$3826mln, FY22 P/E is 10.4x, current P/B is 1.4x, dividend yield is 5.7% and its present net cash position of S$956.5mln equates to around 25% of current market cap. Riding on the forthcoming upturn of the overall semiconductor industry which is slated to take place next year, we thus recommend “Accumulate” on Venture Corp in anticipation of its earnings recovery in FY24 while its strong balance sheet and high dividend yield are also positive attributes.
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ITMAX System Bhd (ITMAX MK) Solidifying its competitive advantage
Much to look forward to in FY24E; BUY maintained Future contract win rate probability remains favourable, as we believe that ITMAX maintains a significant cost, security and technical advantage over its peers in the domestic smart city space. Our forecasts, BUY rating, and TP of MYR2.10 are maintained. Our TP is pegged to 24.4x FY24E PER, a 20% premium to the simple PER average of its comparable peers.
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| UOB KAYHIAN | |
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Offshore Marine – Singapore 2024 Outlook Remains Bright
While demand for offshore marine assets remains strong, the offshore wind sector has been beset by negative sentiment in the US East Coast whereas Europe remains strong and stable, in our view. Our positive investment thesis for STM (Seatrium) centres around capacity constraints for quality global shipyards that can deliver offshore projects at scale, especially given the current cycle which we expect to be long in duration and resilient. Sector rating: OVERWEIGHT.
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