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Sembcorp Marine (SMM SP)
New Order Win Continues Its Positive Momentum
While SMM’s new order win worth S$200m from the Brazilian Navy was largely expected, this nevertheless underscores the company’s continuing positive momentum and we expect more conventional and renewables orders in the near to medium term.
SMM’s robust rate of deliveries in 1Q22 has led to material balance sheet improvement with its net debt/equity declining to 0.38x at end-1Q22 from 0.49x at end-4Q21. Maintain BUY. Target price: S$0.156.
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Astro Malaysia (ASTRO MK)
1QFY23: In Line; Lower Revenue Contribution From All Segments
Astro booked 1QFY23 core net profit of RM119m (-19% yoy; -9% qoq) as TV, adex and home shopping recorded a lower revenue base in the quarter. Accounting for 23% of our full-year forecast, the results are in line, in our view. We expect a stronger 2H as it coincides with World Cup 2022 – an opportunity to upsell for the TV and adex segments. Content cost is fully hedged for FY23. The stock offers an attractive
dividend yield of 8%. Maintain HOLD with a target price of RM1.03.
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Beshom Holdings Bhd
An overlooked growth and defensive play
■ We initiate coverage on Beshom, one of Malaysia’s largest and oldest MLM operators, with an Add rating given strong FY21-24F EPS CAGR of 12.1%.
■ We see it as a potential beneficiary of downtrading and rising gig economy due to rising inflation, backed by its established brands and attractive payout.
■ Beshom is in a net cash position with strong FCF generation; forecast dividends yields of 5-8% in FY22-24F vs. sector average of 2.5-3.0%.
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Capitaland Investment / CLI ($3.81, down 1 cent) announced that it has established its fi rst onshore renminbi (RMB) fund in China, in
partnership with a domestic asset management company. In line with CLI’s asset-light strategy to grow its funds under management (FUM), it
holds a 12% stake in the RMB700 million fund. Capitalising on a special situation opportunity arising from China’s current market environment, the fund is acquiring a quality office building in Shanghai at an attractive price.
At $3.81, market cap of Capitaland Investment is S$19.9bln, trailing 12-mth P/E is 10x, current P/B is 1.3x and dividend yield is 3.9%.
According to Bloomberg consensus, there are seventeen buys and one hold recommendation on the stock while the average of the various analysts’ target price on Capitaland Investment is $4.27, representing a potential upside of 12%.
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Singapore Post ($0.65, up 0.5 cent) released their annual report yesterday and we highlight the key points from the report.
SingPost continues to maintain focus on service quality in Singapore, and kept to commitments to the Quality of Service as regulated by IMDA. Singpost has supported the nation through various national deliveries, including ART kits. Through the last year, eCommerce logistics revenues continued to grow and is now seeing domestic eCommerce logistics revenue accounting for more than 40% of the domestic business.
SingPost’s market cap stands at S$1.5bln and currently trades at 15.5x forward PE and 1.1x PB, with a dividend yield of 3.7%. Consensus target price stands at S$0.82, representing 26.1% upside from current share price. Given that price has declined since our last report during earnings release, potential upside base on consensus is also now more favourable, and that the Singapore reopening play is in motion which might possibly result in higher net profi t recovery and dividend increase, we therefore upgrade our rating from a HOLD to ACCUMULATE.
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