buysellhold july.23



Property Investment

Monthly retail sales declines to moderate


■ HK’s retail sales value declined by 11.5% yoy in May 24. In 5M24, sales value was down 6.1% yoy.

■ We revise our projection for 2024F retail sales to a 6% yoy decline, and expect narrower yoy declines in monthly sales in the next several months.

■ Stay Neutral rating for HK property. Link REIT is still our top pick among HK landlords, with an attractive 8.8% FY3/25F DPU yield. 


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Sunway Bhd

Strategic land sale in Johor for a data centre


■ Sale of 64-acre land in Johor to Equalbase at RM136 psf for a data centre.

■ Price is comparable to recent transactions; more importantly, it exhibits the deep embedded value of its 1,770 acres of land in Johor.

■ Reiterate Add and TP of RM4.40 (based on SOP).



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REITs – Singapore

S-REITs Monthly Update (Jun 24)


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 S-REITs are trading at attractive distribution yields of 6-7%. We have 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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Plantation – Malaysia

2H24 Outlook: Anticipate Higher CPO Prices Due To Tighter Palm Oil Supplies


We expect higher CPO prices in 2H24 due to tighter supplies and gradually returning demand as palm oil regains its pricing competitiveness. This can be further supported by lower production due to unfavourable weather in 2H23 and 1Q24, along with recovering demand, as Indian and Chinese palm oil inventories have been trending downwards. Maintain OVERWEIGHT and pick companies with good growth prospects and dividend yields.



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We initiate a “BUY” recommendation on Mermaid Maritime ($0.19, down 0.5 cent) with a target price of $0.30 based on 12.5x FY24PE, pegged to 15% discount to its peers. MMT boasts one of the world’s largest DSV fl eets and is a turnaround company strategically positioned to capitalise on the rising demand for decommissioning and IRM projects amidst higher oil prices and global sustainability initiatives. With high operating leverage due to their big fl eet size amidst an industry upcycle, MMT has hit critical mass, and we expect further increases in revenue to signifi cantly contribute to their bottom line. 

Mermaid’s market cap stands at S$268.5mln and currently trades at 8x forward PE and 1.1x PB. Our target price stands at S$0.30 and we have a BUY recommendation on MMT.








We highlight the key points from Valuetronics’ ($0.64, unchanged) just released FY ended March’24 annual report:

The financial year that ended 31 March 2024 (“FY2024”) marked the success of Valuetronics’ customer diversification strategy. During the year, we expanded our portolio with two customers in new product categories that are very different from our existing ones. These new additions rebalanced our portolio to include products of very different nature and I believe it sets the stage for our next phase of growth. Our strategic decision to expand our manufacturing footprint and set up the Vietnam Campus played an important part as the diversification solutions attracted strong interest from existing and potential customers. With campuses in different territories, Valuetronics is now positioned as an EMS provider with a footprint across Asia. We off er an alternative to customers looking to diversify their supply chains to mitigate challenges arising from protracted geopolitical events as well as ongoing US-China trade tensions. 

At its last traded price of 64 cents, Valuetronics is capitalized at $262mln. Its net cash position of close to $200mln accounts for a signifi cant 76% of its market cap, allowing the company to safely navigate the higher for longer interest rate environment, to fund its strong dividend track record, share buy back program as well as continued expansion plans to serve both new as well as exisƟ ng customers. Consensus is expecting another 10% growth in profi t of $30mln, translating to an undemanding forward PE of 9x and excash PE of only 2x. Trading at an aƩ racƟ ve div yield of 6.6% and with Bloomberg consensus 1 year target price of 77 cents represenƟ ng a potential upside of 20%, we maintain an “Accumulate” rating on Valuetronics (downside is likely to be supported by its on-going share buy back program).

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