| MAYBANK KIM ENG | CGS CIMB |
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ComfortDelGro (CD SP) Buy CDG, Short AirAsia
Domestic first. International second. For trading-oriented investors, we recommend a pair trade of Long CDG and Short AirAsia, presenting a total return of 75%. We believe the faster recovery in land transport vs aviation will catalyse the divergence in share price performance. AirAsia has proposed a placement to raise MYR454.5m. That said, AAGB may need to tap equity and debt markets again in the future, given its poor earnings outlook. In contrast, land transport operator CDG is set to recover in FY21E onwards, driven by the gradual recovery in ridership and easing of social distancing measures domestically.
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MISC Bhd Is the selloff in MISC shares an opportunity?
■ The selloff in MISC opens up an opportunity for investors to benefit from the likely 2H21F recovery in tanker freight rates, and MISC’s VLEC deliveries. ■ We reiterate Add with an unchanged SOP-based TP of RM7.63, although investors need to overlook a likely weak set of 4Q20F and 1Q21F results
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CGS CIMB |
CGS CIMB |
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Lenovo Group Strong PC demand to drive earnings growth
■ 3QFY3/21 core net profit rose 27% yoy to US$329m, 13% better than our forecast, thanks to record-high PBT margin and shipments in PC segment. ■ PC segment will lead earnings growth on work/study/game-at-home demand. ■ Reiterate Add, with an unchanged HK$11.68 TP, based on CY22F 15x P/E.
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Alibaba Group Going heavily into new retail and local retail
■ Non-GAAP net profit for the quarter was Rmb59.2bn, up 27% yoy, in line with our expectation. The adjusted EBITA margin for the cloud computing segment continued to improve, reaching the break-even level. ■ Going forward, Alibaba will step up new business investment in its core commerce segment, especially in Taobao Deals, Taobao Live, Taoxianda, Taobao Short Video and Taobao Grocery. ■ We expect revenue from the cloud segment to grow by 69% and 60% yoy in 4Q FY3/21F and FY3/21F, respectively. ■ Reiterate Add with a new DCF-based TP of HK$341.
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