buysellhold july.23

PHILLIP SECURITIES

CGS CIMB

City Developments Limited

Buying back shares

 

 No financials were provided in this operational update. The launch of Lumina Grand was well received, with 381 units (74%) sold to date. Hotel operations continue to improve, with portfolio RevPAR growing 5.3% YoY to S$139.4.

 Bought back 13mn shares (1.4% of issued shares) since 8 March 2024 for a total consideration of S$76.4mn. In April 2024, CDL announced an off-market equal access scheme to buy back up to 30mn preference shares (10% of total) at an offer price of $0.78.

 

 

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SingTel

Yield and growth

 

■ Singtel's 2HFY3/24 core net profit of S$1.1bn met our forecast. FY24 core net profit of S$2.26bn formed 101.6% of our full-year estimate.

■ Singtel said in FY24 briefing that core dividend payout of low-80% is sustainable and VRD of S$0.03-S$0.06/share is over a 5-year horizon.

■ DPS could range S$0.15-0.18 in FY25F, yielding 6.3%- 7.6%, higher than 4.7% for MSCI Singapore. Maintain Add and SOP-based TP of S$2.84.

■ Cost optimisation, revenue growth and absence of Trustwave losses likely to result in Singtel hitting double-digit EBIT growth in FY25F, in our view. 

 

 

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CGS CIMB

UOB KAYHIAN 

Kossan Rubber Industries

Incremental improvement in 1Q24

 

■ 1Q24 EBIT was qoq better on higher volumes and steady margins. Core net profit was ahead of our estimate but in line with Bloomberg consensus.

■ We raise our FY24/25F EPS by 121%/19% as we project improved EBIT per 1,000 pcs, albeit still below FY16-19’s average even by FY26F.

■ While we lift our TP to RM2.07, we downgrade to Reduce as projected ROEs of c.5% by FY25-26F look abysmal relative to current P/BV of 1.6x. 

 

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Singapore Telecommunications (ST SP)

FY24: Results In Line, New Dividend Policy And Strategic Plan To Unlock Value

 

Despite currency headwinds, Singtel reported higher FY24 underlying net profit (+10% yoy), driven by increased contributions from regional associates and ongoing cost optimisation efforts. Optus continued to perform after the outage incident from price uplifts while Singtel Singapore suffered from weak sentiment. NCS booked higher order wins while the digital infraco segment was weighed down by investment costs. Backed by a lush FY25 dividend yield of 6.8%, we maintain BUY with a target price of S$2.99. 

 

 

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UOB KAYHIAN UOB KAYHIAN

Lenovo Group (992 HK)

4QFY24: Solid Results; AI PCs Are Just Around The Corner

 

Lenovo’s 4QFY24 results are solid, with a slight beat across all segments on both revenue and profitability. FY25 will be a backloaded year, as AI PCs and AI servers, the key sales and profitability drivers, should start contributing meaningfully by the December quarter, whereas the pace of recovery in the June and September quarters will be more gradual. Maintain BUY and raise target price to HK$13.50 as we expect a revaluation story with the rise of AI PCs, and their expanding exposure in AI servers.

 

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Xiaomi Corp (1810 HK)

1Q24: Strong Beat On IoT Margins; EV Shipment Target Raised

 

Xiaomi’s 1Q24 surprised on the upside, with adjusted net profit 18% above our estimate, driven by a surprise in the IoT business’ margins, as well as a stronger-thanexpected revenue for the internet service segment. For 2024, Xiaomi now targets to ship 120,000 units of EVs, and aims to improve its margins through product mix improvements. Maintain BUY. Target price: HK$23.80. 

 

 

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