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CGS CIMB |
CGS CIMB |
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Oiltek International Ltd
Order book uptrend: 25.1% EPS CAGR
■ Order book of RM401m to drive our 25.1% EPS CAGR forecast over FY23- 26F. Further order win potential from higher biodiesel blending requirements.
■ Asset-light business, positive free cash flow generation, and an average 34.7% ROE over our FY24-26F forecast period. Net cash balance sheet.
■ We initiate coverage on Oiltek International Ltd with an Add call and TP of S$1.32, based on 18.8x 2025F P/E (10% discount to the sector average).
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Banks Loan growth picking up momentum
■ Banking system loan growth kept up momentum, rising 2.3% yoy in Nov 24. Domestic loans contributed almost all of the expansion at +3.3% in Nov 24. ■ The split of system deposits between CASA and FDs have tipped over to 51:49 as interest rate cuts dull the attractiveness of term placements. ■ Reiterate sector Neutral. We think the improved growth outlook from interest rate cuts is priced in but look forward to more capital management activity.
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MAYBANK KIM ENG |
UOB KAYHIAN |
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CSE Global (CSE SP) Validation of electrification prospects
Maintain BUY with a higher TP of SGD0.64 CSE sold a US facility for USD29.25m and we expect it to recognise a gain of USD8.6m after tax expense, which will offset the one-off USD8m settlement in Sep 2024. Proceeds from the sale will be used to buy a larger property in the US for business expansion while it will continue to lease the facility it sold at an estimated rental of USD2.5m/year. We believe this move validates management’s confidence in the growth of its electrification business in the US. We raise our FY24/25E PATMI by 29.8% and 5%, respectively, and our TP is raised to SGD0.64 from SGD0.60, based on an unchanged 13x FY25E P/E.
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Banking – Singapore The Trend Is Your Friend
The Fed is expected to be more cautious when contemplating future rate cuts due to the US economy’s recent strengthening. DBS could declare two special dividends of 50 S cents per share in 4Q24 and 4Q25 and increase quarterly dividend by 6 S cents to 60 S cents in 4Q24 and 66 S cents in 4Q25. OCBC could consider raising its dividend payout ratio to 57%, translating to DPS of 96 cents in 2026. Maintain OVERWEIGHT. BUY DBS (Target: S$46.50), followed by OCBC (Target: S$20.80).
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LIM & TAN |
LIM & TAN |
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SingPost ($0.555, up 1.5 cents) refers to The Straits Times’ article “SingPost can potentially offer a ‘significant’ special dividend after sales of assets: Maybank” dated 3 January 2025. The article refers to, among other things, Maybank’s report on SingPost’s “potential sale of freight forwarding business Famous Holdings”, and states that “the sale of Famous Holdings should conclude by endJanuary 2025, which should raise between $80 million and $100 million in proceeds”. SingPost’s market cap stands at S$1.2bln and currently trades at 18x forward PE and 1X P/B. Bloomberg consensus 1 year target price of 74 cent implies a potential 1 year return of 32%. Despite a potential delay, we continue to maintain Singpost at an “Accumulate on Weakness” rating as we believe that the “endgame” of eventually selling/ monetizing its assets and returning the proceeds to shareholders remains intact. This thesis we believe is also in line with what Singtel (largest shareholder of Singpost at 22% holding) is currently implementing. Although the timing of the disposals and monetization maybe somewhat delayed due to the C-Suite changes implemented recently.
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The Business Times has reported that 17LIVE Group Limited (S$0.94, unchanged) aims to be the ‘izakaya’ of live-streaming services. Its business model is based on human connections, interactions and engagement, says CEO. When 17Live chief executive Jiang Honghui thinks of the streamers on his platform, he does not see them as rock stars performing for large groups of fans. Instead, they are more akin to Japanese izakaya chefs hosting dinner for eight to 10 guests at a time. “That’s the feeling we’re talking about. You go in, the chef knows you, greets you, talks to you,” he said. However, the concept has yet to be fully appreciated by public markets in Singapore, where the app has no significant presence. 17Live market cap is S$172mln and trades at 13.9x forward P/E and 1.3x P/B. The company does not pay any dividends. 17Live has started its share buyback mandate, buying back 166.6k shares so far since 12’Dec 24 at a price range of 90 cts – 103 cts. As a leading live-streaming platform in Asia, with a strong presence in Japan and Taiwan, 17Live offers a variety of services including liver and V-liver live-streaming, in-app games, and live commerce. Bloomberg consensus 1 year target price of S$1.80 represents a 91% potential upside. |
