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CGS CIMB |
MAYBANK KIM ENG |
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Sunway Bhd Likely rerating leading up to listing of SHG
■ We reiterate our Add call and raise our FY24-26F EPS and TP to RM4.40. ■ We believe the sweet spot for SHG’S IPO is FY26F. Looking at Suncon’s IPO, we believe Sunway will see a re-rating leading up to the listing of SHG. ■ Increased visibility with FBM KLCI inclusion and potentially MSCI Malaysia.
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Civmec Ltd (CVL SP) Order book boost
Secures AUD174m of contracts; Retain BUY Civmec recently secured AUD174m worth of new contracts and scope extensions for fabrication, manufacturing, construction and maintenance work across a range of sectors in Australia. This is positive and should help to replenish its AUD821m order book (as at end-Mar 2024). We maintain our EPS forecasts and TP of SGD1.05, still based on a target 10x FY25E P/E. At current levels, we think dividend yield of 6.5% is still attractive. Maintain BUY.
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MAYBANK KIM ENG |
PHILLIP SECURITIES |
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Singapore Telecommunications (ST SP) NDR takeaways: multiple catalysts and dividend clarity
Reiterate Buy We hosted Singtel’s management on a non-deal roadshow (NDR) in Bangkok. Following are our key take-aways.
Potential for Singapore mobile consolidation? Management noted that Singapore has 4 facility based mobile operators and 11 MVNOs, which is highly crowded for a city state of 5m. It said there remains potential for mobile consolidation and, based on the experience of regional markets, consolidation could help to alleviate competition and improve ARPUs. That said, Singtel is unlikely to drive consolidation given its dominant market share of 46%. Management sees the upcoming 700MHz spectrum payments (auctioned in 2017) as a potential trigger point for consolidation as payment required from Starhub and M1 are ~SGD190- 280m each, which is a material outgo relative to their cash flows while 5G spectrum is already built-out (there is limited need for more spectrum in our view).
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Phillip 3Q24 Singapore Strategy Seizing the yield
SINGAPORE | STRATEGY 1 July 2024 Review: Singapore's equity market rose 3.4% in 2Q24, the best performance in six quarters. Banks registered another commendable quarter. Attractive dividend yield and recovery in fee income drove share prices (Figure 1). Yangzijiang chalked up a stellar performance (Figure 2), with container freight rates surging 75% over three months. Seatrium's share price was spooked (Figure 3) by new investigations related to Brazil. This was despite securing multiple new contracts, including two FPSO contracts worth S$11bn. REITs remain a major laggard (Figure 4), weighed down by rising interest expenses. US equities, namely technology, continue to outperform against major asset classes (Figure 5).
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| UOB KAYHIAN | UOB KAYHIAN |
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REITs – Singapore Rate Cuts Coming But Not Too Much
S-REITs have weathered the sell-down caused by interest rates staying higher for longer. The easing of core PCE inflation in May 24 gave reassurance that rate cuts should commence as anticipated in 4Q24. Maintain OVERWEIGHT. Many blue-chip SREITs are trading at attractive distribution yields of 6-7%. We picked blue-chip S-REITs from a bottom-up basis: BUY FEHT (Target: S$0.77), KREIT (Target: S$1.15), LREIT (Target: S$0.85), MINT (Target: S$2.78) and MPACT (Target: S$1.73).
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STRATEGY – MALAYSIA Alpha Picks: Opting For More Adventurous Choices
Our Alpha Picks again beat the FBMKLCI in Jun 24 (+5.7% vs -0.4%). While we correctly guessed that FBMKLCI was entering a lull period in June, we decided to adopt more adventurous Alpha Picks for July. July picks: Bursa, Ekovest, Gamuda, Lagenda Mah Sing, MYEG, Pekat, PMetal, RGB and VSI. New inclusions are Ekovest and Pekat, which replace Bermaz Auto and Genting Malaysia.
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