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UOB KAYHIAN |
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IHH Healthcare Bhd Convincing plans in place for organic growth
■ We increase our SOP-based TP to RM7.70 on upgraded FY23-25F EPS forecasts of 12.8-24.7% given positive takeaways from IHH’s analyst briefing. ■ IHH’s plan to open 2,000 beds over FY23F-25F represents a c.17% increase in capacity from its c.11.8k operational beds as of FY22. ■ Its expanded healthcare service offerings to include higher value services, such as proton therapy, will also allow IHH to drive revenue intensity.
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STRATEGY – SINGAPORE Alpha Picks: Add RFMD And THBEV; Remove AZTECH, ST And FEH
In the face of a 3.4% mom decline in the STI, our Alpha Picks portfolio proved resilient in May 23, outperforming by 3.6ppt on a market cap-weighted basis. On an equal-weighted basis, our portfolio surpassed the STI by a heftier 4.9ppt. The top performing stocks in May 23 were Delfi (+18.7% mom), Sembcorp Industries (+17.5% mom) and Civmec (+3.6% mom). For June, we add RFMD and THBEV and remove AZTECH, ST and FEH. Our Alpha Picks portfolio has now beaten the STI in 14 out of the past 15 months.
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UOB KAYHIAN |
PHILLIP SECURITIES |
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STRATEGY – CHINA Alpha Picks: June Conviction Calls
After a steeper-than-expected pullback in May, MSCI China‘s and HSI’s 12-month forward PE have fallen to a relatively attractive 9.7x and 8.7x respectively. As the nonmanufacturing PMI remains in expansionary zone, we expect better macro data ahead to provide the catalyst for a rebound. Overall, we increase exposure to oversold sectors, ie consumer and TMT; add COSCO Shipping Port, KE Holdings, Kuaishou and Kweichow Moutai to our BUY list and Great Wall Motor to our SELL list.
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SATS LTD - Acquisition costs and cargo weakness overshadow recovery
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| PHILLIP SECURITIES | LIM & TAN |
Sasseur REIT - Riding on robust consumption
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We highlight UOB’s ($27.84, down 11 cents) latest investor’s presentation that was held recently, where UOB highlighted their strengths by stating that it had strong Common Equity Tier 1 capital adequacy ratio of 14.0% as at 31 March 2023. It also boasts diversified funding and sound liquidity, with 83.3% loan/deposit ratio. UOB has strengthened it’s coverage, with general allowance on loans (including RLAR) covering 1.0% of performing loans. Currently as a holistic regional bank, with full control of overseas subsidiaries, UOB has entrenched domestic presence and deep local knowledge to address needs of their targeted segments and will focus on profitable niche segments and intra-regional flows.
UOB’s market cap stands at S$46.9bln and trades at 8.1x forward PE and 1x PB. We continue to favour UOB (and by extension OCBC) as it’s valuations are much cheaper than DBS comparatively. On P/B terms, UOB and OCBC at 1x is more attractive than DBS’ 1.4x. UOB has also restarted buying back shares(72K a day) together with OCBC (400K a day) recently around current market prices but not DBS. On dividend yields, while OCBC is most attractive at 6.5%, UOB at 5.8% is still higher than DBS at 5.5%. Lastly, UOB’s growth rate at 26% for FY23 should be the fastest amongst the 3 banks as a result of the integration of their acquisition of Citigroup’s SE Asian franchise. Based on these few factors, we thus maintain our preference for UOB & OCBC over DBS. |
