GREATER CHINA Results China Longyuan Power (916 HK/BUY/HK$5.72/Target: HK$6.40): 1Q24: Below expectations; low wind speed weighed on performance. COSCO SHIPPING Ports (1199 HK/BUY/HK$4.62/Target: HK$6.75): 1Q24: Results in line; steady performance in a seasonally slow quarter with headwinds. Dian Diagnostics (300244 CH/BUY/Rmb14.13/Target: Rmb18.50): 1Q24: ICL revenue growth satisfactory; esoteric testing and self-developed product segments remain 2024’s key growth drivers. Foshan Haitian Flavou...
MINT achieved a broad-based positive rental revision of 6.6% in 4QFY24 for renewed leases across all property segments in Singapore. Management intends to recycle its assets and diversify into established data centre markets in Asia Pacific and Europe. The acquisition of the Osaka data centre was completed in Sep 23 and it has started to contribute since 3QFY24. MINT provides an FY25 distribution yield of 6.1% (DCREIT: 5.5% and KDCREIT: 5.6%). Maintain BUY. Target price: S$3.02.
KEY HIGHLIGHTS Sector REITs 1Q24: CLAR (in line) and SUN (in line). Results iFAST Corp (IFAST SP/HOLD/S$7.10/Target: S$7.64) 1Q24: Another record-high AUA; better-than-expected contributions from HK ePension division. Mapletree Industrial Trust (MINT SP/BUY/S$2.27/Target: S$3.02) 4QFY24: Singapore generated broad-based positive rental reversion. Update CapitaLa...
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
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.
Interest rates have peaked but the pace of monetary easing is uneven. The ECB is likely to cut interest rates ahead of the FED. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from a continued recovery in visitor arrivals and resilient consumer spending: BUY CLAS (Target: S$1.45), FEHT (Target: S$0.82), FCT (Target: S$2.73) and LREIT (Target: S$0.93). BUY FLT (Target: S$1.52) and KDCREIT (Target: S$2.10) due to a high proportion of Euro-denominated borrowings.
nterest rates in OECD countries have already peaked. Based on the latest summary of economic projections, FOMC participants expect three rate cuts of 25bp in 2024 and the Fed Funds Rate to ease to 4.5% by end-24. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from continued recovery in visitor arrivals and resilient consumer spending. BUY CLAS (Target: S$1.45), FCT (Target: S$2.73), FEHT (Target: S$0.82) and LREIT (Target: S$0.93).
For the 21 S-REITs under our coverage, five were above expectations with eight below expectations. The hospitality sub-sector registered the strongest NPI growth, averaging 13% yoy. We saw positive rental reversions across retail, office and logistics properties. Maintain OVERWEIGHT. Focus on blue chip S-REITs with resilient balance sheets. BUY CLAS (Target: S$1.45), FCT (Target: S$2.73), FEHT (Target: S$0.82), FLT (Target: S$1.65) and LREIT (Target: S$0.93).
GREATER CHINA Strategy Alpha Picks: March Conviction Call: Adding CMB, COLI, CR Beer, Kuaishou and TUL to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Significant Outperformance In Feb 24: Our picks are BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Focusing On Earnings Momentum: Our Alpha Picks underperformed the KLCI in Feb 24 (-0.9% vs 2.5%). Mar 24 picks significantly feature companies with good earnings momentum. SINGAPORE...
Inflationary pressure continues to ease, albeit at a more gradual pace. Rate cuts are on the horizon, although not as early as March. S¬-REITs have strong defensive qualities and benefit from lower interest rates. Maintain OVERWEIGHT. Our top picks are hospitality and retail plays, which benefit from continued recovery in visitor arrivals and resilient domestic consumer spending. BUY CLAS (Target: S$1.45), FCT (Target: S$2.73), FEHT (Target: S$0.82) and LREIT (Target: S$0.93).
Although the FSSTI recorded a decline of 0.4% mom in Feb 24, more than half of our picks, especially the small/mid-caps (Frencken, Marco Polo Marine and Food Empire), recorded decent gains. Our Alpha Picks portfolio rose 1.6% mom on an equal-weighted basis, outperforming the FSSTI by 2.0ppt. For Mar 24, we add Riverstone, and take profit on SATS and Valuetronics.
The Budget 2024 unveiled by Deputy Prime Minister and Minister of Finance Lawrence Wong continued its strategy of helping Singaporeans contend with the rising costs of living, lending support for mid-career and lower income workers to upskill, investing in the country’s energy transition, and making slight changes to taxes for property developers. Importantly, Singapore has set aside S$1b to invest in new AI initiatives.
GREATER CHINA Strategy Alpha Picks: February Conviction Calls: We remain hedged, adding COSCO Shipping Holdings and Foxconn Industrial Internet to our BUY list, but include additional SELL calls on Li Auto and Xpeng. INDONESIA Strategy Alpha Picks: Outperformance in Jan 24: Our picks are EXCL, MAPI, BMRI, JSMR, BBNI, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Eyes Also On Results Season Winners: Our Alpha Picks performance again trounced the KLCI in Jan 24 (+9.6% vs +4.0%). Feb 24 pic...
There are healthy signs that inflationary pressure has abated. Rate cuts are on the horizon but will not come as early as March. Maintain OVERWEIGHT. Our top picks are CDREIT (Target: S$1.48), CLAS (Target: S$1.45), KORE (Target: US$0.59), KREIT (Target: S$1.24), LREIT (Target: S$0.87) and MINT (Target: S$2.98).
In Jan 24, our Alpha Picks portfolio beat the STI by 2.7ppt and 0.7ppt on an equal- and market-weighted basis respectively, as the STI slipped into negative territory. Stocks began the year on a subdued note with the external environment remaining uncertain. For Feb 24, we add Yangzijiang Shipbuilding (YZJ) as we see dividend upside and potential earnings upgrades from its upcoming results and remove Seatrium (STM) as uncertainty over the size of its 2023 write-offs may weigh in the short term.
GREATER CHINA Sector IT Hardware: Better visibility for specification upgrade trend. Maintain OVERWEIGHT. Update CSPC Pharmaceutical Group (1093 HK/BUY/HK$5.99/Target: HK$7.80): Optimising allocation of assets to unlock market value and support business development. INDONESIA Results Bank Central Asia (BBCA IJ/BUY/Rp9,350/Target: Rp10,400): 4Q23: Strong loan growth and higher opex. MALAYSIA Update Bursa Malaysia (BURSA MK/BUY/RM7.35/Target: RM8.05): We expect a favourable re-rating for Bursa...
MINT achieved broad-based positive rental revision of 7.2% in 3QFY24 for renewed leases across all property segments in Singapore. WALE increased from 4.2 to 4.4 years due to several new and renewed leases with an average lease term of 10 years in the Singapore and North America markets. The newly acquired Osaka data centre has started to contribute since 3QFY24. MINT provides FY25 distribution yield of 5.6% (DCREIT: 5.6%, KDCREIT: 5.3%). Maintain BUY. Target price: S$2.98.
GREATER CHINA Strategy Alpha Picks: January Conviction Calls: We add the potential beneficiaries of the upcoming CNY festival − Galaxy Entertainment and Trip.com − to our BUY list, but include SELL calls on BYD and Geely due to the subsidy reduction. INDONESIA Strategy Alpha Picks: Underperformance in 4Q23 and 2023: Our picks are MAPI, BMRI, JSMR, TLKM, BBNI, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Domestic Event Winners: Our Alpha Picks outperformed the KLCI in Dec 23. Jan 24 pick...
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