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UOB KAYHIAN |
UOB KAYHIAN |
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Keppel DC REIT (KDCREIT SP) Sustainable Growth In Singapore; Green Shoots In China
Equinix and GDS have recently acquired land but the minute increase in supply of 40MW would come on stream largely in 2027. Thus, the recent upsurge in positive rental reversion for colocation leases in Singapore should sustain into 2025 and 2026. The acquisition of SGP7 and SGP8 was completed on 27 Dec 24 and would start contributing in 1H25. KDCREIT’s Guangdong data centres could benefit from increased demand driven by AI in 2026. Maintain BUY with a target price of S$2.55.
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Tencent Holdings (700 HK) 4Q24: Stable Capex And Margin Outlook In 2025 Amid Hunyuan LLM Reiteration
Tencent’s 4Q24 results are largely within expectations. Revenue grew 11% yoy to Rmb172.4b, in line with consensus estimates. Gross margin expanded 3ppt yoy to 52.6%, in line with consensus forecasts. Non-IFRS operating profit grew 21% yoy to Rmb59.5b, while non-IFRS operating margin shrank 3ppt yoy to 34.5% on a positive shift in the revenue mix. Non-IFRS diluted EPS surged 33% yoy, beating consensus estimates by 8%. Maintain BUY with a higher target price of HK$645.00.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Greatech Technology (GREATEC MK) Bargain-hunting
Downside risk largely priced-in; U/G to BUY We opine that GREATEC’s recent acquisition from a distressed seller has the potential to accrete long-run value as it diversifies exposure towards higher value-add process automation. With a weaker outlook from US tariff tiff uncertainties largely priced in, we U/G GREATEC to BUY. Our TP of MYR1.95 (26x FY26E PER, at -1.0SD to 5Y mean) and FY25-27E earnings are unchanged. As its fundamentals remain largely intact, GREATEC is wellpositioned to capitalise on global IR4.0 & factory automation trends.
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Solarvest Holdings (SOLAR MK) Secures first LSS5 EPCC project
Maintain BUY Solarvest has secured the EPCC works for a 500MWac solar farm under LSS5 from TNB Kuala Muda Solar Sdn Bhd (TKMS) worth MYR401m. This maiden contract relating to LSS5 will lift its orderbook to MYR1.3b, providing earnings visibility for the next 2 years. We make no change to our earnings forecasts, taking the current job win as part of our MYR1b OB assumptions in FY26E (Mar). Maintain BUY.
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| LIM & TAN | LIM & TAN |
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The US Fed Dot Plot of expecting 2 rate cuts for the rest of 2025 to reduce the Fed Funds Rate to 3.9% comes about in line with DBS’s internal forecast of 2 rate cuts for FY2025. OCBC is more conservative as their internal forecast expects 3 rate cuts in FY2025 while UOB is the most aggressive as their internal forecast is only penciling in 1 rate cut for FY2025. Most importantly, the 2 rate cuts as indicated by the Fed comes in line with market expectations and thus we see this as being already priced in by the markets and thus maintain our “Accumulate” ratings on all 3 Singapore banks DBS, OCBC and UOB given their attractive yields of 5+%-6+% range while PE valuations are not demanding at 10x-11x.
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CNMC Goldmine (S$0.335, up 0.5 cts) remains a prime beneficiary of rising gold prices amidst global uncertainties and increasing demand for the safe-haven asset. CNMC’s market cap stands at S$136mln and trades at 8.5x forward P/E and 2.1x P/B, with a dividend yield of 4.2%. Gold prices rose 26% in 2024 and continued its rise in 2025, hitting an elevated USD3,050/oz today. Sky-high gold prices, coupled with an increase in gold output as targeted by the company, will render 2025 a year to watch. We maintain BUY on CNMC Goldmine with a higher target price of S$0.48 (previous TP: S$0.43), pegged to 12.1x FY25F P/E (peers average) and DCF. |
