GREATER CHINA Update Jiumaojiu International Holdings (9922 HK/BUY/HK$4.57/Target: HK$5.30): SSS declines in 1Q24; strategic readjustment to fit value-for-money experience. Li Ning (2331 HK/HOLD/HK$17.50/Target: HK$19.20): 1Q24 sell-through growth in line; expect sell-through growth to pick up starting from 2H24. INDONESIA Strategy Potential Impact Of The Middle East Conflict: Our top picks: Banking – BBNI, BBTN; property − BSDE, CTRA; technology – BUKA; consumer − MYOR, CMRY; retail – ACES; in...
CD’s wholly-owned UK subsidiary has been awarded four new public bus contracts. We maintain our expectations that CD would post a strong 1Q24 driven by favourable tailwinds for both the public transport services and taxi segments. We also highlight several points from CD’s responses to shareholder questions. In view of improving fundamentals and a lush 5.5% dividend yield, we maintain BUY and a higher target price of S$1.72. CD remains one of our conviction picks for 1H24.
Sri Lanka Consolidation: Dialog And Airtel Lanka Dialog proposed to acquire Airtel Lanka via a share swap. This will give Dialog a 64% subscriber market share in Sri Lanka and 30% additional spectrum allocation. Merger synergies over a decade are estimated to lift Dialog’s valuation by 1.5x. Axiata’s stake in Dialog will be diluted from 82% yo 74% and 2025 net profit reduced by 7%. In the longer run, consolidation in Sri Lanka is expected to yield a price advantage and cost discipline. Maintain ...
GREATER CHINA Sector Online Travel Agencies: Robust Qingming festival travel momentum continues into Labour Day. Results Dian Diagnostics (300244 CH/BUY/Rmb14.36/Target: Rmb18.50): 2023: Results in line; smooth progress in developing esoteric testing business. EVE Energy (300014 CH/SELL/Rmb35.00/Target: Rmb20.00): 4Q23: Earnings miss on margins. Maintain SELL. Cut target price from Rmb24.00 to Rmb20.00. Huizhou Desay SV Automotive Co (002920 CH/BUY/Rmb118.01/Target: Rmb145.00): 1Q24: Earnings mi...
1Q24 results are largely in line with expectations. KDCREIT clocked positive rental reversion at mid-to-high single digits for its colocation data centres, and its portfolio occupancy was maintained at 98.3%. Loss allowance for uncollected income from the Guangdong data centres was partially offset by the settlement sum received from DXC. KDCREIT is working with Bluesea Development on a recovery road map and leasing pipeline for Guangdong DC 1, DC 2 and DC 3. Maintain BUY. Target price: S$2.15.
Singapore provides resilient growth with CICT’s retail and office leases registering positive rental reversion of 7.2% and 14.1% respectively in 1Q24. Retention rate was high at 88.1% for retail and 84.2% for office. CICT has embarked on AEI works for IMM Building in Singapore. It has secured ECB as the new anchor tenant at Gallileo in Frankfurt, Germany for a period of 10 years. CICT provides a resilient 2024 distribution yield of 5.7%. Maintain BUY. Target price: S$2.34.
KEY HIGHLIGHTS Results CapitaLand Integrated Commercial Trust (CICT SP/BUY/S$1.88/Target: S$2.34) 1Q24: Secures ECB as new anchor tenant at Gallileo. Keppel DC REIT (KDCREIT SP/BUY/S$1.76/Target: S$2.13) 1Q24: Opportunistic divestment that strengthens balance sheet. Update Wilmar International (WIL SP/HOLD/S$3.37/Target: S$3.35) 1Q24 results preview: Expect core net profit of US$390m-420m (1Q23: US$382m). Better performance from consumer packs and plantation to be offset by weakness in m...
Defending Market Share In The Fibre Business TIME recently launched a free upgrade for fibre home speed. This product positioning, we opine, is aligned with TIME’s strategy of defending and eventually growing its market position in the retail segment. To recap, the retail segment exhibited robust topline growth of 20% yoy in 2023. Separately, TIME is at an exploratory stage to drive earnings via two new RE divisions. The stock offers an attractive near-term dividend yield of 6%. Maintain BUY. Ta...
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...
GREATER CHINA Sector Insurance: Value buy or value trap? Initiate Coverage Crystal International (2232 HK/BUY/HK$3.39/Target: HK$4.42): Well-positioned for market share gains from sportswear brand customers. Update Anta Sports (2020 HK/BUY/HK$81.60/Target: HK$109.60): Satisfactory 1Q24 sales performances; high-quality growth remains intact. JD.com (9618 HK/BUY/HK$98.85/Target: HK$127.00): 1Q24 results preview: Focusing on three core strategies to revitalise user growth. INDONESIA Sector Mining:...
KORE’s 1Q24 was resilient, with stable NPI of US$21.0m and portfolio occupancy of 90.1%. Leasing momentum is strong with an early renewal by Ball Aerospace (second-largest tenant) and expansion by Spectrum (fifth-largest tenant). The suspension of distribution provides funding for necessary capex and helps keep KORE’s leverage below 45% to ensure continued support from banks for refinancing. KORE trades at 2026 distribution yield of 30.7% and P/NAV of 0.20x (80% discount to NAV). Maintain BUY. T...
GREATER CHINA Sector Aviation: Airlines’ Mar 24 operation data was slightly weaker than we expected. Maintain MARKET WEIGHT with Air China being our top pick. Property: Property transactions pull back in April; rising risks of Vanke worsen sentiment. Update China Overseas Property Holdings (2669 HK/BUY/HK$4.05/Target: HK$5.60): Clarifying growth targets for 2024-26. INDONESIA Update Ace Hardware Indonesia (ACES IJ/BUY/Rp950/Target: Rp1,200): Potential 23.7% and 20.1% NPAT growth in 2024 and 202...
The steep decline in 3M HIBOR could shave off 4-6bp from NIM in 1Q24 as Hong Kong dollar-denominated loans accounted for 11% and 13% of total loans respectively for DBS and OCBC. Singapore banks are expected to deliver steady net profits of S$2,486m for DBS (-3% yoy but +10% qoq) and S$1,824m for OCBC (-3% yoy but +12% qoq) in 1Q24, supported by resilient asset quality. Maintain OVERWEIGHT. Our top picks are DBS (BUY/Target: S$43.25) followed by OCBC (BUY/Target: S$18.15).
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...
BRC reported higher 1QFY24 revenue (+17.0% yoy) of S$399.2m and net profit of S$17.1m (+46.5% yoy), slightly above our expectations. The outperformance was largely driven by the ongoing recovery in domestic construction demand coupled with the absence of Singapore’s Heightened Safety period. Backed by favourable tailwinds, we like BRC for its steady earnings growth coupled with its 9% dividend yield. Maintain BUY with a higher PE-based target price of S$2.42 (S$2.07 previously).
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...
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