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PHILLIP SECURITIES |
CGS CIMB |
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Singapore REITs Monthly: June24 Pricing in 2 interest rate cuts in 2024
▪ S-REITs Index declined 1.8% in June, following its 0.4% decline in May. The top performer for the month was Elite UK REIT (ELITE SP, BUY, TP £0.32) gaining 2.1%. The worst performer, IREIT Global (IREIT SP, non-rated), fell 15.2% after announcing that its main tenant at Berlin Campus (20% of rental income) will not be extending its lease, which expiries 31 Dec 2024. The Singapore diversified sub-sector was the top performer in June, gaining 0.2%. In contrast, the worst-performing sub-sector was overseas commercial, which fell by 7.4%, dragged down by IREIT Global
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ST Engineering Backed by multiple growth drivers
■ Reiterate Add at a higher TP of S$5.00 as we shift our valuation from blended to 20x CY25F P/E to better capture STE’s healthy growth trajectory ahead. ■ Key drivers backing double-digit core EPS growth for FY24-25F are elevated MRO activities, global rearmament trends, and USS EBIT turnaround. ■ We preview 1H24F core net profit at S$325m (+17% yoy), backed by strong revenue growth (+11% yoy) and slight EBIT margin expansion.
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CGS CIMB |
UOB KAYHIAN |
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Banks Consumption metrics tracker: Mixed data
■ Jun household time deposit mix improved slightly to 72.6% (-0.3% pt mom), albeit near record-high levels (Fig 3). Consumer loans remained weak in Jun. ■ Jun mortgage prepayment rates rose slightly and remained at elevated levels compared to 2020 and 2021 (Fig 1), signaling household deleveraging. ■ We think the marked slowdown of M2 growth in recent months was not driven by household deposits, but rather corporate deposits (Fig 8). ■ We see banks’ relatively defensive qualities positioning them well amidst uncertainty. Reiterate sector Neutral. Top picks: BOC, CCB, CITIC & CMB
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Kimly (KMLY SP) Margin Squeeze As Costs Bite; Tapping The Growing Halal Market
Higher wages and ingredient costs continue to pressure Kimly’s margins, as the ability to pass on costs is limited given consumer price sensitivity in the food retail division. Additionally, the outlet management division faces limited upside as charging higher rent may drive tenants out. Kimly maintains its focus on profitability and expanding its halal footprint. Its net cash position has also improved to S$72m (+34% yoy), providing a buffer against inflationary pressures. Maintain HOLD with a target price of S$0.35.
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| UOB KAYHIAN | DBS Bank |
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Press Metal Aluminium Holdings (PMAH MK) Favourable Aluminium Supply-demand Dynamics Amid Near-term Cost Pressures
While we expect sequentially stronger 2Q24 results, PMETAL might face short-term headwinds from rising alumina prices in 3Q24. Nevertheless, this will be negated by a stronger VAP contribution, driven by the group's aggressive expansion and relatively lower carbon anode prices. We believe there could be more upside, underpinned by a demand recovery, structural supply tightness and a reversal in the US interest rate cycle. Maintain BUY. Target price: RM7.00.
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ComfortDelGro’s SBSTransit retains Seletar Bus Package with SGD526m tender value
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