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PHILLIP SECURIITES |
UOB KAYHIAN |
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Singapore Banking Monthly Interest rates stagnate
▪ June’s 3M-SORA was down 1bp MoM to 3.67% but 1bp higher than the 2Q24 average. 3M-SORA has been hovering around the 3.6% range since Jan 2024. 3M-HIBOR was up 8bps MoM in June to 4.74%, following the increase of 13bps in May.
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Prime US REIT (PRIME SP) On The Verge Of Completing Refinancing
PRIME is on the verge of completing its refinancing, with three lenders in its syndicate of four banks in the final stage of legal documentation. It has completed the divestment of One Town Center in Boca Raton, Florida for US$82m on 10 Jul 24. Aggregate leverage is expected to decline from 48.4% to 45.8%, assuming proceeds are fully utilised to repay debts. PRIME trades at a depressed P/NAV of 0.22x, which already reflects a prolonged downturn in the US office market. Maintain BUY. Target price: US$0.28.
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CGS CIMB |
CGS CIMB |
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Yangzijiang Shipbuilding 1H24F: margin swing
■ We up YZJSB shipbuilding gross margins to 28% for FY24-25F (from c.25%) on sustained weak China steel prices (-10% YTD) at c.Rmb3.7k/tonne. ■ Accordingly, we raise our FY24-25F EPS by 15.0-16.6% and expect YZJSB to deliver core net profit of c.Rmb2.6bn (+12% hoh, +53% yoy) in 1H24F. ■ Given global acceleration of clean gas demand and tight yard capacity, YZJSB is likely to clinch further VLEC/VLAC orders, in our view. ■ Reiterate Add with a higher TP of S$2.50 (still based on 35% premium to regional yards’ average CY24F P/BV) given our improved margin outlook.
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Wilmar International Expect flat earnings in 2Q24F; better 2H24F
■ With stable commodity prices throughout 2Q24, we are expecting WIL to report relatively flat qoq core net profit for 2Q24F, vs.US$328.4m in 1Q24. ■ With a lack of earnings growth as catalyst, we think that negative news flow will continue to weigh on WIL’s share price in the near term. ■ However, we believe downside risks are priced in, and valuations and yield look attractive currently. Reiterate Add; TP unchanged at S$3.94.
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| CGS CIMB | LIM & TAN |
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Banks Higher-for-longer or more cuts in the works?
■ We think that investors are pricing in potentially higher-for-longer US Fed fund rates, but the Fed fund futures still point towards a cut in Sep 24. ■ Sequential earnings growth may be challenging, but structurally higher NIMs (despite rate cuts) and c.6% yield could keep investors’ interest in the sector. ■ Reiterate sector Neutral. 2Q24F earnings could be softer qoq as seasonal highs ease. Dividend commentary will be key in management briefings.
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CapitaLand Investment Limited ($2.81, up 13 cents) announced that it has raised RMB1 billion (approximately S$186 million) from the second tranche of its inaugural sustainability-linked panda bond, bringing the total amount raised to RMB2 billion (approximately S$372 million). The second and fi nal tranche issued aƩ racted strong interest from insƟ tuƟ onal investors with an order book that was 2.64 Ɵ mes subscribed. The panda bond was issued at a fi xed coupon rate of 2.8% per annum. This is a record low coupon rate among panda bonds with a three-year tenor issued under a private placement, which will contribute to lowering CLI’s fi nancing costs. CLI’s market cap stands at S$14.2bln and currently trades at 18.9x forward PE and 1.0x PB, with a dividend yield of 4.3%. Consensus target price stands at S$3.68, represenƟ ng 31.0% upside from current share price. We conƟ nue to like the strong innovaƟ ve and future looking management of CLI coming up with defensible new business models to diff erenƟ ate themselves against new and exisƟ ng compeƟ tors in the market such as the latest new off erings in Europe. CLI conƟ nues with their consistent and aggressive share buy back program with 83mln shares bought around current market price, represenƟ ng 16.4% of total allowable buy back of shares. We maintain an Accumulate raƟ ng on CLI. |
