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PHILLIP SECURITIES |
UOB KAYHIAN |
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Sea Ltd. Outperformance likely to continue, but valuations stretched
• 1Q25 revenue/PATMI were in line with expectations, with its 30% YoY growth primarily driven by strength in Shopee (29% YoY) and Monee (58% YoY). 1Q25 revenue/PATMI was at 23%/25% of our FY25 estimates.
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Singapore Telecommunications (ST SP) FY25: Results In Line As ROIC Improves; Announced Inaugural Share Buyback
Singtel remains confident it can deliver double-digit ROIC in FY26-27. Key drivers are: a) better profitability from its core mobile businesses; b) strong contributions from its regional associates; and c) better execution from NCS and Nxera. The group has raised its identifiable capital recycling pot from S$6b to S$9b, which we believe will lead to higher dividends and total shareholder return. In turn, this will help to narrow Singtel's holding company discount. Maintain BUY. Raise SOTP-based target price to S$4.58.
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UOB KAYHIAN |
UOB KAYHIAN |
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Xiaomi Corp (1810 HK) Takeaways From Mi15S Pro And YU7 Launch Event
Xiaomi officially launched its new in-house developed SoCs, the XRING O1 and T1. These SoCs are featured in newly-released devices such as Mi15S Pro, Mi Pad 7 Ultra and Watch S4. Alongside these devices, Xiaomi has also announced its new YU7 SUV model. Notably, all three variants feature similar self-driving hardware, including LiDAR sensors and NVIDIA chipset with 700 TOPS. Maintain BUY and target price of HK$66.00.
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Lenovo Group (992 HK) 4QFY25 Results: Core Business Is Solid, But Bottom Line Impacted By Non-Core Items
Lenovo’s 4QFY25 reported net profit missed our and consensus estimates at US$90m due to a US$118m loss on the ALAT warrant’s fair value change. Stripping this out, its earnings should have been much closer to our estimate of US$202m. Core business recovery remains intact as we expect June Q to register sustained growth on top/bottom line, and the capacity relocation to Vietnam seems to be progressing faster than expected as well. Maintain BUY. Target price: HK$12.10.
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| LIM & TAN | LIM & TAN |
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Hongkong Land / HKL (US$5.23, down 2 cents) issued it’s Interim Management Statement for the first quarter of 2025 and reported that it continues to make steady progress towards its Strategic Vision 2035 announced in October 2024. The new strategy focuses on the development of ultrapremium integrated commercial assets in Asia’s gateway cities to drive sustainable, long-term growth. A key part of the strategy is to recycle up to US$10 billion of capital over a 10-year period, generating cash for new investments and enhanced shareholder returns. In April we announced our first significant capital recycling transaction, the sale of certain office floors and selected retail space of One Exchange Square to the Hong Kong Stock Exchange (‘HKEX’) for HK$6.3 billion (US$810 million), with sales proceeds expected to be received in stages over the next 18 months. This transaction secures HKEX’s permanent headquarters in the Group’s Central Portfolio, further strengthening Central’s interconnected financial ecosystem. Including the proceeds from this transaction, the Group has secured 30% of its target to recycle at least US$4 billion of capital by the end of 2027. HKL’s market cap stands at US$11.6bln and currently trades at 17.5x forward PE and 0.4x PB, with a dividend yield of 4.4%. We think HKL’s valuations are undemanding at 0.4x PB and that share price is currently supported by decent yield and continued share buy backs. If HKL’s new asset monetization is successful, proceeds can also be used to distribute higher/special dividends, which should act as catalysts for HKL’s share price as well. As such, we recommend an Accumulate on Hongkong Land.
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Mainboard-listed Metro Holdings Limited ($0.415, up 0.01), a property investment and development group backed by established retail operations, recorded a loss after tax of S$224.7 million for the financial year ended 31 March 2025 (“FY2025”) which was mainly attributable to noncash fair value and impairment losses arising from its China real estate exposure, as compared to a profit after tax of S$14.6 million for the corresponding period a year ago (“FY2024”). In FY2025, the Group’s property division continued to be negatively impacted by the ongoing prolonged property sector headwinds in China, which resulted in: At 41.5 cents, Metro is capitalized at $345mln and trades at 4.8% dividend yield based on an unchanged dividend payment of 2 cents per share. Based on its latest NAV of $1.40/share, price to book is low at 0.3x. There is no analyst coverage on the stock due to its weak fundamentals. But its low price to book and decent yield of 4.8% justifies a HOLD rating on Metro, notwithstanding its still weak outlook. |
