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CGS CIMB |
MAYBANK KIM ENG |
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Yangzijiang Shipbuilding Arbitration does not impact order book
■ The containership contracts that YZJSB is in arbitration with a customer, worth US$900m, were never included in its order book (1H24: US$20.2bn). ■ The claim amount by the customer is US$835m, comprising loss of bargain, loss of profits and refund of payments made. ■ YZJSB’s legal advisors say there is no merit to the claims and that the suit is highly improbable to succeed. No provision has been made. ■ Reiterate Add and TP of S$3.20, still based on 11x CY26F P/E, in line with regional peers.
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First Resources (FR SP) ESG 2.0: Lagging long term “E” targets
Progressing slowly but surely FR has made commendable progress the past 2 years in its “E” initiatives but still lags peers in setting medium and long term “E” targets/ commitments. Under our ESG 2.0 proprietary review update, FR has a marginally below average score of 45. Maintain HOLD on FR with an unchanged TP of SGD1.46 on 10x FY24 PER. We prefer BAL SP (BUY, CP: SGD0.75, TP: SGD0.78).
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Singapore Banks Enter the Dragon
Upgrade to POSITIVE on China + ASEAN growth Past Chinese stimulus in 2009 and 2015 have had positive impacts on Singapore banks’ loans and profitability. We believe the current measures may do the same. Concurrently, the sector is poised to benefit from a confluence of positive catalysts from rising regional credit demand, the JS SEZ and an AUM base converting from fixed deposits to wealth management products commanding higher fees. Upcoming 3Q24 results should show slower than previously expected NIM contraction and a pickup in fees with a backdrop of solid asset quality. We raise our sector outlook to POSITIVE, upgrade OCBC, UOB to BUY and retain BUY on DBS.
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Tiong Woon Corp (TWC SP) Construction heavyweight
Leading one-stop integrated heavy lift specialist Tiong Woon Corporation (TWC) is the 15th largest crane-owning company worldwide in the latest IC100 2024 survey, up 4 ranks from19th place last year. It is also one of the leading one-stop integrated heavy lift specialist and service providers, benefiting from the booming O&G, petrochemical, infrastructure, and construction sectors. According to Bloomberg consensus forecasts, the stock trades at 6.1x FY25E P/E, 0.4x P/B with a 3.8% prospective yield. Re-rating catalysts include better-than-expected earnings and dividends, as well as further share buybacks. Downside risks are project delays, impaired accounts and rising costs eroding margins.
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| UOB KAYHIAN | LIM & TAN |
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United Overseas Bank (UOB SP) Building The Future Of ASEAN
UOB aims to achieve ROE of 14% by 2026 through: a) increased contribution from ASEAN 4 countries (namely Malaysia, Thailand, Vietnam and Indonesia) to 30% of total income, b) increased contribution from non-interest income to 37% of total income, driven by wealth management, trade and customer flow for treasury products, and c) improved CIR to 40%. UOB will benefit from growth within ASEAN from relocation of supply chains and strengthening of regional currencies.
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Capitaland Ascendas REIT (S$2.79, down 1 cent) announced that it will has entered into a sale and purchase agreement today for the sale of 21 Jalan Buroh in Singapore (the “Property”) to GDS IDC Services Pte. Ltd. for a sale consideration of S$112.8 million. The Sale Consideration represents a premium to the original purchase price of S$58.4 million at which CLAR acquired the Property for in June 2006, and a premium to the average of two independent market valuations of the Property which is S$67.5 million as at 1 July 2024. The divestment of the Property is not expected to have any material impact on CLAR’s net asset value and distribution per Unit (“DPU”) for the financial year ending 31 December 2024. CLAR’s market cap stands at S$12.28bln and currently trades at 20x forward PE and 1.2x PB, with a dividend yield of 5.4%. The consensus target price stands at S$3.15, representing 13% upside from the current share price. We continue to like CLAR for its fundamentally strong and diversified portfolio that can benefit from its current pivot towards faster growing data centres amidst a more dovish interest rate environment going ahead. With this disposal unlocking capital, CLAR has now more room for deployment into faster growing data centre assets. As such, we continue to maintain an “Accumulate” rating on CLAR. |
