GREATER CHINA Sector Automobile: Weekly: PEV sales up 21% yoy/19% wow in the second week of April, in line. Maintain UNDERWEIGHT. Top SELLs: BYD, Li Auto and XPeng. Top BUYs: CATL and Desay SV. Results Han’s Laser (002008 CH/HOLD/Rmb18.95/Target: Rm17.10): 4Q23: Misses expectations on operating expenses. Margin pressure may continue through 2024. Update Xtep International Holdings (1368 HK/BUY/HK$4.46/Target: HK$7.00): Expect double-digit% yoy growth in retail sell-through for 2Q24 and 2024. IN...
While the higher number of new launches and completed units hitting the Singapore residential market in 2024 and 2025 enables buyers to shop around more, the spectre of persistently higher interest rates, as well as high property taxes, could have a dampening effect on sentiment in the near term. We see limited impact on CDL given its diversified income stream while PropNex could be protected by its high 6.5% dividend yield. Maintain OVERWEIGHT.
While Middle East tensions have escalated in the past 72 hours, we believe that the situation remains fluid. Oil prices remain the key worry and could negatively impact Asian growth and thus Singapore’s open economy should it escalate past US$100/bbl. In our view, aviation stocks should be able to pass on any oil price related increases, while near-term sentiment for the upstream and offshore marine sector should remain positive. An overall risk-off sentiment will likely pervade the markets in t...
KEY HIGHLIGHTS Strategy The Impact Of Escalating Middle East Tensions A fluid situation with oil prices the key worry. Small/Mid Cap Highlights BRC Asia (BRC SP/BUY/S$1.94/Target: S$2.42) 1QFY24: Strong results as construction demand recovers. TRADERS’ CORNER Aztech Global (AZTECH SP): Trading BUY Isdn Holdings (ISDN SP): Trading BUY
GREATER CHINA Economics Money Supply: Slower-than-expected credit expansion. Trade: Exports drop 7.5% and imports fall 1.9%. Sector Healthcare: ICL: Recent policies may cloud revenue growth in 2024; accelerating market consolidation to benefit leading players. Results Zhejiang Shuanghuan Driveline Co (002472 CH/BUY/Rmb21.60/Target: Rmb27.60): 4Q23: Results in line; but slowdown in EV gear business is apparent. MALAYSIA Sector Banking: The operational commencement of the various new digital bank...
ASEAN Sector Banks: ASEAN Banks: Quarterly update. GREATER CHINA Economics Inflation: CPI inflation moderates as CNY effects fade. Sector Automobile: Weekly: Raise 2024 auto sales growth to 7.5% on bigger price cuts. Maintain UNDERWEIGHT. Top SELLs: BYD, Li Auto and XPeng. Top BUYs: CATL and Desay SV. Consumer: Focus on four key theses for the sector. Property: 2023 results wrap-up: Profitability deteriorates as expected; outperformance of CR Land/COLI the main highlight. MALAYSIA Update Dialo...
MMT’s subsea and offshore services market has traditionally been in Asia; however, it has successfully expanded into the Middle East, West Africa and the North Sea in the past few years. Profitability has grown materially over the past three years with management guiding for EBITDA margin expansion in 2024 and 2025. In 2H23 alone, the company doubled its orderbook to finish 2023 at US$734m.
KEY HIGHLIGHTS Sector Banks ASEAN Banks: Quarterly update. Small/Mid Cap Highlight Mermaid Maritime (MMT SP/NOT RATED/S$0.137) Positioned for growth with orderbook expansion and higher margins. TRADERS’ CORNER AEM Holdings (AEM SP): Trading BUY Thai Beverage (THBEV SP): Trading BUY
Recent comments by US Fed officials raise the spectre of zero interest rate cuts should the US economy remain robust. We view Singapore corporates’ debt levels as manageable across the companies we cover, with free cash flow generation forecast to remain strong in 2024. Nevertheless, some companies’ profit margins could erode in 2024 should interest rate cuts be deferred into 2025, eg WIL, CDL, CLI, SCI and KEP. Companies with high cash piles (eg VALUE, GENS and YZJ) could benefit.
GREATER CHINA Sector Internet: Rewarding shareholders in 2023; emerging strategic growth prospects in 2024. MALAYSIA Update Maxis (MAXIS MK/BUY/RM3.55/Target: RM4.20): Compelling risk-reward as Maxis focuses on driving its core business and delivering three-year earnings CAGR of 8%. Upgrade to BUY with a higher target price of RM4.20. SINGAPORE Strategy Higher-for-a-lot-longer Interest Rates: Some companies to suffer, some to benefit.
