buysellhold july.23



Food Empire Holdings Ltd

FY24F hurt by higher coffee prices


■ 1Q24 revenue (US$117.5m, -2.6% qoq, +14.5% yoy) was in line with ours/Bloomberg consensus expectations, at 26% of full-year forecasts.

■ Given rising coffee prices, Food Empire plans to adjust its pricing strategy to mitigate the higher costs.

■ Reiterate Add, but lower TP to S$1.73 as we expect margin pressure from higher coffee prices.



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Off to a strong start


■ 1Q24 was a beat on both revenue and EBITDA as Shopee delivered +36% yoy GMV growth while Garena returned to positive growth, led by Free Fire.

■ We think Shopee can return to adj. EBITDA positive in 2Q24F, led by further commission hikes, cost reduction and higher live-commerce unit economics.

■ Reiterate Add with a higher TP of US$88 on a normalising competitive landscape for the ASEAN e-commerce industry



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Frencken Group Ltd

On track to meet FY24F expectations


■ 1Q24 results in line with expectations, with revenue at 25%/24% of our/ Bloomberg consensus FY24 forecasts, and net profit at 21%/19%.

■ Frencken reiterated its guidance that 1H24F revenue will be comparable to its 2H23 revenue.

■ Reiterate Add, with an unchanged S$1.70 TP based on 14.2x FY25F P/E, as Frencken’s semicon segment drives net profit growth over FY24-26F. 



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StarHub Limited

Mobile competition intensifying


 1Q24 results were within expectations and management full-year guidance. FY24 revenue and EBITDA were 23%/22% of our FY24 estimates.

 Service EBITDA was up 0.7% YoY to S$108.4mn excluding D’Crypt which was disposed of in February 2024. Earnings were pulled down by a contraction in mobile and entertainment revenue.



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ComfortDelGro Corp Ltd

Zig platform led the recovery


 1Q24 results were within our expectations. Revenue and PATMI were 25%/20% of our FY24e forecast. 1Q24 net profit increased 24% YoY to S$40.6mn.

 Taxi operations enjoyed the strongest growth with a 39% YoY jump in 1Q24 earnings. Public transportation continues to earn paltry operating margins of 3%, dragged down by lower margin contract renewals in Australia. 1Q is typically the weakest seasonally.


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Silverlake Axis Ltd

Higher OPEX hurt earnings


 3QFY24 earnings of RM23.3mn were below our estimates. 9MFY24 earnings were at 62% of our FY24e. The 33% YoY dip in earnings came from higher-than-expected cost of sales and OPEX despite an increase in total revenue.

 3QFY24 recurring revenue comprising maintenance and enhancement services, insurance ecosystem transactions and services, and retail transactions processing revenue grew 10% YoY, while non-recurring revenue comprising software licensing, software project services and sale of system software and hardware products rose 42% YoY. Higher cost of sales (+53% YoY) and operating expenses (+9% YoY) dragged down earnings. Order backlog of RM180mn going into the rest of FY24 with the total deals pipeline at RM1.2bn. 



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