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UOB KAYHIAN |
MAYBANK KIM ENG |
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Oiltek International (OTEK SP)
Engineering Specialist With Strong Orderbook And Positive Outlook
Oiltek posted a strong growth profile with three-year EPS CAGR of 40% (2021-24) and a record orderbook of RM401m for 9M24, ensuring good profitability in the future. We expect EPS and orderbook to continue growing at double digits in 2024-26 on higher biodiesel blending requirements, more palm oil refining facilities and stronger SAF demand. Initiate coverage with BUY and a target price of S$1.22, based on 18.9x 2025F PE, pegged to 0.9x PEG. Oiltek is trading at a discount of 30% vs its peers’ average.
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Sembcorp Industries (SCI SP) Asean power integration – further steps
Switching on Malaysian renewable power SCI has agreed to import 50MW of renewable energy from Tenaga of Malaysia to Singapore issued with Renewable Energy Certificates (RECs) using existing infrastructure. The two-year agreement starts this month. Pricing and settlement details are undisclosed. While there isn’t any immediate material impact on the earnings and NTA of SCI, this is a positive step towards Asean power integration and supports the energy transition plans of both countries. We lift our FY25/26 revenue for gasrelated business and renewable energy and roll forward our SOTP-based valuation to FY25E. This leads to a slight rise in our TP to SGD6.20 from SGD6.00. Maintain BUY.
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UOB KAYHIAN |
UOB KAYHIAN |
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Plantation – Malaysia Nov 24: Lower Production, Weak Exports And Market Share Shift Pressure End-stock
MPOB’s Nov 24 end-stock came in lower mom as expected, given that production was lower. Exports to major importing countries, such as India and China, also declined mom as demand softened after the festive season. There was also market share loss to Indonesia as Indonesia’s exports started to pick up. We like Hap Seng Plantations (HAPL/MK) for its upstream exposure, favourable production trend and high dividend yields. Maintain MARKET WEIGHT.
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Logistics – China Nov 24 Industry Data Remains Healthy; Expect Positive Sector Outlook In 2025
Recent logistics sector data remained healthy, with Nov 24 LPI of 52.8 (+0.2 mom) indicating expanding logistics activities. Nov 24 ELI stood at 115.5, the highest level since 2018, reflecting strong e-commerce logistics demand. We expect a positive outlook for the China logistics sector in 2025, underpinned by the country’s domestic consumption focus. JDL’s proposed acquisition of the remaining stake in Kuayue is expected to be earnings accretive. Maintain OVERWEIGHT. Top pick: JDL.
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DBS VICKERS |
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Firmer CPO price to support 2025 earnings rebound - Regional Plantation
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