buysellhold july.23



Sembcorp Industries - Renewables to be the key earnings driver
Recommendation: ACCUMULATE (Maintained) Last Done: S$5.48
Target Price: S$6.00

  • FY23 net profit was 3.3% higher than our estimates. Growth was driven by renewables (+41.8%), gas and related services (+30.1%) and maiden interest income from deferred payment note (DPN) in exchange for the sale of the Indian coal power plant. 2H23 net profit, at S$412mn, was 22.3% lower than 1H. 
  • FY24e net profit is expected to fall due to major maintenance for 60 days at the Singapore power plant (we estimate S$66mn impact) and the handover of the Vietnam Phu My 3 power plant in Feb 2024. 
  • Maintain ACCUMULATE and TP of S$6.00. We are also maintaining our FY24e net profit estimate. Energy sales and infrastructure services form a stable and visible income stream for the group. Renewable energy will drive earnings growth in FY25e, whose share of net profit could grow to 31.8% in FY25e, from 21% in FY23.

Sasseur REIT | Revving all engines
ADD - Maintained
Mkt.Cap:US$633.00m | Avg.Daily Vol:US$0.28m | Free Float:42.20% 

■ 2H/FY23 DPU of 2.927/6.249 Scts were in line with our FY23F forecasts.

■ Robust tenant sales in FY23 drive organic and acquisition growth potential.

■ Reiterate Add, with an unchanged DDM-based TP of S$0.95




Dyna-Mac (DMHL SP) On the fast track
Lift TP to SGD0.42 from SGD0.38

Dyna-mac, one of our SMID conviction picks, reported strong FY23 NPAT of SGD28.69m, up 114% YoY and 39% above our of SGD20.7m forecast. This was driven by a rise in project volumes and improved productivity, tighter cost control and lucrative margins for new orders won. Management will need to reconfigure its production layout with its new land capacity to further improve productivity.

This will allow third party warehousing, logistics and more ad-hoc jobs can to be done in-house, further improving margins. We remain bullish on the FPSO outlook and Dyna-mac to be a key beneficiary of this multi-year upcycle. We lift our FY24/25E PATMI by 31% and 34%, and raise our TP to SGD0.42 from SGD0.38, pegged to 15x FY24E P/E from 16.5x, which has accounted for warrant dilution.

Read more .... 

iFast Corp

In 2023, the Group’s net profit increased by 340.0% YoY to S$28.3
million, on the back of a 22.8% increase in the Group’s total revenue
to S$256.5 million. The increase in profitability was driven by initial
contributions from the ePension division of the Group, as well as
improvements in the Group’s core wealth management platform

iFast Corp’s market cap stands at S$2.34bln and currently trades at

44x forward PE (down from 88x) due to expected doubling in profits
and 10x PB, with a dividend yield of 0.6%. Consensus target price
stands at S$8, representing limited upside from current share price.

While prospects are bright based on robust growth guidance by
management, valuations look more than fair at current level and
upside also looks limited based on consensus target price of $8.
HOLD for now.

SASSEUR REIT - Resilient balance sheet and low onshore rate
Recommendation: BUY (Maintained), Last Done: S$0.69
Target price: TP: S$0.87

  • FY23 rental income in SGD terms was within expectations (S$ 126.7mn, +0.6% YoY, +10.7% YoY in RMB. DPU was within our expectation at 6.25 Singapore cents for the whole year, representing a 4.6% decline YoY due to RMB depreciation of 7% in FY23. Keeping the exchange rate the same, DPU would have increased by c.4.1% YoY. SASSR retained 7% of distributable income mainly for the repayment of onshore RMB loans.
  • Outlet sales in RMB were in line with our projection. It spiked 31.9% YoY to RMB4.6bn, leveraging on the consumption downtrading and various promotional events in FY23. 
  • We reiterate our BUY recommendation with a lower DDM TP of S$0.87 (prev. S$0.90) on the back of a fading recovery tailwind and weaker-for-longer exchange rate. FY24e- FY25e DPU forecasts have been lowered by 2-3% to 6.36-6.67 Singapore cents. SASSR is trading at 9% of FY24e forward dividend yield.



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Singapore Airlines (SIA SP) 3QFY24: Results Miss Mainly On Cost Pressure

SIA’s 3QFY24 headline net profit of S$659m (+4.9% yoy, -6.8% qoq) came in below our guided range of S$670m-810m, even though 3QFY24 was already helped by some oneoffs such as tax credit and disposal gains.

The miss was mainly attributable to higherthan-expected costs, as well as slightly weaker-than-expected cargo yields. Forward ticket booking is healthy but yields for both pax and cargo operations could be under pressure. Maintain HOLD on SIA, with a lower target price of S$6.28. 


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