buysellhold july.23



Sembcorp Green Hydrogen Pte Ltd, a wholly-owned subsidiary of Sembcorp Industries / SCI ($5.11, up 0.05), with Sojitz Corporation (Sojitz) and Kyushu Electric Power Co., Inc. (Kyushu Electric), have entered into a Memorandum of Understanding (MOU) to pursue potential opportunities for green ammonia production in India for export to Japan. 

The latest development validates and solidifies the thesis that SCI is indeed in a solid footing in their pathway towards transforming their portfolio from “dirty” to “clean” energy and that they will continue to be at the forefront of this transformation.

At $5.11, SCI is capitalized at $9.1 billion and trades at an undemanding forward PE of 9.7x and price to book of 2x. Based on 1 year Bloomberg consensus target price of $6.64, upside potential is around 30%. We thus maintain an “Accumulate” rating on SCI.


Dayamitra Telekomunikasi (MTEL IJ)

Expansion to continue in 2024


Growth trajectory intact

9M23 results are inline. We expect MTEL’s growth momentum to continue in FY24E, as it continues to expand its tower and fibre networks while its tenancy ratio improves (rising to 1.5x). In a high-interest rate environment, we expect MTEL to focus on value creation and be more prudent and strategic in inorganic expansion. We maintain our BUY call and TP of IDR950.



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Elite Commercial REIT / Elite REIT (GBP0.295, down 0.005), has announced the launch of a fully underwritten non-renounceable Preferential Offering (the “Preferential Offering”) to raise gross proceeds of approximately £28 million, which will be used mainly to repay debt and reduce gearing, thereby strengthening Elite REIT’s balance sheet as the Manager continues to execute its asset management strategies.

The Preferential Offering Units (the “Preferential Offering Units”), comprising 103,354,690 new units in Elite REIT, will be offered to existing unitholders at a ratio of 214 Preferential Offering Units for every 1,000 existing units in Elite REIT, and will be offered at an issue price of £0.27 per Preferential Offering Unit. The Preferential Offering issue price represents a discount of 10% to the volume weighted average price of £0.30 per Unit on 18 December 2023.

Elite Commercial REIT’s market cap stands at GBP142.5mln and currently trades at 0.6x PB, with a 11.8% projected yield. Consensus target price stands at GBP0.39, representing 30% upside from current share price


Sino-Thai Engrg & Construction

Restructuring amid weak near-term outlook


Trim estimates and TP; reiterate HOLD 

STEC is restructuring its business to clearly define its segments and support future growth. However, the near-term outlook appears challenging. The restructuring plan is expected to take time, particularly due to early-stage businesses incurring losses. We trim our FY23/24E profit forecasts by 3%/19%, anticipating a 25.9%/2.2% YoY decrease in profits. Consequently, we cut our FY24E target price to THB9.5 from THB11.5 based on its average PER of 24.0x and maintain our HOLD rating. STEC has cash, financial assets and investments of THB24.6b, surpassing its market value of THB13b and providing a cushion against downside risks. In the construction sector, we prefer CH. Karnchang (CK TB, CP THB20.3, BUY, TP: THB25.4) due to its high growth potential.



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Elite Commercial REIT

£28m Preferential Offering to lower gearing


 ELITE is set to raise gross proceeds of approximately £28mn at 0.27 pence for each Preferential Offering Unit, which represents a 10% discount to the volume-weighted average price (VWAP) of 0.30 pence per unit.

 The theoretical ex-rights price, calculated based on the current market price, stands at 0.286 pence. We recommend subscribing if the share price remains above 0.286 pence.

 We reiterate our BUY recommendation with an unchanged DDM-TP of 0.36 pence. Despite possible dilution in the near term. The strengthened financial position, achieved through reduced gearing, will provide a buffer against macroeconomic uncertainty.


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