• What's your approach to investing? If you like hard fundamentals, Phillips Securities has 2 names for you -- and, boy, do they have nice attributes on paper. 

• They have "attractive valuations and dividend yields, cash-rich balance sheets and good earnings visibility," says Phillips Securities in a new year report.

• These 2 are China Avaiation Oil and Valuetronics. And, wait, there's another 8 stocks that the brokerage has in its model portfolio (see table below).

As for the 2 new additions, read on for what the analysts say ....


CAO overview3.23

Phillips10 2024


CHINA AVIATION OIL

 
• International passenger traffic in China surged 12-fold in the first 11 months of 2023.

CHINA AVIATION OIL

Share price: 
$0.87

Target: 
$1.01

The recovery still has legs. Nov 23’s volume was just 55% of Nov 19’s level and estimated to reach 71% in Mar 2024.

Demand could be turbocharged with the easing of visa restrictions for Chinese tourists in some Asian countries.


peggymak4.22Peggy Mak, research manager• Major Chinese airlines have returned to profitability in 3Q23 and booked positive operating cash flows in 1H23.

They have resumed taking deliveries of aircraft on order. China Eastern and Air China recently placed new orders for passenger jets, scheduled for delivery in 2024.

• Maintain BUY with a TP of S$1.01, derived from DCF model.

We expect net profit to double over the next two years. About 56% of the market cap is in net cash of US$308mn (as at end 2022).

CAO cashflow11.23Screenshot of a section of CAO's cashflow statement for 1H23. The cashpile of US$534.3 m is the equivalent of S$711 million, or 96% of its current market cap.

 VALUETRONICS

 

VALUETRONICS

Share price: 
$0.595

Target: 
$0.70

 1H24 PATMI grew 42% YoY to HKD82.1mn, and above our expectations. Revenue and PATMI were 42%/62% of our FY24e estimates.

The revenue decline was due to lower component prices. The company announced a special dividend of HKD4 cents in addition to interim HKD4 cents.

PaulChewPaul Chew, Head of Research Earnings growth was driven by
(i) gross margin expansion from lower component prices and a weaker renminbi;
(ii) an increase in interest income; and
(iii) lower operating expenses, especially depreciation.

 We maintain our BUY recommendation with a target price of S$0.70. We peg our target price to the industry valuation at 11x PE.

With the current cash hoard of HKD1.14bn (or S$199mn), around 82% of the market capitalisation is net cash.

There is visibility of earnings growth over the next two years as Valuetronics’ four new customers ramp up production.

The company trades at a dividend yield of 5.8% and has an outstanding share buyback plan of approx. 47mn shares.

Full report here. 

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings1.860-
Best World2.490-0.010
Boustead Singapore0.9550.005
Broadway Ind0.1570.009
China Aviation Oil (S)0.8750.005
China Sunsine0.400-
ComfortDelGro1.3900.010
Delfi Limited0.875-
Food Empire1.110-
Fortress Minerals0.295-
Geo Energy Res0.300-0.005
Hong Leong Finance2.430-0.010
Hongkong Land (USD)3.440-0.060
InnoTek0.5150.005
ISDN Holdings0.3100.005
ISOTeam0.049-0.001
IX Biopharma0.040-
KSH Holdings0.250-
Leader Env0.049-
Ley Choon0.0550.001
Marco Polo Marine0.0680.001
Mermaid Maritime0.137-0.001
Nordic Group0.295-0.010
Oxley Holdings0.0880.001
REX International0.125-0.001
Riverstone0.9400.010
Southern Alliance Mining0.485-
Straco Corp.0.480-
Sunpower Group0.220-
The Trendlines0.062-0.001
Totm Technologies0.019-0.001
Uni-Asia Group0.800-0.010
Wilmar Intl3.1400.010
Yangzijiang Shipbldg1.730-0.010
 

We have 1578 guests and no members online

rss_2 NextInsight - Latest News