ANALYSTS SAY: Buy, Sell, Hold (22 Aug)

PHILLIP SECURITIES

PHILLIP SECURITIES

China Aviation Oil

Spike in air traffic

• Revenue for 1H24 increased by 20% YoY to US$7.5bn, slightly below expectations and accounting for 44% of our FY24e forecast. The revenue growth is primarily attributed to a rise in oil prices and an increase in supply and trading volume (+7.5% YoY).

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Hyphens Pharma International Ltd

New products and wider distribution

▪ 1H24 results were within expectations. Revenue and PATMI were 55%/46% of our forecast. PATMI surged 52% YoY to S$5.3mn in 1H24. Earnings growth was driven by restocking in specialty pharma as supply chains normalise, new products and expansion of the distribution network. 

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UOB KAYHIAN

UOB KAYHIAN 

SATS (SATS SP)

1QFY25: Results A Solid Beat; Expect Strong Earnings Momentum To Sustain

SATS’ 1QFY25 core net profit of S$57.8m beat our expectations, at 27% of our full-year projection, despite the absence of positive impacts from the contract renewal with SIA. SATS saw broad-based profit improvement across key business segments and geographies, as well as margin expansion helped by favourable operating leverage. We have enumerated a number of factors that will sustain SATS’ strong earnings momentum in the near-to-medium term. Maintain BUY. Target: S$4.00. 

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REITs – Singapore

2Q24 Round-up: The Sun Has Started To Shine On S-REITs

For the 20 S-REITs under our coverage, three beat our expectations (CICT, FLT and KDCREIT), while two underperformed (LREIT and MLT). CICT saw an improvement in NPI margin. FLT locked in strong positive rental reversion in Australia. KDCREIT achieved strong rental reversion of +40% for a major renewal contract in Singapore. Maintain OVERWEIGHT. BUY CLAS (Target: S$1.30), FLT (Target: S$1.40), KREIT (Target: S$1.15), MINT (Target: S$2.78) and MPACT (Target: S$1.68). 

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Sea Limited

Recovering market sentiment

• Sea Limited’s share price has climbed 21.1% since its 2Q24 results announcement prior to market open on 13 Aug 2024

• Much of the positivity, in our view, stems from an upward revision in management’s guidance, as well as a more benign than expected competitive outlook for Shopee

• Strong growth and improved profitability across all three businesses; revise fair value (FV) estimate from USD90 to USD98

Investment thesis
Sea Limited (Sea) is a leading global consumer internet company founded in Singapore, operating three core

businesses across digital entertainment (Garena), e-commerce (Shopee), as well as digital payments and financial services (SeaMoney). In 2023, the company guided on a realignment of strategy to increase investments into Shopee and grow its market share, which may lead to losses from time to time. With the company’s businesses enjoying strong potential in a
growing region, we believe that the management is repositioning the company to tap on further growth going forward, which is the right strategy in the long term. In the near term, however, we think investors need to be patient with this stock as it undergoes a reset of investor expectations regarding the change in business strategy.