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CGS CIMB |
UOB KAYHIAN |
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Aztech Global Ltd Pasir Gudang plant visit
■ Aztech hosted a plant tour for sell-side analysts at its Pasir Gudang plant in Johor Bahru, Malaysia, on 26 Sep 2024. ■ We think the 3Q24F utilisation rate at the Pasir Gudang plant could be c.50%, with room to take on more orders to improve the rate. ■ Reiterate Add and S$1.21 TP. Potential downside risks are slowing order book and foreign exchange losses in 3Q24F.Aztech Global Ltd Pasir Gudang plant visit ■ Aztech hosted a plant tour for sell-side analysts at its Pasir Gudang plant in Johor Bahru, Malaysia, on 26 Sep 2024. ■ We think the 3Q24F utilisation rate at the Pasir Gudang plant could be c.50%, with room to take on more orders to improve the rate. ■ Reiterate Add and S$1.21 TP. Potential downside risks are slowing order book and foreign exchange losses in 3Q24F.
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China Sunsine Chemical (CSSC SP) Safe Proxy To China And Oil Price Recovery With Good Yield; Raise Target Price By 26%
As the Chinese economy recovers with the recent stimulus rollout and higher oil prices brought about by the Middle East conflict, Sunsine’s demand and ASPs may benefit. We believe Sunsine is a safe proxy to China’s recovery play as it is deeply undervalued at 2x ex-cash 2024F PE, trading at a 40% discount to its book value. Sunsine’s regular share buyback is a signal of its positive outlook and stock price undervaluation. Maintain BUY with a 26% higher target price of S$0.58 (from S$0.46).
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UOB KAYHIAN |
UOB KAYHIAN |
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STRATEGY – MALAYSIA Budget 2025 Preview: Building Sustainable Growth
While Budget 2025 (to be tabled on 18 Oct 24) is seen as largely market-neutral, it sets a solid fundamental undertone for future economic growth and the equity market, and is supportive of the ringgit’s upward momentum. Budget 2025 is expected to focus on fiscal prudence and the “rakyat’s” well-being, but remains expansionary hence progrowth and pro-FDI. The key beneficiary sectors are property and construction, while notable stock winners include Eco World, Lagenda, Gamuda and Mr DIY.
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Metals And Mining – China Gold: Rally Takes A Breather; Downside Cushioned By Escalating Geopolitical Tensions
Gold prices are taking a breather around US$2,650/t oz amid profit taking activities and a rebound in the US dollar. High gold prices have hampered jewellery and central banks’ demand. ETF inflow will support the upward momentum, with North America/Europe showing renewed interest in gold. Gold prices could remain rangebound while searching for new upside catalysts with downside cushioned by escalating geopolitical tensions. Maintain MARKET WEIGHT.
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| LIM & TAN | LIM & TAN |
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We highlight key points in Grand Banks Yacht / GBY (S$0.55, unchanged) FY24 annual report: I am delighted to report that Grand Banks has delivered a remarkable performance. Revenue reached an all-time high of S$133.7 million for FY2024, propelled by increased boat-building activities at our manufacturing yard in Pasir Gudang, Malaysia. Gross profi t improved to S$50.7 million in FY2024 from S$36.8 million in FY2023, while net profi t more than doubled to a record-high S$21.4 million, amid improved production efficiency. Our net order book remains healthy at S$120.0 million as of 30 June 2024 (S$159.4 million as at 30 June 2023), and cushions us against short-term macroeconomic headwinds. At S$0.55, GBY is capitalized at S$101.5mln and trades at 4.7x P/E, 2.9x ex-cash P/E and 1.2x P/B. We think GBY’s valuations paint a picture of a distressed company, which is a stark contrast to what is happening in the market today. As GBY’s orders move towards larger boat sizes which command higher average selling prices, margins are likely to see a boost as well. GBY now stands as a distinguished brand celebrated for its distinctive and iconic aesthetics, reinforced by the establishment of its own sales channel. GBY’s share price has almost doubled since our initiation last year, reflecting its doubling in earnings, and if earning trajectory can continue to move higher moving forward, share price should continue to track its earnings momentum higher as well. We see GBY as being “first amongst its equals”.
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We highlight the following points from an article in this morning’s Business Times on Beng Kuang Marine (S$0.27, up 1.5 cents): When a live cattle carrier owned by Beng Kuang Marine was detained in Indonesian waters, chief executive officer Yong Jiunn Run thought it seemed like the right time to call it a day for the ship chartering business. BKM’s market cap stands at S$53.8mln and currently trades at 8.4x forward PE and 3x PB. Consensus target price stands at S$0.29, representing 7.4% upside from current share price. utilization is consistently high. We think the recent price decline due to a vessel building delay represents a pullback opportunity to add MPM. We like Dyna-Mac (FY24PE: 12.9x, PB 6.5x, TP:71.5 S cts) given its latest explosive results and that Hanwha has launched a takeover price at S$0.60, but the family owning DM has rejected the offer, suggesting Dyna-Mac conƟ nues to be undervalued and also gives rise to a potential chance for Hanwha to increase it’s offer price. We also like Mermaid Maritime (FY24 PE:12.1x PB: 1.1x) for its strong order book, operating leverage and exposure to the DSV space and believe that the elevated high DSV charter rates, increase demand for oil well decommissioning and lack of DSV supply will pave the way for higher future earnings. |
