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PHILLIP SECURITIES |
UOB KAYHIAN |
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Singapore Air Transport – Mar25 Uncertainty due to the US macroeconomy
▪ In February 25, the aviation industry exhibited a range of outcomes. CAO plunged by 9.1% as the gross margin for its trading business in 2H24 deteriorated, and its dividend payout ratio fell short of expectations. SATS continued its downward trajectory amid the flip-flopping tariff, while SIA extended its gain.
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Singapore Technologies Engineering (STE SP) Upbeat Growth Outlook With Aggressive 2029 Growth Targets
During its 2025 Investor Day, STE unveiled aggressive growth targets ahead, aiming to achieve S$17b group revenue by 2029 (five-year CAGR: 8.6%) and potentially even faster net profit growth (up to 13.6% CAGR). Given STE’s strong track record, we have high hopes that STE will be able to deliver these growth targets. We raise our 2025-27 core earnings forecasts by 2-16% accordingly. Maintain BUY on STE, with a higher target price of S$6.80, based on 23.5x 2026F PE (1.5SD above mean).
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UOB KAYHIAN |
LIM & TAN |
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Xiaomi Corp (1810 HK) 4Q24: Solid Results; Sustained Growth To Continue Across All Segments
Xiaomi’s 4Q24 net profit is a solid beat at Rmb8.3b, with revenue, operating expenses and interest income surpassing expectations, although this was partially offset by a slight miss in gross margins. For 2025, Xiaomi has raised its EV sales target again to 350,000 units, while smartphone shipments will likely surpass 180m units on the back of market share gains. Maintain BUY and raise target price to HK$63.90.
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Bloomberg reported that Sembcorp Industries Ltd / SCI ($6.20, up 0.10) is carrying out a strategic review of its business, with various possibilities under consideration, including potentially going private or selling some assets, people with knowledge of the matter said. The Singaporean firm, which is backed by state-owned Temasek Holdings Pte, is working with a financial adviser on the review, according to the people, who asked not to be identified because the matter is private. We remain constructive on SCI as its successful monetization exercises of its legacy business and pivot to new green growth initiatives justifies its premium valuations. A constructive and successful conclusion of its strategic review would be another catalyst for re-rating of the counter as well. At its last traded price of $6.20, SCI is capitalized at $11bln and trades an undemanding forward and prospective PE of 9-10x versus consensus growth forecast of 15% over the next 2 years. Forward yield is about 4% while 1 year consensus upside target is about 18% to $7.30/share. We maintain an “Accumulate” rating on SCI. |
| MAYBANK KIM ENG | MAYBANK KIM ENG |
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First Resources (FR SP) Long term positive despite some short term EPS dilution
Scarcity of land justifies the purchase By our estimate, the proposed acquisition is valued at EV/ planted ha of USD10,202, a decent price considering the scarcity of land. At 37.5x 2024 PER, it is ST EPS dilutive for FR, but ANJT’s depressed EPS was partly due to losses at its non-core food crops. We are LT positive on ANJT’s potential and feedstock security it offers to FR’s downstream op. We are keeping our earnings forecasts for now but D/G FR to HOLD given limited upside to our unchanged TP of SGD1.69 on 9x FY25 PER (-0.75SD of 6Y mean).
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ASEAN Data Centre BOI approves USD2.7b DC investments in Thailand
BOI approves 350MW of new data centre capacity Thailand’s Board of Investment (BOI) has approved USD2.7b in data centre (DC) projects totaling 350MW of IT capacity. It includes proposals by Beijing Haoyang Cloud & Data Technology (300MW), Empyrion Digital (12MW), and GSA Data Center 02 (40MW). As discussed in our earlier report (link), Thailand is emerging as the next DC frontier in ASEAN. According to Cushman and Wakefield’s 2H24 report, Bangkok (where most of Thailand’s DCs are) has 105MW of DC capacity in operation compared to Singapore, Jakarta or Johor of 278-1016MW and, as such, offers a long runway for growth.
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