buysellhold july.23



DBS Group

Rising risk-on sentiment


■ Delayed Fed fund rate cuts (DBS expects two in 2H24F) and further asset repricing should support stronger NIMs in FY24F. Loan growth could taper.

■ DBS guides for FY24F ROE to trend at c.17%. Release of excess capital supports dividend upside (via core/special or M&A), but timing is uncertain.

■ Reiterate Hold with a higher TP of S$35.90. While its c.6% yield is attractive, we think that sequential earnings growth over FY25-26F may be challenging.



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Cromwell European REIT

Portfolio transformation on track


■ 1Q24 DPU of 3.505 € cts (-10.2% yoy) missed at 23% of our FY24F forecast.

■ Divestments are the key driver of capital management, in our view.

■ Reiterate Add on CERT’s portfolio and capital management strategies. 



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Alpha Picks: A Softer Month; Add FEHT; Remove BAL And CLAS


For Apr 24, our Alpha Picks portfolio rose 0.4% mom on an equal-weighted basis, underperforming the STI slightly by 1.7ppt. It was a mixed performance from our portfolio with the top performers being MPM, BAL and CD while FRKN, LREIT and ST underperformed. Our Alpha Picks portfolio has outperformed the STI in three out of the past four months. For May 24, we add FEHT while removing BAL and CLAS.

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DBS Group Holdings (DBS SP)

1Q24: Accelerating Pace Of Returning Surplus Capital To Shareholders


DBS’ 1Q24 net profit of S$2,951m (+15% yoy) was significantly above our expectation. NIM expanded 2bp yoy and 1bp qoq to 2.14% due to repricing of fixed-rate assets at higher interest rates. Net interest income grew 7% yoy. Wealth management fees surged 47% yoy and treasury customer sales reached a new high. Management will continue to review DBS’ capital structure in view of returning more surplus capital to shareholders. Maintain BUY. Target price: S$40.70. 



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DBS Group Holdings Ltd

NII and Fee Income boost earnings


 1Q24 adjusted PATMI of S$2.96bn was slightly above our estimates due to higher NII, fee income, and other non-interest income offset by higher expenses. 1Q24 adjusted PATMI is 28% of our FY24e forecast. 1Q24 DPS raised 29% YoY to 54 cents

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CSE Global ($0.425, unchanged) announced that it secured S$186.2 million of new orders in the fi rst quarter ended 31 March 2024 (“1Q2024”). This represents a 16.7% year-on-year growth in new orders as compared to S$159.6 million in 1Q2023 and was mainly driven by stronger demand for Electrifi caƟ on and AutomaƟ on soluƟ ons in the Infrastructure and Energy industries. 

CSE Global’s market cap stands at S$285.0 mln and currently trades at 10.1x forward PE and 1.2x PB, with a dividend yield of 6.6%. Consensus target price stands at $0.61, represenƟ ng 43.5% upside to current share price. We conƟ nue to like that CSE Global will benefi t from their record order wins towards the end of last year as management believes that the normalizaƟ on of their supply chain should allow them to execute and accelerate the delivery of their orders. Their businesses are also plugged into the current “Hot” sectors such as data centers, oil & gas, mining & minerals and serving the governments in Singapore & Australia (infrastructure segments). Management is confi dent that 2024 will be a growth year and consensus is expecƟ ng another 25-30% growth this year aŌ er last year’s 100% growth rate. We see potenƟ al for upside earnings surprises given the strong order momentum, Maintain “ACCUMULATE”.

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