KEY HIGHLIGHTS Sector Offshore Marine: A perfect storm for oil prices with higher geopolitical risks and a potentially stronger Chinese economy. Raise target price for our top pick Seatrium to S$2.80. TRADERS’ CORNER Hong Fok Corp (HFC SP): Trading BUY Raffles Medical Group (RFMD SP): Trading SELL
GREATER CHINA Sector Hong Kong Developers And Landlords Expect the strong performance of the stock market to have a positive impact on property prices. INDONESIA Update Summarecon Agung (SMRA IJ/BUY/Rp700/Target: Rp865) Potential further re-rating from SMIP IPO and more rate cuts. MALAYSIA Update KPJ Healthcare (KPJ MK/HOLD/RM2.07/Target: RM1.90) KPJ’s transformation programme continues to gathe...
As recently as a month ago, oil prices appeared fragile with angst about lower Chinese demand and higher supply from OPEC+. China’s recent massive stimulus measures plus significantly worsening Israel-Iran tensions saw a 14% rally in oil prices since the end of September. Upstream oil companies like RHP and REXI are direct beneficiaries of the higher oil prices. We raise our target price for STM to S$2.80 on the back of potential removal of its regulatory overhang and positive sentiment tow...
KEY HIGHLIGHTS Strategy Alpha Picks: Outperforming For Sep 24 And 3Q24 Our Alpha Picks portfolio beat the STI, rising 5.4% mom in Sep 24 and 7.9% qoq on an equal-weighted basis. Add CLI, CSSC, DFI and SATS, and remove ST for Oct 24. Update Mapletree Industrial Trust (MINT SP/BUY/S$2.50/Target: S$3.05) Further expansion in Japan with potential for redevelopment. TRADERS' CORNER Oversea-Chinese Banking Corp (OCBC SP): Trading BUY Keppel DC REIT (KD...
GREATER CHINA Strategy Alpha Picks: October Conviction Calls: Adding CATL, Geely and Plover Bay to our BUY list. INDONESIA Strategy Alpha Picks: Defensive Stance Worked In Sep 24: Our picks are ASII, BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: A Variety of Event Drivers: Our Alpha Picks outperforms as hoped. Oct 24 picks: EcoWorld, Gamuda, Lagenda, MYEG, Pekat, RGB, RHB Bank, Sime Darby, VSI and Yinson. SINGAPORE Strategy Alpha Picks: Outperforming ...
Our Alpha Picks portfolio outperformed in Sep 24, rising 5.4% mom on an equal-weighted basis and beating the STI by 1.3ppt. On a quarterly basis, our portfolio also outperformed the STI by 0.3ppt for 3Q24. The outperformance in Sep 24 was driven by STM, SCI and GENS, while CSE and MINT underperformed. Our Alpha Picks portfolio has now outperformed the STI in 11 out of the past 12 months and six out of the past eight quarters.
Clearly concerned about the direction of its economy, the Chinese government released a raft of stimulus measures last week that seemingly changed investor sentiment towards the Hong Kong and China markets overnight. While structural challenges remain, we highlight 14 stocks that have meaningful revenue exposure to China should these stimulus measures prove to be a game-changer. Our top picks for 2H24 remain CLI, GENS, KEP, MINT, OCBC, SCI, STE, VMS and YZJSGD.
Sentiment on oil prices remains fragile with worries over lower demand and higher supply taking centre stage. However, rig day rates and utilisation rates remain robust even in the face of contract cancellations in Saudi Arabia in 2Q24 as several of the jack-ups have found replacement work. Importantly, Seatrium is arguably oil-price agnostic given its exposure to the lower risk, late-cycle segment of field production via its FPSO construction projects in Brazil for Petrobras. Maintain OVERWEIGH...
GREATER CHINA Strategy Alpha Picks: September Conviction Calls: We expect an improving operating performance among selected companies in September, and add AIA, COLI, Desay SV, Galaxy Entertainment, Meituan, Ping An and TUL to our BUY list and add Li Auto as a SELL. INDONESIA Strategy Alpha Picks: Trailing The JCI’s Strong Performance In Aug 24: Our picks are ICBP, TOWR, BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Adapting To A Bipolar Market: Our Al...
