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UOB KAYHIAN |
UOB KAYHIAN |
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Singapore Airlines (SIA SP) Jun 24 Operation Data In Line; Expecting Earnings Moderation In 1QFY25
SIA’s Jun 24 pax and cargo data were largely in line with our expectations, with pax and cargo loads standing at 99.5% and 94.5% of pre-pandemic levels respectively. SIA’s pax yield is likely to remain under pressure in the medium term, driven by increasing competition, but the recent rebound in air freight rates may provide some near-term earnings support. We forecast SIA’s 1QFY25 net profit at S$390m-550m, representing a qoq and yoy decline. Maintain HOLD on SIA. Target: S$6.43.
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Public Bank (PBK MK) Playing Catch-up
Public Bank’s share price has lagged due to its low beta and initial valuation premium. Its current P/B is 20% higher than the industry average, correlating with its 12% ROE versus the industry's 10%, indicating that it no longer commands a valuation premium. The share price is set for outperformance as the market factors in potential earnings surprises from lower credit costs and stronger loan growth, in our view. Maintain BUY with a target price of RM5.10 (1.73x 2024F P/B, 12.2% ROE).
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LIM & TAN |
LIM & TAN |
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Singtel ($3.05, up 0.04) announced its support for the amalgamation of Intouch Holdings and GULF, Intouch’s largest shareholder, which will create a leading digital and energy infrastructure player in Southeast Asia (NewCo). This group restructuring will simplify Singtel’s shareholding in its Thai associate AIS by removing Intouch as the intermediary holding company. Currently, Singtel and GULF hold 24.99% and 47.37% in Intouch respectively while Intouch holds 40.44% in AIS, with all three entities listed on the Thai stock exchange. We continue to like the asset monetization plans by Singtel which will help to raise dividends and cash flows to help fund Singtel’s growth plans in faster growing areas such as data centres / AI. While Singtel has already done very well, having risen by a significant 24% on a year to date basis, we maintain our “Accumulate” recommendation based on consensus target price of $3.30/share and yield of over 5%.
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Ossia International Limited (S$0.155, unchanged) has issued the Offeree Circular containing, inter alia, the IFA Letter and the recommendation of the Independent Directors in respect of the Offer. The Offeree Circular refers to the Joint Offerors’ intention to make a voluntary unconditional general offer of S$0.145 per share in cash for all the issued and paid-up ordinary shares it does not own in Ossia International Limited. In summary, the IFA are of the opinion that, in the absence of an alternative offer, the financial terms of the Offer is, on balance, FAIR and REASONABLE. |
| MAYBANK KIM ENG | MAYBANK KIM ENG |
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Alliance Bank (ABMB MK) Tracking expectations
BUY maintained ABMB continues to see fairly robust loan growth and fairly stable margins. Moreover, non-interest income (NOII) is expected to hold up. An offset to earnings this year could be expectation of higher credit costs on a YoY basis, but this has already been factored into our forecasts. ABMB is expected to announce its 1QFYE3/25 results on Aug 29th . We maintain our BUY call on ABMB with an unchanged TP of MYR4.35 (CY24E PBV target of 0.9x; 9.9% ROE). Dividend yields of 6% provide support.
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My EG Services (MYEG MK) Expands ZTrade coverage scope
New monetisation stream; maintain BUY The introduction of verification services for China-issued Certificates of Origin (COOs) effectively expands MYEG’s monetisation avenues for its thriving blockchain segment. We maintain our FY24-26E earnings forecasts for MYEG and our TP of MYR1.68 (pegged to 20x FY25E PER, at LT Mean). MYEG is one of our top picks in the M’sia software space. Reiterate BUY.
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