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 Inflation: Jan 24 CPI inflation lower on base effect. Sector Automobile: Weekly: EV market share falls to 38-week low. Top SELLs: BYD, XPeng and Li Auto. MALAYSIA Update Press Metal Aluminium Holdings (PMAH MK/BUY/RM4.62/Target: RM5.50): Anticipate growth to resume in 2024 following peaking interest rate cycle and more robust contribution from VAPs. SINGAPORE Results Singapore Post (SPOST SP/HOLD/S$0.405/Target: S$0.54): 3QFY24 update: Soft quarter, as forex and Famou...
KEY HIGHLIGHTS Results Singapore Post (SPOST SP/HOLD/S$0.405/Target: S$0.54): 3QFY24 update: Soft quarter, as forex and Famous Holdings impact profits. StarHub (STH SP/BUY/S$1.07/Target: S$1.41): 2023: Results slightly above expectations, DARE+ costs to taper off in 2024. TRADERS’ CORNER Delfi (DELFI SP): Trading BUY Wilmar International (WIL SP): Trading SELL
For 2023, StarHub reported higher revenue (+2% yoy) and underlying PATMI (+77% yoy), driven by broad-based growth across all service segments. Overall margins are expected to improve in 2024 on the back of ongoing cost optimisation efforts as well as an expected tapering off in DARE+ investments in 2H24. Armed with a lush 2024 dividend yield of 6.8%, we maintain BUY with a higher target price of S$1.41.
GREATER CHINA Results KE Holdings Inc (2423 HK/BUY/HK$39.40/Target: HK$58.00): 3Q23: Earnings beat; poised for meaningful recovery in 4Q23. LINK REIT (823 HK/BUY/HK$38.40/Target: HK$50.70): 1HFY24: Results in line; ready for unit buyback. INDONESIA Sector Banking: Acceleration in government spending to support earnings in 4Q23. MALAYSIA Results Malaysia Marine and Heavy Engineering Holdings (MMHE MK/BUY/RM0.49/Target: RM0.65): 3Q23: Another lumpy provision recognised, but inevitably means MMHE...
KEY HIGHLIGHTS Results Nanofilm Technologies International (NANO SP/SELL/S$0.93/Target:S$0.66): 9M23: Revenue in line but expect weakness to continue in 4Q23; downgrade to SELL. Prime US REIT (PRIME SP/BUY/US$0.162/Target: US$0.53): 3Q23: Closing in on several leasing discussions. Singapore Airlines (SIA SP/HOLD/S$6.28/Target: S$6.80): 2QFY24: Results beat expectations; full-year profit likely to hit a new record. Upgrade to HOLD. StarHub (STH SP/BUY/S$1.05/Target: S$1.37): 3Q23: Strong resu...
For 9M23, StarHub reported higher service revenue (+8.2% yoy) and core PATMI (+29.1% yoy) from broad-based growth across all business segments. This was also supported by a robust 3Q23 with service revenue and PATMI growing 8.9% yoy and 36.1% yoy respectively. However, margins are expected to soften going into 4Q23 from increased DARE+ investments. Maintain BUY with an unchanged target price of S$1.37.
KEY HIGHLIGHTS Results DBS Group Holdings (DBS SP/BUY/S$33.76/Target: S$44.35): 2Q23: Net profit of S$10b is within reach. StarHub (STH SP/BUY/S$1.05/Target: S$1.37): 2Q23: Above expectations, driven by mobile and the English Premier League. TRADERS’ CORNER Civmec (CVL SP): Trading BUY First Resources (FR SP): Trading BUY
For 1H23, StarHub experienced broad-based growth across all segments. 2Q23 overall revenue and PATMI grew 0.5% yoy and 25.6% yoy respectively, driven by higher mobile and entertainment contributions. The mobile segment saw higher data roaming revenue and take-up of its 5G plans while the EPL drove ARPU for the entertainment segment higher. 2Q23 revenue from the broadband and enterprise segments softened yoy but grew sequentially. Maintain BUY. Target price: S$1.37.
GREATER CHINA Sector Automobile: Weekly: EV sales up 33% yoy but down 3% mom in July, missing estimates. Maintain UNDERWEIGHT. Top BUYs: BYD, CATL and Li Auto. Results Budweiser APAC (1876 HK/BUY/HK$17.50/Target: HK$22.50): 1H23: Results miss expectations; good recovery in China but headwinds in South Korea. INDONESIA Results Bukalapak.com (BUKA IJ/BUY/Rp228/Target: Rp265): 2Q23: Profitability could be around the corner. MALAYSIA Results Fraser & Neave Holdings (FNH MK/BUY/RM24.92/Target: RM30...
Our analysis of compensation in Singapore suggests that for 2022, companies were generally fair in remunerating their CEOs and board of directors. Compared with their net profit, YZJ, SingTel and SIA generated the most “value” out of their CEOs, while based on ROE, SGX, Starhub, ST Engineering, SIA and YZJ performed well. Based on their respective 2022 share price performance, pay for the CEOs of Seatrium, SCI and KEP appear to be well-justified.
