Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
In the past 12 months, the sector has outperformed the JCI by 25%, which we attribute to the 47% yoy infrastructure budget increase and establishment of SWF. For now, SWF has a US$3.8b investment fund. However, the combination of concerns over the rising interest expenses, which rose 29% yoy in 2020 to Rp7.8t, and the lower-thanexpected burn rate due to the implementation of EPAR, has dampened the construction sector’s 2021 prospects. Downgrade to MARKET WEIGHT.
GREATER CHINA Strategy Alpha Picks: Greater China April Conviction List: The recent market pullback is a good window to accumulate stocks with a strong earnings outlook. We are adding 12 stocks − including Li Ning, Haidilao, JD.com and Trip.com − to our BUY list. INDONESIA Strategy Alpha Picks: Underperformed In A Weak Market: We decided to reduce exposure to the construction sector by dropping WSKT. Our picks are: KLBF, BMRI, BSDE, WIKA, UNTR, INTP, ASII and BBTN. MALAYSIA Strategy Alpha Pick...
WTON’s 2020 net income plunged 75% yoy on a lower utilisation rate of 53% (2019: 88%) and revenue dropped 32% yoy. 2020 net income was above our and consensus estimates by 28% and 9% respectively. We raise our 2020 net income estimate by 9% as we do not expect impairment in 2021. A yoy new contract growth of 80% and utilisation rate target of 70% should support our 2021 net income growth estimate of 185% yoy of Rp365b. Maintain BUY with a new target price of Rp570.
GREATER CHINA Strategy Highlights From The Two Sessions: The 14th FYP will focus on innovation and new consumption; key beneficiaries will be the consumer, energy, healthcare, industrials and IT sectors. Results S-Enjoy Service Group (1755 HK/BUY/HK$22.90/Target: HK$28.00): 2020: In line with expectations; management aims to triple profit by 2023. Sunac China Holdings (1918 HK/BUY/HK$32.40/Target: HK$42.00): 2020: Results beat consensus estimates; surprise improvement in gearing ratio. INDONESI...
In the past three months, the sector has outperformed the JCI Index by 61%. Since our upgrade call, the sector has outperformed the JCI by 55%. We believe this was fuelled by companies’ combined new contract target of Rp133t for 2021 and potential divestment following the establishment of SWF. A supportive environment in 2021 should help construction companies to generate 83% yoy EBITDA growth and 2% average dividend yield for 2021. Maintain OVERWEIGHT.
We share management’s optimism on 2021 and revise up our 2021 new contract estimate by 14% to Rp6.4t (80% of management’s 2021 new contract target of Rp8.0t) and 2021 utilisation rate to 70% (previously 65%). These should lead to a 40% yoy revenue increase in 2021; with steady opex management, WTON’s net income should jump 3x in 2021. Note that WTON’s share price has dropped 8% in the last 12 months. Maintain BUY. Target: Rp520.
GREATER CHINA Sector Aviation: China tightening domestic traffic ahead of CNY, but negatives fully priced in. INDONESIA Update Wijaya Karya Beton (WTON IJ/BUY/Rp418/Target: Rp520): 2021 EPS could potentially triple yoy on higher utilisation rate. MALAYSIA Update British American Tobacco (ROTH MK/HOLD/RM12.98/Target: RM14.10): Positives tied to Budget 2021 initiatives to clamp down on illicits have been fully priced in. Downgrade to HOLD with an unchanged target price. SINGAPORE Sector REITs: ...
The JCI returned -3.3% yoy in 2020, underperforming the MSCI Asia Pacific ex Japan index (+23.4%). Sectors that outperformed were metal & gold, manufacturing and media. For 2021, we would like to focus on sectors that underperformed in 2020 as they could rebound - utility, property and oil & gas, while stocks that have declined by more than 10% should also be attractive. Our picks are AKRA, PGAS, BSDE, CTRA, SMRA, MAPI, BBNI, BBTN, BMRI and WTON.
GREATER CHINA Economics Taking Stock: We raise our real GDP growth forecasts to 1.8% yoy and 7.0% yoy for 2020 and 2021 respectively on the back of better-than-expected net exports and industrial production. Sector Automobile: Weekly: Auto sales grew 12.8% yoy in Sep 20, beating expectations. Maintain MARKET WEIGHT. Top picks: Weichai, Brilliance, CATL and Minth. Catering: Hotpot and barbecue leading consumption recovery. Update ANTA Sports Products (2020 HK/BUY/HK$85.30/Target: HK$95.00): 3Q20 ...
GREATER CHINA Sector Catering: Promising future; no pandemic fears. INDONESIA Update Wijaya Karya Beton (WTON IJ/BUY/Rp246/Target: Rp400): Expect 5x yoy jump in 2021 net income on the back of a low base. MALAYSIA Results Sapura Energy (SAPE MK/HOLD/RM0.12/Target: RM0.13): 1HFY21: Positive profit surprise from E&C more than offset rig and energy losses. Cash flow improved substantially. Upgrade to HOLD. Scientex (SCI MK/BUY/RM9.50/Target: RM10.43): 4QFY20: Record high quarterly results, bringin...
WTON recently cut its new contracts target by 54% to Rp5.3t with utilisation rate expected at around 60% for 2020. We expect net income to jump by five-fold to Rp314b in 2021. We believe the potential 47% yoy increase in infrastructure spending budget and construction of the Jakarta MRT Phase 2 should boost prospects in 2021. Historically, over the last five years, WTON has been able to secure 2% of the infrastructure budget’s value as new contracts. Maintain BUY with a new target price of Rp400...
The Ministry of Public Works has awarded Rp35t worth of projects ytd and is scheduling to put another Rp38t worth of projects up for tender in 2H20. It has proposed a Rp115t infrastructure fund for 2021, up 51% yoy. In 5M20, PTPP secured the biggest contract worth Rp7.5t. Following the project restart, project completion and asset divestments, construction projects could book in a 200% hoh rise in net income in 2H20. For 2021, we expect the industry to book 62% net income growth with WSKT bookin...
REGIONAL Sector Plantation: Guest speaker Mr Desai has confirmed that India would need to start buying palm oil as it would have very low inventory once demand picks up after the lockdown is lifted. GREATER CHINA Sector Machinery: May 20: Excavator sales up 68% yoy, strong domestic demand well sustained. Update JD.com (JD US/BUY/US$56.52/Target: US$66.00): Secondary listing in Hong Kong. INDONESIA Results Wijaya Karya Beton (WTON IJ/BUY/Rp294/Target: Rp340): 1Q20: Net income up 3% yoy despite...
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