BH’s outlook remains bright from the continuous recovery in the number of international patients supported by high oil prices that should enhance the purchasing power of Middle Eastern patients. There are growth opportunities from a new dominant market and further technological development which are likely to send BH’s performance above pre-COVID-19 levels in 2023. Maintain BUY. Target price: Bt205.00.
We are starting 2H22 with a more defensive strategy by using a bottom-up approach to focus purely on defensive and quality names which benefit from the country’s reopening. Against this backdrop, quality names that have domestic tourism and consumption as their main revenue streams should benefit the most. For Jul 22, we cut losses on MTC, while adding BBL and TISCO to our list. Maintain BUY on AMATA, CPALL, CPF, CPN, MINT, OR and VGI.
KEY HIGHLIGHTS Sector REITs: Strength of balance sheet being stressed and tested. Shariah Gems Conference Takeaways Venture Corporation (VMS SP/BUY/S$16.63/Target: S$22.80): Remaining on track for growth. TRADERS’ CORNER Japfa (JAP SP): Trading BUY SIA Engineering Co (SIE SP): Trading BUY
VMS continues to see healthy near-term demand from majority of its customers and has an experienced task force to manage the recurring component shortages. Also, its strong R&D capabilities have enabled it to redesign products to reduce dependency on parts that are in shortage. Despite the higher inflationary environment, VMS strives to maintain its net margin in the historical range of 9-10%. Maintain BUY and target price of S$22.80 (pegged to +1SD, 19.5x 2022F PE).
As we continue to expect market volatility, we maintain exposure to names that have resilient earnings or are expected to enjoy an earnings growth recovery, such as Ausnutria Dairy (1717 HK), CSPC (1093 HK) and Dongfeng Motor (489 HK), and add PICC P&C (2328 HK) to our BUY list.
The stronger-than-expected 1Q19 economic data and central bank backstop have fuelled optimism that cycles are a thing of the past. With animal spirits rekindled, our more cautious view since end-February has not played out well. Although we have not seen an improvement in risk-reward so far and further meaningful monetary easing will be needed to see a sustainable recovery, we are adjusting our strategy to include laggards and policy-supported sectors in our BUY list.
The stronger-than-expected 1Q19 economic data and central bank backstop has fuelled optimism that cycles are a thing of the past. With animal spirits rekindled, our more cautious view since end-February has not played out well. Although we have not seen an improvement in risk-reward so far and further meaningful monetary easing will be needed to see a sustainable recovery, we are adjusting our strategy to include laggards and policy-supported sectors into our BUY list.