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CGS CIMB |
MAYBANK KIM ENG |
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Q&M Dental Group Restarting expansion plans
■ 1H24 core net profit grew 48.5% yoy to S$8.0m, which we deem in line at 48.9%/47.3% of our/Bloomberg consensus’ FY24F estimates. ■ We are more positive on 2H24F as QNM tends to see stronger net profit in the latter half of the year due to seasonality. ■ Reiterate Add with an unchanged TP of S$0.37. Potential re-rating catalysts: accretive acquisitions, recognition of arbitration award from AR dental.
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HRnetGroup Ltd (HRNET SP) A tough year
1H24 PATMI below; Maintain HOLD with a lower TP 1H24 PATMI of SGD21.7m (-23% YoY) was below our and market expectations at 41%/38% of MIBG/consensus’ full-year forecasts. Despite the lacklustre results, HRnet maintained its interim DPS of SGD1.87 cents, which translates to a record high DPR of 80%. We revise down our FY24- 26E EPS by 12-17% due to lower placement volume and margin assumptions amid growing macroeconomic uncertainties. We also roll forward our valuation base to FY25E and reduce our 12-month TP from SGD0.80 to SGD0.70, still based on a target 15x PE. HOLD.
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MAYBANK KIM ENG |
OCBC |
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Singapore Telecommunications (ST SP) 3% stock correction: Much ado about nothing?
Optus tower dispute – Singtel could be net beneficiary Singtel’s stock fell 3% on 12th aug following a media report (link) alleging Optus had a dispute with its mobile towers investor, AustralianSuper. In 2021, Optus sold 70% stake in its towerco to AustralianSuper and leased back with a committment to lease 565 new towers. The report alleged AustralianSuper has failed to build the hundreds of new towers, which could result in penalties for the towerco. We believe Optus may receive penalty payments, although we think an amicable resolution is more likely with penalties being the last option. Assuming half of the new towers are not delivered and a penalty rate of ~10% (as a % of tower rental), we estimate it could lead to a post-tax annual penalty payment to Singtel of SGD7m or 0.2% earnings accretion pa. As such, we see the development as being largely non-material and the stock’s correction is a buying opportunity.
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Keppel Infrastructure Trust Last Close SGD 0.445
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| LIM & TAN | LIM & TAN |
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As China Aviation Oil / CAO (S$0.87, up 1 cent) is set to announce its 1HFY24 results this week, we continue to reiterate our BUY recommendation as valuations appear attractive at 7.7x FY24F P/E relative to its historical average of 12.2x. CAO remains a beneficiary of the stronger-than-expected international air traffic in China. The Civil Aviation Administration of China (CAAC) reported a sharp rebound in international flights in the first half of 2024, exceeding its previous estimates. Measures made to facilitate ease of entry for foreign travellers into China has started to bear fruit, and will further stimulate tourism recovery in the second half of the year. Capitalized at S$748.4mln, CAO trades at 7.7x FY24F P/E, 0.6x P/B with a dividend yield of 3.9%. With zero interest-bearing debt and a cash pile of US$373mln, CAO remains shielded in an elevated interest-rate environment and has the firepower to support acquisitions in the jet fuel and oil products ecosystem. Maintain BUY with an unchanged target price of S$1.24, pegged to 11.0x FY24F P/E.
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Centurion Corp (S$0.64, up 0.5 cents) has announced its results for the half year ended 30 June 2024 (“1H 2024”). Net profit after tax attributable to equity holders increased 209% to S$118.2 million in 1H 2024, boosted by net fair value gains of S$61.6 million. Excluding fair value adjustments, net profit derived from core business operations attributable to equity holders increased 47% from S$33.0 million in 1H 2023 to S$48.5 million in 1H 2024. The Board has declared an interim dividend of 1.5 Singapore cents per share for 1H 2024. At S$0.64, Centurion is capitalized at S$538.1mln and trades at 6.8x core forward P/E and 0.57x P/B with a dividend yield of 4.7%. Centurion’s 1H24 results came in above our expectations with revenue and core profits at 53%/62% of our full year forecast. 1H24 interim dividends of 1.5 S cts are higher than 1H23 interim dividends of 1.0 S cts, signalling room for an increase in final dividends as Centurion continues to remain a beneficiary of positive rental reversions across all key markets in the PBWA and PBSA segments. With strong growth across all asset classes and a healthy pipeline of new beds, the company remains on track to deliver solid results in FY24F. There is strong demand for foreign workers over the short-mid-term as Singapore’s construction demand is expected to remain high for 2024-2028. Maintain Accumulate on Centurion Corp. |
