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Tiong Woon Corporation Holding (TWC SP)
Market Leader Set To Benefit From Strong Growth In The Construction Sector
Tiong Woon is the second-largest crane operator in Singapore with a strong regional presence. It is well-positioned to benefit from the construction and oil & gas upcycles.
We expect EPS to double in FY22 and grow 37% yoy in FY23, driven by higher utilisation rates and double-digit growth in crane rental rates. Initiate coverage with a BUY and a target price of S$0.88, pegged to 0.7x FY22F P/B (+1SD above the P/B mean). Tiong Woon is trading at an attractive FY23F PE of 4.4x and P/B of 0.4x.
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Plantation – Malaysia
Durian – Another Gold Growing On Trees
More oil palm plantation companies are venturing into durian cultivation. This is to reduce dependency on palm oil and also durian is delivering 19x more profit per ha vs oil palm. However, durian cultivation is on a much smaller scale and is only a secondary source of income. Larger-scale planting may still need to be considered as durian cultivation is labour-intensive and has a high failure rate. Maintain MARKET
WEIGHT
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SFP Tech Holdings (SFPTECH MK)
Expansion On Track; Business Surging On New AVLs Inclusion
SFP is bucking the slowing industry trend with a higher number of AVLs secured ytd, thanks to customers’ aggressive expansion and the US-China trade diversion. Its plant 3 will be ready by Nov 22 (3x floorspace to >467,000sf) which could see potential revenue growth by several multiples in a blue-sky scenario. We see multiple legs of growth that can supercharge a three-year revenue/core net profit CAGR of 34%/39%.
Maintain BUY. Target price: RM1.28. |
Singapore Airlines
F1 and MICE events to spur travel demand
■ Upgrade from Hold to Add with a higher TP of S$6.10 (mean FY23F P/BV of
0.95x) as we become more confident about the strong demand outlook.
■ We raise our FY23-25F core EPS forecasts by 55-66% on stronger load
factor and yield assumptions.
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Pharmaniaga Bhd
1H22 a miss; tepid near-term EPS outlook
■ 1H22 results were a miss due to higher-than-expected opex and tax rate. 2Q core net profit fell 68% yoy (-81% qoq) on weaker earnings across the board.
■ The higher levels of staff and A&P costs, while potentially positive for longterm growth, may continue to weigh on near-term earnings, in our view.
■ Downgrade to Hold with a lower TP of RM0.58 (13x CY23F P/E)
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Velesto Energy Berhad
Expecting 2H22F profits from 1H22F losses
■ Upgrade Velesto from Hold to Add after the sharp share price drop over the past three months and because we expect it to recover to profits in 2H22F.
■ While we forecast Velesto to report a 2Q22F loss, on top of the 1Q22 loss, we expect a sharp uptick in 2H22F utilisation rates to result in profits.
■ Our DCF-based TP of 11.5 sen is unchanged (Ke: 16%); we expect robust forward guidance at Velesto’s 2Q22F results briefing on 30 Aug.
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