buysellhold july.23



Singapore REITs Monthly: April24

Pricing in higher-for-longer interest rates


 The S-REITs Index fell 3.1% in April after gaining 0.6% in March, following the Fed’s reiteration of its higher-for-longer interest rate stance. The top performer for the month was Cromwell European REIT (CERT SP, BUY, TP €1.91) – it gained 8% in April after the ECB signalled it would likely cut interest rates in June. The worst performer was Prime US REIT (PRIME SP, ACCUMULATE, TP US$0.12), which fell 17.6% as it has yet to refinance its US$480mn loan maturing in July 2024. The Singapore commercialsub-sector was the top performer in April, gaining 1.1% after better-than-expected positive rental reversion in 1Q24. The worst performing sub-sector was overseas commercial, which was down 8.3% in April, dragged by US office REITs as conditions remain challenging.


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Sea Ltd.

Growth Supported by Spending


 1Q24 revenueexceeded expectations at 25% of our FY24e forecasts. The 23% YoY growth was primarily driven by 33%/21% YoY growth in Shopee and SeaMoney. While a net loss of ~US$24mn fell short of our FY24e forecasts due to continued high S&M spending and US$111mn unrealised equity investment losses



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Grab Holdings

Riding the tourism wave


■ Grab’s 1Q24 GMV (+3% qoq, 19% yoy) and adj. EBITDA (+77% qoq) beat estimates, showing sequential growth despite the weaker seasonality.

■ Grab looks to capitalise on the regional tourism recovery given tourists’ high propensity to spend across its offerings (ride-hailing, food and delivery).

■ Grab lifted its FY24F adj. EBITDA guidance to US$250m-270m and expects 240bp upside to its Deliveries margin in the medium term. Stay Add.



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Netlink NBN Trust

Steady ship with 6% yield


■ NLT declared a FY3/24 DPS of 5.3Scts (+1.1% yoy), in line with expectations, despite a core net profit decline of 3% yoy on higher opex.

■ Fibre connections continued to grow healthily in FY3/24. NLT is committed to a stable DPU in FY3/25F despite lower ICO pricing effective Apr 2024.

■ Reiterate Add with unchanged TP of S$0.95. 



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NetLink NBN Trust (NETLINK SP)

FY24: Soft Results From Higher Costs; Overall Connections Continue To Grow


Driven by higher overall connections, Netlink posted a higher revenue (+1.9% yoy) for FY24. However, FY24 EBITDA (-0.9% yoy) and PATMI (-5.5% yoy) were lower yoy, below our expectations. The soft bottom-line performance was due to a weak 4QFY24, dragged by an S$8.8m one-off expense and higher operating costs. Armed with stable revenue streams and operating cashflows, we continue to like Netlink as a highyielding, safe-haven stock. Maintain BUY with a lower target price of S$0.98. 


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Gas Malaysia (GMB MK)

Likely To See Higher NG Demand In 1Q24; Offset By Lower NG Prices


We expect the company to deliver a sequentially flattish 1Q24 net profit of RM90m. Yoy, the quarter is expected to be characterised by higher NG volume (higher glove production volume) but lower NG prices (-29% yoy, +12% qoq). 2024 will see relatively pedestrian earnings as a result of lower NG prices vs 2023. This will be partly offset by 10% higher demand capacity in the regulated business. Importantly, we expect GMB to raise dividend payout to maintain lush dividends. Maintain HOLD with a target price of RM3.25. The stock offers an attractive dividend yield of 6%. 



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