KEY HIGHLIGHTS Sector REITs: 3QFY23: LREIT (in line) and 1Q23: SASSR (slightly above). Results Singapore Post (SPOST SP/HOLD/S$0.515/Target: S$0.46): FY23: Results in line with expectations; group strategic review initiated. StarHub (STH SP/BUY/S$1.01/Target: S$1.37): 1Q23: Exceeds expectations; strong start to 2023. UMS Holdings (UMSH SP/HOLD/S$0.97/Target:S$0.97): 1Q23: Results in line with expectation, remain cautious on near-term outlook. Update CapitaLand Investments (CLI SP/BUY/S$3.74/Tar...
GREATER CHINA Economics Inflation: Headline inflation lower; core holds steady. Money Supply: Liquidity remains ample, but households delevered. Sector Automobile: Weekly: April car sales beat; further recovery in the first week of May. Maintain UNDERWEIGHT. Top BUYs: BYD, Li Auto and CATL. Internet: Cloud industry development facilitated by recent AIGC breakthrough. Results JD.com (9618 HK/BUY/HK$135.00/Target: HK$216.00): 1Q23: Earnings beat; soft 2Q23 top-line growth. INDONESIA Sector Proper...
1Q23 headline revenue and service revenue grew 8.7% yoy and 11.0% yoy respectively, driven by higher ARPU uplift across all segments and the consolidation of MyRepublic Broadband. The group also exceeded its 2023 guidance checklist in 1Q23. StarHub is expected to incur most of its DARE+ transformative investments in 2023 and will begin reaping the rewards from 2024 onwards, in our view. Maintain BUY with a higher target price of S$1.37 (S$1.35 previously).
KEY HIGHLIGHTS Results Lendlease Global Commercial REIT (LREIT SP/BUY/S$0.735/Target: S$0.87): 1HFY23: Steady growth and resilient NPI margin. StarHub (STH SP/BUY/S$1.11/Target: S$1.35): 2022: Setting the stage for a transformation. MONTHLY TECHNICAL - INDICES OUTLOOK FTSE Straits Times Index (STI IND): Upward strength is likely to be continued
GREATER CHINA Update Xiaomi Corp (1810 HK/HOLD/HK$12.84/Target: HK$12.70): 4Q22 results preview: Another slow quarter, but the worst is over. INDONESIA Update Indo Tambangraya Megah (ITMG IJ/SELL/Rp36,500/Target: Rp30,000): 2023 net profit could decline 29.8% on lower coal ASP. MALAYSIA Results Hartalega Holdings (HART MK/HOLD/RM1.62/Target: RM1.46): 3QFY23: Falling into losses alongside industry, but bottoming in earnings is fast approaching. Upgrade to HOLD. SINGAPORE Results Lendlease Glob...
2022 revenue and service revenue grew 13.9% yoy and 17.2% yoy respectively, driven by the consolidation of StarHub’s recent acquisitions and broad-based growth across all segments. However, 2022 PATMI fell 58.3% yoy as upfront investments continue to compress margins. StarHub is expected to incur most of its transformative investments in 2023 and will begin reaping the rewards from 2024 onwards. We maintain BUY with a higher target price of S$1.35 (S$1.30 previously).
GREATER CHINA Sector Automobile: Weekly: China EV sales rebounded in Nov 22, but ICE-car sales declined. Maintain UNDERWEIGHT. Top picks: CATL, FYG and Xusheng. INDONESIA Initiate Coverage Bank Tabungan Pensiunan Nasional Syariah (BTPS IJ/BUY/Rp2,950/Target: Rp3,700): Solid earnings in 2023 with attractive valuation. MALAYSIA Results Bermaz Auto (BAUTO MK/HOLD/RM1.99/Target: RM2.06): Results above expectations. Strong sales momentum expected to continue in 2HFY23, fuelled by strong orderbook b...
Starhub is expected to deliver S$500m in cost savings over 2022-26 under its DARE+ initiative. This entails spending S$310m to drive incremental net profit stack of S$80m from 2026 onwards – suggesting a robust three-year earnings CAGR of 15% over 2023-26. Given the hefty share price correction ytd, we upgrade the stock from HOLD to BUY with a target price of S$1.30. The stock currently trades at -2SD below its mean EV/EBITDA of 7x. Market consolidation is a key re-rating catalyst.
KEY HIGHLIGHTS Update StarHub (STH SP/Upgrade to BUY/S$1.05/Target: S$1.30): Compelling risk-reward given attractive valuation. Earnings step-up will come from cost synergies and enterprise business expansion. TRADERS’ CORNER iFAST Corp (IFAST SP): Trading Buy Singapore Exchange (SGX SP): Trading Buy
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