KT Corporation: Update following rating affirmation

Our credit view of KT Corporation reflects its sizable liquidity holdings, constrained by a history of regulatory pressure to lower wireless tariffs.

Indonesia Daily - Monday, May 6, 2024

Bukalapak.com (BUKA IJ/BUY/Rp123/Target: Rp270): 1Q24: Records positive EBITDA for the first time in its history. GoTo GoJek Tokopedia (GOTO IJ/HOLD/Rp66/Target: Rp70): 1Q24: Loss improves by 77.7% − ahead of expectations. Indosat (ISAT IJ/HOLD/Rp10,625/Target: Rp11,400): 1Q24: EBITDA up 22% yoy with stable EBITDA margin vs 4Q23. Downgrade to HOLD. Jasa Marga (JSMR IJ/BUY/Rp5,025/Target: Rp7,300): 1Q24: NPAT rises 17.8% yoy on robust toll revenue growth. Results within expectations. TRADERS’...

Singapore Daily: Monday, May 06, 2024

KEY HIGHLIGHTS Sector REITs                                                                             S-REITs monthly update (Apr 24). Results Far East Hospitality Trust (FEHT SP/BUY/S$0.615/Target: S$0.82)           1Q24: Growth from strong room rates and optimising occupancy. Venture Corporation (VMS SP/BUY/S$14.46/Target: S$16.37)                 1Q24: A soft start but expect sequential improvement.  TRADERS’ CORNER         Top Glove Corp (TOPG SP): Trading BUY                          ...

Credit Outlook: 6 May 2024

Published Monday and Thursday mornings, Moody’s Credit Outlook provides you with the credit implications of current events.

Regional Morning Notes - Monday, May 06, 2024

GREATER CHINA Sector Consumer: Tourism and catering strong performances during the Labour Day holiday. INDONESIA Results Bukalapak.com (BUKA IJ/BUY/Rp123/Target: Rp270): 1Q24: Records positive EBITDA for the first time in its history. GoTo GoJek Tokopedia (GOTO IJ/HOLD/Rp66/Target: Rp70): 1Q24: Loss improves by 77.7% − ahead of expectations. Indosat (ISAT IJ/HOLD/Rp10,625/Target: Rp11,400): 1Q24: EBITDA up 22% yoy with stable EBITDA margin vs 4Q23. Downgrade to HOLD. Jasa Marga (JSMR IJ/BUY/Rp5...

Venture Corporation (VMS SP) - 1Q24: A Soft Start But Expect Sequentia...

VMS’ 1Q24 earnings of S$60m (-18% yoy/-10% qoq) are broadly in line with our expectation, meeting 21% of our full-year estimate. The soft performance was due to lower customer demand amid some remaining headwinds which are beginning to taper off. VMS is targeting for revenue to improve qoq in 2Q24 and hoh in 2H24. It is growing with its customers as well as onboarding new customers in the EMS++ and precision engineering businesses. Maintain BUY and target price of S$16.37.

Far East Hospitality Trust (FEHT SP) - 1Q24: Growth From Strong Room R...

FEHT will benefit from the recovery of MICE events and strong room rates in Singapore due to its focus on the domestic market. The incentive fee of S$18m from divestment of Central Square could be utilised to cushion the negative impact of higher interest rates. FEHT provides a 2024 distribution yield of 6.7%. Its low P/NAV of 0.67x is unwarranted given its good corporate governance, strong sponsor and low aggregate leverage of 31.5%. Maintain BUY. Target price: S$0.82.

REITs – Singapore: S-REITs Monthly Update (Apr 24)

S-REITs weathered selling pressure as investors now expect interest rates to stay higher for longer. Many blue chip S-REITs are trading at attractive distribution yields of 6-7% after the correction. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from the continued recovery in visitor arrivals and resilient consumer spending. BUY CDREIT (Target: S$1.45), FCT (Target: S$2.71), FEHT (Target: S$0.82), FLT (Target: S$1.52), KREIT (Target: S$1.20) and MPACT (Target...

The Commodities Feed: Saudis raise OSPs

Oil prices came under significant pressure last week as Middle East tensions continue to ease. However, price action has been more supportive in early morning trading today on the back of a hike in Saudi OSPs

Asia Morning Bites

China's Caixin PMI services and composite reports are set for release today. Indonesia reports growth data for the first quarter.

Saudi Electricity Company: Increase in the WACC rate is credit positiv...

We view the upward revision given the higher interest rate environment as positive, with the newly established regulatory framework working as expected and in a transparent manner.

Castellum (Hold, TP: SEK135.00) - Unconvincing Q1 results

We have downgraded to HOLD (BUY) and trimmed our target price to SEK135 (136) following rather soft Q1 results that showed a risk in vacancy adding concern about the rental market outlook. We consider the stock fully valued, given only an 10% NAV discount (adjusted for Entra at market value) and its soft FFOPS growth outlook.

Good Q1 prompts EBIT revision of 16%

Sales and EBIT forecasts raised by 6% and 15%. Surprise uptake in industrial sales in CEE region. TP raised to DKK 2,700: HOLD.

Comeback kickoff

Q2 better on margins and volumes; earnings mix also strong. Further improvement in coming quarters on margin recovery. Record-low valuation: P/E 12-13x, SOTP at NOK 107/share.

Positive news at ESTRO

Lindab International (Buy, TP: SEK244.00) - A bump in the road

Lindab’s markets remain under pressure, but comparables are becoming easier, and we expect positive organic growth in H2 2024. Due to the weak Q1, we have reduced our 2024–2026e adj. EBIT by c5% on average and our target price to SEK244 (250), but reiterate our BUY. We expect earnings growth from Q4 onwards, and see upside potential to our target price.

Guidance upgrade likely on the cards in '24e

Solid Q1 despite fewer working days and soft international margins. '24e turnaround story re-affirmed with guidance upgrade likely. 24-13x P/E in '24e-'26e: Reiterate BUY with TP of DKK 330 (320).

On track

European occupancy continues up. Minor estimate changes for '25e-'26e. Trading above key peers, we reiterate HOLD.

Hexagon Purus (Hold, TP: NOK7.00) - On track

The Q1 report came as a relief to the capital markets. With decent quarterly results, capacity expansion on track, and a still-supportive demand outlook, the industrial business case looks intact. That said, we note the still-high funding need. We reiterate our HOLD, but have raised our target price to NOK7 (6) on lower dilutive effects from assumed further capital raises after Friday’s share price rally. The stock continues to trade at an attractive 40–50% discount to other hydrogen equipment s...