buysellhold july.23

UOB KAYHIAN

UOB KAYHIAN

Seatrium (STM SP)

An Ocean Of Opportunities

 

STM’s significant exposure to Brazil comes from its construction of eight out of the 11 FPSOs that Petrobras will be putting to work from 2H24 to 2028. We believe there are seven (and possibly up to 11) other FPSOs that could be contracted in the next 12-24 months if Petrobras’ production targets for 2029-31 need to be met.

In addition, we highlight the nascent offshore wind sector in Brazil where STM is in pole position to assist in building out. Maintain BUY. Target price: S$2.31.

 

 

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Automobile – China

Weekly: PV Sales Rebound By 10% yoy; Beat Expectations

 

China’s PV insurance registrations rebounded 10% yoy and 13% wow to 514,134 units in 26 Aug-1 Sep 24. PEV market share dropped to 49.6% from 53% in the previous week. However, Li Auto saw a wow sales decline during the week.

Geely’s Zeekr and Galaxy achieved buoyant sales growth, driven by new models. CATL’s share of the global EV battery market remained steady at 38% in 7M24. Maintain MARKET WEIGHT. Top BUYs: CATL and Desay SV. Top SELL: XPeng.

 

 

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MAYBANK KIM ENG

MAYBANK KIM  ENG

Singapore REITs

Accelerating recycling

 

Win-win accretive deal; positive sector read through CICT will acquire a 50% stake in ION Orchard, a prime retail mall, from sponsor CLI. The deal deepens CICT’s presence in the city centre, brings in new tenants and is accretive while keeping gearing capped.

The recycling will help its sponsor to exceed its annual recycling target and redirect investments. Sentiment should be boosted by improved demand for equity fund raising, revival of transactions and support for asset values. Retain positive sector view and tweak up TPs by 4-8% for the coverage. Preferred picks – CICT, CLAR, FEHT, LREIT, MLT, and OUEREIT.

 

 

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CSE Global (CSE SP)

Electrifying our conviction

 

Visit to electrification business in Houston

We visited CSE’s electrification business (Volta) in Houston, US to gain a better understanding of its business and came away more convicted on its mid-term outlook. We believe that its electrification business is in the midst of a rapid expansion phase, driven by strong demand from data centres, LNG terminals as well as infrastructure projects, and this will likely persist for the next few years.

The prospects for the data centre segment are massive with an existing 40,000 sqf facility that will rise to 75,000 sqf in 2025. This will satisfy demand from just one customer and will still need to be expanded to meet its demand pipeline in 2026. As a result, we are even more convicted and expect more contracts in the near term. Maintain BUY with an unchanged TP of SGD0.64.

 

 

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UOB KAYHIAN MAYBANK KIM ENG

STRATEGY – THAILAND

The Policies Of Paetongtarn’s Government

 

There is no surprise in the policies of the new government, which align with the policies of the previous government and the vision of former PM Thaksin Shinawatra. The key focus of the new government is to revive the grassroots economy, stimulate the domestic market, invest in infrastructure and reform the tax structure. These policies will benefit the overall market, particularly the finance, banking, retail, tourism and construction sectors. Our top picks are AOT, CK, CPALL, KBANK, MTC and WHA

 

 

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Gamuda (GAM MK)

Firms up Upper Padas HEP, but set-back at Rasau

 

Positive on Upper Padas HEP, but set-back at Rasau

We are positive on Gamuda’s involvement in the Upper Padas HEP based on its experience in dam and related infra E&C, alongside a 40-year PPA which gives recurring earnings. ESG wise, this represents a big step in its clean energy growth plan which comprises the development of >800MW of RE assets. Separately, initial assessment at the Rasau site indicates that the overall project completion date is still intact. We make no change to our earnings est. but raise our RNAV-TP to MYR8.00 (+75sen). Maintain BUY. 

 

 

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