KEY HIGHLIGHTS Strategy Alpha Picks: Strong beat; add STM and remove CENT, MPM and FEHT from our portfolio. Our Alpha Picks portfolio rose 0.8% mom in Aug 24 on an equal-weighted basis, beating the STI by 1.2ppt. TRADERS' CORNER Yangzijiang Shipbuilding (YZJSGD SP): Trading BUY AEM Holdings (AEM SP): Trading BUY
Our Alpha Picks portfolio had a solid month in August, rising 0.8% mom on an equal-weighted basis, beating the STI by 1.2ppt. The outperformance was driven by CENT, MINT and FEHT, while MPM, VMS and CVL underperformed. Our Alpha Picks portfolio has now outperformed the STI in seven out of the past eight months. For Sep 24, we add STM while removing CENT, MPM and FEHT.
After Powell’s Jackson Hole speech on 23 August, we see a turning point starting with a US Fed rate cut in Sep 24 and lower rates heading into 2025. In the Singapore market, REITs and the property sector should benefit, as should highly-geared companies and those looking to recycle capital. Our current forecasts have incorporated lower NIMs for banks which we believe are protected by their high dividend yields.
KEY HIGHLIGHTS Results Lendlease Global Commercial REIT (LREIT SP/BUY/S$0.565/Target: S$0.73) 2HFY24: Bumpy contribution from Sky Complex but backfilling in progress. Sembcorp Industries (SCI SP/BUY/S$4.45/Target: S$7.47) 1H24: A resilient performance that beat expectations. Venture Corporation (VMS SP/BUY/S$14.40/Target: S$16.17) 2Q24: Slight earnings miss amid continued sequential improvement; expect a better 2H24. TRADERS' CORNER Keppel DC REIT (KDCREIT SP): Trading BUY ...
GREATER CHINA Sector Internet: Strategic revamp to revitalise e-commerce GMV growth. Results Wharf Real Estate Investment Co (1997 HK/BUY/HK$20.10/Target: HK$28.30): 1H24: Underlying net profit up 2% on positive retail rental growth and lower funding cost; awaiting cyclical factors to improve. INDONESIA Results United Tractors (UNTR IJ/SELL/Rp24,150/Target: Rp20,000): 2Q24: Continued weakness; in line with consensus estimates. MALAYSIA Sector Utilities: Government likely to award short-term PP...
The resiliency of SCI’s business model came through in 1H24, with the company reporting a net profit of S$540m (+2% yoy) that beat our and market expectations. This was despite the maintenance shutdown of its Singapore cogeneration plant and weakness in its renewables business in China. SCI’s outlook remains robust with the reaffirmation of its renewables business’ targets and a new strategic plan to grow its integrated urban solutions business in SE Asia. Maintain BUY. Target price: S$7.47.
GREATER CHINA Strategy Alpha Picks: August Conviction Calls: We expect stimulus to be announced in August and add COSCO Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and add SELL call on WuXi Bio, and XPeng. INDONESIA Strategy Alpha Picks: Underperformance in Jul 24: Our picks are BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Raising The M&A And Monetisation Bets: Our Alpha Picks marginally beat the KLCI. Jul 24 picks: Ekovest, Gamu...
GREATER CHINA Economics PMI Stuck in a soft patch. Results New Oriental Education & Technology Group (EDU US/BUY/US$69.25/Target: US$90.00) 4QFY24: Earnings miss; impact from East Buy to carve out after 1QFY25. Xinyi Solar Holdings (968 HK/HOLD/HK$3.71/Target: HK$4.00) 1H24: In line; murky demand outlook ahead. Downgrade to HOLD. Update Prudential (2378 HK/BUY/HK$69.90/Target: HK$12...
For Jul 24, our Alpha Picks portfolio rose 4.7% mom on an equal-weighted basis, beating the STI by 1.0ppt. The strong outperformance was driven by CVL, CSE and ST, while FRKN, SCI and GENS underperformed. Our Alpha Picks portfolio has now outperformed the STI in six out of the past seven months. For Aug 24, we add SPOST while removing SIAEC from our Alpha Picks portfolio.
Despite a small blip in the jack up-rig sector, demand and supply dynamics in the O&M industry continues to tighten, thus cementing the robust utilisation and day rate trends for both rigs as well as offshore vessels. Small/mid-cap O&M stocks in Singapore have done well ytd in stark contrast to STM. Key US oil services companies’ 1H24 results have shown continued strength in international segments, reinforcing our confidence in the sector. Maintain OVERWEIGHT on the sector.
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