ANALYSTS SAY: Buy, Sell, Hold (20 Mar)

CGS INTERNATIONAL

CGS INTERNATIONAL

Banks

Positive outlook not shattered by war in ME

■ Indirect impact from the war in the Middle East (ME) on Malaysian banks would be risk of possible OPR cut in 2026F and rising credit cost, we think.

■ We estimate that a 25bp cut in OPR (if any) would only trim our net profit forecasts for banks by 1.6% (assuming 2-3bp reduction in NIM).

■ Reaffirm sector Overweight as we assess low earnings risks from higher oil prices for banks. Re-rating catalyst would be higher dividend payouts.

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Delfi Ltd

Positioning for new upcycle

■ We believe strong cash generation in FY25 despite elevated cocoa prices will enable Delfi to continue its efforts to gain market share in FY26F.

■ Although cocoa prices have eased, the mend in GP margins should be more significant from 2H26F after existing forward hedges expire.

■ Reiterate Hold with a higher TP of S$0.91, based on 12x (5-year mean) FY27F P/E after lifting FY26F/27F EPS by 1.4%/15.1%.

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UOB KAYHIAN

UOB KAYHIAN

LHN (LHN SP)

Portfolio Resilience; Transitioning To Asset-Light Business Model

Highlights

• LHN continues to see strong occupancies rates across its core segment.

• Increased capital recycling initiatives alongside continued momentum in Coliwoo’s portfolio.

• Trading at 8.3x adjusted FY26F PE, valuation remains attractive at a 54% discount to peers at 18.2x 2026F PE. Maintain BUY with a lower target price of S$0.71.

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Alibaba Group (9988 HK)

3QFY26: Earnings Miss; Targeting A US$100b AI MaaS & Cloud Revenue Over Next Five Years

Highlights

• Alibaba’s 3QFY26 earnings missed expectations. Revenue grew 2% yoy to Rmb284.8b, 1.7% below the street’s estimate. Non-GAAP net profit was Rmb16.7b, down 44% yoy, missing our forecast, due to its investment in Taobao Instant Commerce. In 4QFY26, management expects: a) a significant narrowing of quick commerce losses, b) CMR growth and profitability to recover, and c) continued strong growth in cloud revenue. Maintain BUY with a lower target price of HK$192.00 (US$196.00).

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AEM
Valuation uplift as AI tailwinds persists and new customer traction builds

• AI and new customer tailwinds intact, with further upside contingent on execution of hyperscaler opportunities

• We see AEM’s risk-reward as skewed to the upside, supported by strong growth, improving diversification, and favourable sector tailwinds which warrants a higher multiple

• AEM trades at 26x FY27F earnings, below global peers at c.34x, and remains undemanding on a PEG basis (c.0.4x, based on FY25–27 earnings CAGR of 62%)

• Maintain BUY with higher TP SGD4.60 (vs SGD3.30 previously).

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