GREATER CHINA Strategy Alpha Picks: April Conviction Calls: Adding AIA, Midea, Hansoh Pharmaceutical, Shenzhen Inovance and Trip.com to our BUY list, with SELL calls on BYD, EVE Energy, and Li Auto. INDONESIA Strategy Alpha Picks: Outperformance In Mar 24 and 1Q24: Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA. MALAYSIA Strategy Alpha Picks: Expanding The Variety Of Events Bets: Our Alpha Picks trounced the KLCI in Mar 24. Apr 24 picks: GENM, Inari, Mah Sing, MrDIY, MY...
KEY HIGHLIGHTS Strategy Alpha Picks: Robust end to 1Q24. Add CSE and LREIT; Remove MINT, CVL and FEH: Our Alpha Picks portfolio rose 6.0% mom in Mar 24 and 13.7% qoq for 1Q24, outperforming the STI by 3.4ppt and 14.2ppt respectively. TRADERS’ CORNER Olam Group (OLG SP): Trading BUY Singapore Tech Engineering (STE SP): Trading BUY
Our Alpha Picks portfolio rose 6.0% mom on an equal-weighted basis, outperforming the STI by a material 3.4ppt. The outperformance was driven by broad-based strength across most of our portfolio with the best showing coming from Riverstone, Yangzijiang Shipbuilding and Singtel. In 1Q24, our Alpha Picks portfolio surged by 13.7% qoq, surpassing the STI by a hefty 14.2ppt qoq. For Apr 24, we add CSE and LREIT while removing MINT, CVL and FEH.
GREATER CHINA Strategy Small-Mid Cap Biweekly Eyeing re-rating for refrigerant suppliers as AC dealers front-load for peak sales in 2Q24. Results China Construction Bank (939 HK/BUY/HK$4.85/Target: HK$6.00) 2023: Results in line; expect revenue headwinds to persist in 2024. COSCO SHIPPING Holdings (1919 HK/BUY/HK$8.44/Target: HK$10.60) 2023: Results in line; expect an upbeat 1H24 performance. Maintain BUY. Kweichow Moutai (600519 CH/BUY/Rmb1,713.99/Target: Rmb2,488.00) 2023: Earnings up ...
Although RHP’s 2023/24 drilling programme yielded only one successful well out of four, this was in line with historical global exploration success rates. Excluding exploration write-offs, the company’s 2023 net profit would have beaten our forecast. RHP remains an exploration play with two wells targeting nearly 10mmboe of reserves to be drilled in 2H24. Maintain BUY. Target price: S$0.242.
GREATER CHINA Results Longfor (960 HK/BUY/HK$10.18/Target: HK$12.71): 2023: Better earnings mix and debt structure; continues to optimise development model in 2024. Meituan (3690 HK/HOLD/HK$88.25/Target: HK$80.00): 4Q23: In line; margins pressured by lacklustre AOV and competition in in-store business. Orient Overseas (International) (316 HK/HOLD/HK$99.70/Target: HK$107.70): 2023: Results missed on margin pressure; share price more fairly valued after a sharp 16.7% decline post results. Upgrade ...
KEY HIGHLIGHTS Update First REIT (FIRT SP/NOT RATED/S$0.245) Riding on transformation and growth of healthcare in Indonesia. RH Petrogas (RHP SP/BUY/S$0.16/Target: SG$0.242) An in-line outcome for its drilling programme – more to come in 2H24. TRADERS’ CORNER Olam Group (OLG SP): Trading BUY Venture Corp (VMS SP): Trading BUY
GREATER CHINA Economics Money Supply: Weaker appetite for credit could limit impact of policy easing. Sector Aviation: Airlines’ Feb 24 operating data beat our expectations on stronger-than-expected holiday effect. Near-term risk-reward appears more balanced. Upgrade to MARKET WEIGHT. Results Contemporary Amperex Technology (300750 CH/BUY/Rmb180.85 /Target: Rmb250.00): 4Q23: Earnings beat on margins. Maintain BUY. Fuyao Glass Industry Group (3606 HK/BUY/HK$41.40/Target: HK$50.00): 4Q23: Net prof...
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