buysellhold july.23




Sector to recover further in 2025F


■ Global semicon sales are expected to improve in 2024F, with growth projections of 13.1%-20.2% yoy, according to WSTS and IDC.

■ In our view, AEM, Frencken and UMS are beneficiaries of the trade diversion into Malaysia and the expected semicon recovery in 2024-25F.

■ Our top small-cap picks to play into the semicon recovery theme are Frencken and UMS.



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Keppel Corp ($6.81, up 6 cents) announced that through its Infrastructure Division, and GenZero, a Temasek-owned investment platform company that is focused on accelerating decarbonisation globally, have signed a Memorandum of Understanding (MOU) at the 2023 United Nations Climate Change Conference, more commonly referred to as COP 28, to jointly pursue opportunities to accelerate the transition to clean energy and the development of sustainable fuel projects across the Asia Pacific.

Keppel Corp’s market cap stands at S$11.3bln and currently trades at 7.5x forward PE and 1.1x PB, with a dividend yield of 5%. Consensus target price stands at S$7.52, representing 12.7% upside from current share price. We continue to like Keppel’s green initiatives and it’s move towards being a global organization, which would help to minimize country/ region risk going forward. We continue to maintain an Accumulate rating on Keppel given its attractive 17% potential upside to consensus target price of $7.52 and over 5% dividend yields (not counting specials such as distribution in species of Keppel REIT and Semb Marine).





Axiata Group (AXIATA MK)

Strategy update


Moving to a “multi-platform builder”

This year’s Investor Day touched on Axiata’s strategy refresh - moving to a “Multi-Platform Builder”, with the targeted financial outcomes (of 10sen DPS, high single-digit total shareholder return, 2.5x net debt to EBITDA) being broadly unchanged. We continue to view Axiata’s overall risk-reward as being positive. Reiterate BUY with an unchanged MYR3.00 SOP-based TP. 



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Recommendation :  BUY 

Fair Value        :  SGD 6.83




  • Acquiring assets to grow renewables capacity
  • Targeting renewable capacity of 26GW by 2028
  • Capital recycling strategy in focus


Sembcorp Industries (SCI) is a leading energy, water and urban development group operating across five continents worldwide. Over the years, SCI’s key financial metrics such as return on equity (ROE) have turned for the better, a trend supported by higher electricity prices as well. The group has also been divesting non-core assets to unlock value and grow its renewables portfolio. Successful execution of its renewables strategy provides further scope for re-rating, though good assets may not come cheap currently. We would look out for a possible inclusion in the MSCI Singapore Index as a catalyst.   



Profitability to further improve in FY24F

 3Q23 net loss narrowed; 9M23 formed 87% of our FY23F loss forecast. We deem this in line as we see better operational performance in 4Q23F.

■ We expect NIO’s profitability will continue to improve in FY24-25F due to improved VPM and battery swap operations, as well as increased EV sales.

■ Reiterate Add, with a higher DCF-based TP of HK$105.

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