buysellhold july.23



Japfa Ltd

Cost controls to mitigate poor ASPs


■ JAP recorded a core net loss of US$11.2m against our expected net profit of US$22.8m, affected by weaker ASPs across protein prices in Dec 23.

■ However, ASPs have trended upwards YTD, with management confident of a better 1H24F vs. 1H23, further boosted by better operational management.

■ We maintain our Add call with a slightly lower TP of S$0.26, pegged at a 50% discount to FY25F book value as JAP looks to return to the black in FY24F.


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PropNex (PROP SP)

2023: Weaker-than-expected Results With Dividend The Highlight


PropNex’s reported 2023 net profit of S$48m (-23% yoy) was lower than expected despite better sequential earnings seen in 2H23. The highlight of the result was a generous S$0.035 final dividend (1H23: S$0.025), which resulted in a 2023 payout ratio of 93% and implies a yield of 6.9% based on yesterday’s closing price. We expect 2024 to be relatively stable albeit at a lower level of profitability compared to its past. Maintain BUY. Target price lowered to S$1.04. 



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4Q23: Misses Expectations But Mid-term Prospects Intact


SEA’s 2023 net profit of US$163m was below our expectations, making up 81% of our full-year estimate. The 4Q23 net loss of US$91.4m was largely due to higher sales and marketing expenses (+132% yoy) for the e-commerce segment, offset by its revenue growth. We expect all segments to record growth in 2024, particularly the e-commerce segment as competition stabilises. Maintain BUY with a lower target price of US$63.35.



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We highlight the key points from PARAGON REIT’s ($0.82, unchanged) latest annual report release: PARAGON REIT (previously known as SPH REIT) posted a net property income (“NPI”) of S$215.1 million for FY2023, representing a 1.7% increase from the earlier 12-month period ended 31 December 2022 (“FY2022”). Tenant sales for our Singapore portfolio recorded a marginal 1.5% decline, while our Australia portfolio recorded a 6.8% increase compared to FY2022. PARAGON REIT remains committed to paying regular and stable distributions to our unitholders. For FY2023, the Board declared a distribution per unit (“DPU”) of 5.02 Singapore cents, a 9.1% decline compared to FY2022. DPU was impacted by the rising interest rate environment although PARAGON REIT registered a 1.8% improvement in gross revenue over FY2022. The DPU declared represents a yield of 6.1% based on the latest closing price of S$0.82.

At its last close of 82 cents, PARAGON REIT is capitalized at $2.33 billion and trades at 6.1% div yield 0.8x price to book and consensus target price of 95 cents implies a potential return of 16%. We recommend a HOLD on PARAGON REIT


City Developments Limited

Record revenue driven by property development


 FY23 PATMI of S$317.3mn (-75.3% YoY) missed our estimate by 15% due to higher-thanexpected finance costs (+73% YoY). The YoY decline in PATMI was largely attributable to the absence of outsized divestment gains from the divestment of Millennium Hilton Seoul (S$926mn) in FY22.



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