| MAYBANK KIM ENG |
MAYBANK KIM ENG |
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ComfortDelGro (CD SP) On the move
Raise FY24-25E forecasts and TP; maintain BUY To our surprise, CD raised its taxi booking commissions by 2ppt to 7% wef 1 Jan 2024 despite competition from peers, while making the existing 10% rental waiver permanent for its drivers. Last month, it also announced that it is acquiring taxi network operator A2B Australia for AUD165.1m. We are generally positive on both moves and have raised our FY24-25E EPS by 2- 3%, mainly due to higher Taxi EBIT contribution. Retain BUY with a higher DCF-based TP of SGD1.60 (8.3% WACC and 0.5% long-term growth).
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Thailand Energy Sector Year Ahead 2024: Resilient earnings, attractive valuation
BCP and PTT remain our Top Picks We remain POSITIVE on the Thai energy sector given its resilient earnings outlook and attractive valuation. We forecast flattish aggregate earnings for the sector in FY24E followed by strong 13% growth in FY25E. At the same time, valuations remain attractive with average sector P/BV of 0.79x, well below its 10-year average of 1.14x. BCP remains our Top Pick on its gross refining margin (GRM) outperformance, potential upside risk from synergies, and lower P/E (5.5x) in the sector. We also like PTT for its earnings growth outlook and valuation discount, especially when compared to PTTEP. We upgrade our FY24E earnings for TOP by 55% and raise our TP to THB60 as we factor in lower cost associated with oil spill (from USD2/bbl to USD1/bbl in FY24E). The TP upgrade also incorporates the impact of rolling over our target price to end-2024E.
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LIM & TAN |
LIM & TAN |
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Tiong Woon Corporation / TWC ($0.46, unchanged) reported that its wholly-owned subsidiary, Tiong Woon Project and Contracting Pte. Ltd., has been awarded a contract by Sinohydro Corporation Limited (Singapore Branch) (“Sinohydro”) for the provision of crane services for the upcoming construction of the Integrated Waste Management Facility (“IWMF”) project in Tuas, Singapore. We have already seen that a single semiconductor project completed by SGX listed Hiap Tong Corp HTC could see a surge in their profitability last year from merely $1mln to $14mln. We note that TWC will be involved an even bigger semiconductor project than HTC this year, on top of the upcoming IWMF project as well as the rapid build ups of HDB projects and its regional growth plans. As a result, it is understandable that TWC for the first time in many years have turned optimistic about their growth prospects, turning positive, from cautious previously. We thus maintain an “Accumulate” rating on TWC.
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Daiwa House Logistics Trust / DHLT ($0.655) announced the acquisition of D Project Tan Duc 2 (“Property”), a built-to-suit cold storage facility located in Long An Province, Vietnam. The Property was recently completed in September 2023 and is fully leased to a company which specialises in frozen and chilled food transportation services, for 20 years from October 2023. The Property will be acquired via the acquisition of 100% of capital in a company incorporated in Vietnam which is indirectly wholly owned by Daiwa House Industry Co., Ltd. (“Sponsor”). At 66 cents, DHLT is capitalized $456mln and trades at 0.8x book, 8% dividend yield and consensus 12 months target price is 80 cents. The acquisition makes strategic sense to help diversify geographical risk as well as gain entry into a fast growing SE Asian market at a discounted price and is also earnings accretive. Since our last “Accumulate” recommendation on DHLT in Nov’23, the stock price has appreciated a significant 27%, but based on 1 year consensus target price of 80 cents, there is still a decent upside ahead, while valuations at 8% yield and 0.8x price to book is still decent. Hence, we maintain our “Accumulate” rating on DHLT. |
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