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PHILLIP SECURITIES
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PHILLIP SECURITIES
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Valuetronics Holdings Ltd- Buying the cash
- 1H25 revenue was within our estimates at 49% of FY25e forecasts. PATMI was better than expected at 55% of our FY24e forecast due to higher gross margins and lower effective tax.
- Revenue declined 3% YoY to HK$862mn. Legacy low-margin consumer lifestyle products caused an 18% drop in consumer electronics. Of the four new customers, networking products provided the strongest growth as the customer is replacing hardware from another major competitor. Valuetronics is investing HK$222mn (S$38mn) to purchase MetaX GPUs for their AI venture in Hong Kong.
- We raised our FY25e earnings by 3% to HK$169mn from better margins and lower effective tax. Our target price is raised from S$0.76 to S$0.785, as we peg it to an industry valuation of 11x PE. Valuation remains attractive as earnings begin to recover and cash continues to pile up. Net cash is currently HK$1.17bn (S$202mn), or 78% of market cap. Stable cash from operations of HK$201mn is more than sufficient to cover the current payout of HK$82mn or (5.7% yield). However, share buybacks have been a disappointment. There were 3.7mn shares bought back, but 4.1mn share options were issued to employees at a lower price.
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Centurion Corporation Limited - Promising Growth Ahead
- 9M24 results exceeded expectations. Revenue was 78% of our FY24e forecasts. 9M24 revenue from Purpose-Built Workers Accommodation (PBWA) in Singapore was 79% of our FY24e forecasts due to strong occupancy and rental rate revisions. Occupancy is currently 99%. No earnings were provided.
- 3Q24 revenue for Singapore PBWA and UK Purpose-Built Student Accommodation (PBSA) segments increased 26.5%/21.4% YoY, respectively.
- Maintain ACCUMULATE with a higher target price of S$1.02 (prev. S$0.90). We raised our FY24e revenue and PATMI by 3% and 9%, respectively, as strong occupancy and rental revisions across all segments are expected to continue. We expect rental rates to rise by an average c.15% YoY in FY24e. The interest cover ratio increased by 32% YoY from 3.4 for 9M23 to 4.5 for 9M24, showing signs of increased profits.
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OCBC
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PHILLIP SECURITIES
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Bumitama Agri Ltd
Singapore | Consumer Staples
Rating HOLD (as at 14 November 2024)
Last Close SGD 0.830
Fair Value SGD 0.815
A longer than expected winter
• 3Q24 revenue and net profit fell 7.6% and 32% year-
on-year (YoY) to IDR4t and IDR598b, respectively
• Peak producing quarter for 2024 to be delayed to Q4
after successive extreme weather conditions
• Revised fair value (FV) estimate of SGD0.815; share
price upside turns more limited following strong
performance year-to-date (YTD), but we continue to
like the stock from a total returns perspective.
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Zixin - Record profit lead by volume growth
- 1H25 revenue climbed 33.1% YoY to RMB156.7mn. Although this represents 36% of our FY25e forecast, the first half is typically seasonally weaker. Revenue growth was driven by a 131.0% and 159.5% YoY spike in volume and sales of fresh sweet potatoes, respectively, due to availability of supply and new sales channels.
- Adjusted profit exceeded expectations, reaching 57% of our full-year forecast, reversing from a loss of RMB1.7mn in 1H24 to RMB17.7mn in 1H FY25 after adjusting for non-cash and one-off expenses. The RMB7.7mn non-cash and one-off expenses was due to share-based payments and the rights cum warrants issue in 1H FY25.
- We expect capacity for processed products to increase by c.20% with the progressive commissioning of the new high-tech manufacturing facility by 4Q25. A stronger 2H25 performance is anticipated due to the harvesting season in Liancheng County and seasonal demand, particularly festival sales and winter sweet potato consumption, supporting volume growth.
FY25e PATMI will be further supported by margin improvements (+3.6 ppt in 1H25) from higher-margin products and increased sales volume through additional channels like supermarkets and e-commerce platforms. We reiterate our BUY recommendation with an unchanged DCF-TP of S$0.050. Zixin is currently trading at 5.6x/4.6x FY25e/FY26e PE. Our target price implies 12x FY25e PE. Zixin has net cash of RMB211mn (S$39mn).
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CGS INTERNATIONAL
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MAYBANK KIM ENG |
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ComfortDelGro
UK operations improving well
■ CD’s 3Q24 PATMI of S$58m (+5% qoq, +15% yoy) was in line, driven by better London bus margins and consolidation of newly acquired businesses.
■ UK (excl. CMAC) EBIT margin rose to 5.7% in 3Q24 (1H24: 1.2%); we expect further improvement in FY25F with further contract renewals.
■ We estimate 6% EPS accretion from Addison Lee acquisition; the move will boost CD’s premium taxi offerings. Reiterate Add, TP raised to S$1.80.
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MR D.I.Y. Group (M) (MRDIY MK)
3Q24: Below expectations Maintain BUY with a lower TP of MYR2.35
MRDIY’s 3Q24 results disappointed on weak sales volume and higher-thanexpected operating expenses. That said, we expect 4Q24 earnings to improve, on festive spending and civil service wage increases. Outlook for FY25E remains positive in anticipation of an overall rise in consumer disposable income from various Government initiatives. Our FY24E-FY26E earnings estimates are reduced by 5%-9%. Maintain BUY with a lower TP of MYR2.35 (-10sen) based on unchanged 30x FY25E PER, c.-0.5SD to mean.
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