|
CGS CIMB |
CGS CIMB |
|
SATS Ltd Mitsui partnership to grow food solutions
■ We attended a press event held on 23 Aug 24 following the announcement of SATS’s partnership with Mitsui across various food solutions businesses. ■ Management from SATS and Mitsui shared their rationale for the partnership, and SATS showcased some of its food solutions capabilities. ■ We are positive on the longer-term growth opportunities for SATS’s food solutions business brought about by the collaboration with Mitsui. ■ Reiterate our Add call, with an unchanged TP of S$4.10.
|
Silverlake Axis Ltd Weighed down by opex and delivery costs
■ SILV core net loss was RM8m in 4Q24 due to elevated opex and project delivery costs. We forecast RM70.4m net profit. GPM dipped to 52% in FY24. ■ SILV’s deal pipeline was RM1.7bn in 4Q24, with a steady qoq order win rate. ■ Downgrade to Reduce with lower TP of S$0.25. Revenue growth could be challenging as FIs turn more cautious; opex may take time to moderate.
|
|
UOB KAYHIAN |
UOB KAYHIAN |
|
United Overseas Bank (UOB SP)
a) increased contribution from ASEAN 4 countries, namely Malaysia, Thailand, Vietnam and Indonesia, to 30%; b) increased contribution from non-interest income to 37%, driven by wealth management, c) improved CIR to 40%. Wholesale banking is able to capture connectivity flows through enhanced product platforms.
|
STRATEGY – CHINA Cross Currents
In our base case, we expect the MSCI China index to range trade for the rest of 2024 due to uncertainties over the duration of economic adjustment. Upside risk comes from the start of the Fed’s easing cycle as it opens the way for further monetary easing in China. However, this should be complemented by demand-side policies for greater impact. In the meantime, we utilise a barbell strategy, preferring TMT, tech hardware and defensives like banks, communication services and utilities.
|
|
MAYBANK KIM ENG |
LIM & TAN |
|
Singapore REITs Rates fall, SREITs rise
Green shoots reappear: Upgrade sector to POSITIVE The US Fed’s strong signaling of rate cuts should lower the discount rate for the REITs sector in Singapore and improve sentiment. Sustained rate cuts should also eventually lower borrowing rates. As such, we upgrade our sector stance. We also rehash how REITs stack up for rate cuts. This quarter’s results yielded no surprises with falling distributions, and we expect the trend to persist. Our core preference remains CICT, CLAR and FCT. Additionally we include LREIT, MLT and OUEREIT due to their rate/FX sensitivity and valuation.
|
Delfi Limited’s (S$0.825, up 2 cents) 1HFY24 results came in below our expectations with revenue and net profit coming in at 46%/42% of our full year forecast. Revenue declined 7.8% yoy to US$260.8mln, impacted by several headwinds including a weaker IDR/USD, weaker consumer spending as well as termination of an Agency Brand in Indonesia. Gross margins of 28.8% (-0.4 pp) saw a slight drop as Delfi reduced trade promotions to defend margins from higher cocoa costs. Overall, net profit came in at US$19.6mln (-22.3% yoy). Despite lower earnings, Delfi maintained interim dividends at 2.72 S cts. Backed by stable cashflows and a strong net cash position, we believe Delfi has the capacity to maintain full year dividends, an attractive 7.0% yield. At S$0.825, Delfi is capitalized at S$504mln and trades at 1.5x P/B and forward P/E of 10.2x. Dividend yield represents an attractive 7.0%. We cut our previous FY24F/FY25F revenue and earnings estimates by 11%/10% and 22%/21% respectively in view of higher costs and IDR/USD weakness. Delfi has significantly hedged raw material prices for 2024, although margins support for 2025 will depend on Delfi’s cost containment initiatives and ability to pass price adjustments to consumers. In view of its high yield and discounted valuations both historically (12.9x P/E) and versus its peers (>15x P/E), we maintain Accumulate with a lower target price of S$1.04 (previous TP: S$1.30), pegged to 5-year average. |
