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LIM & TAN |
LIM & TAN |
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City Developments Limited ($5.22, up 2 cents) reported that for it’s 1H24 results, it achieved a 32.0% increase in net attributable profit after tax and non-controlling interest (PATMI) of S$87.8 million (1H 2023: S$66.5 million). The increase was supported by divestment gains as part of the Group’s capital recycling efforts. Notably, results in the previous corresponding period in 2023 included the full recognition of revenue and profits from an Executive Condominium (EC) project, Piermont Grand, of which the Group owns 60%. The Group achieved a lower revenue of S$1.6 billion for 1H 2024 (1H 2023: S$2.7 billion) as 1H 2023 included a S$1.0 billion contribution from Piermont Grand.
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InnoTek Limited ($0.515, unchanged) announced today that it recorded a net profit after tax of S$3.1 million (flat yoy) for the six months ended 30 June 2024 (“1H’24”) while revenue increased by 30.9%, reflecting the Group’s accelerated diversification into new products lines including graphic processing unit servers (“GPUs”), medical devices, and gaming machines. The performance came in below our expectations due to inventory provisions & doubtful debt provisions. Excluding Inventory and doubtful debt provisions, core profit would have doubled yoy to $6million. Excluding the inventory and doubtful debt provisions, 1H’24 core earnings would have been $6million, coming in line with our expectations. Unfortunately due to the one time inventory and doubtful debt provisions in 1H’24, we are reducing our full year estimate from $11 million to $9 million. At it last traded price of $0.515, Innotek’s market cap is $119 million and trades at FY24 PE of 13x. With a net cash position of $56 million, Innotek’s excash PE would be more attractive at 7x. Dividend yield is 3.8%. Management expects a better 2H’24 performance going forward, driven by new customers and new products and turnaround of their Vietnam operations. Price to Book is 0.67x. We maintain an “Accumulate” rating on Innotek. |
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Sea Ltd (SE US) 2Q24: Strong beat; raise TP/earnings
Firing on multiple cylinders; guidance revised up GAAP 2Q revenues grew 23% YoY/2% QoQ and came 5% ahead of MIBG and 3% ahead of street. Adj. EBITDA declined 12% YoY but increased 12% QoQ and came 13% ahead of street expectations. All the operating segment revenues and Adj. EBITDA came ahead of expectations, except for financial services revenues which came 1-2% below. Shopee GMV increased 29% YoY but declined 1% QoQ due to seasonality. This was 7%/3% ahead of MIBG/street. Garena bookings increased 21% YoY/5% QoQ and came 6-7% ahead of MIBG/street est. Shopee GMV guidance revised up to mid-20% YoY growth in 2024 (from high teens).
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Food Empire Holdings (FEH SP) Facing headwinds; D/G to HOLD
Wait for the storm to pass; lowering TP to SGD1.02 1H24 revenue rose 13.6% YoY to USD225.2m, but PATMI declined by 12.8% YoY to USD23.2m, less than we expected, mainly due to short-term price disruption in Russia and higher raw material prices. Improvement in 2H24 is likely to be only marginal, and it’s unlikely to turn around until FY25E. We cut our FY24/25 PATMI forecasts by 11.2% and 11.3%, respectively, and downgrade FEH to HOLD from BUY with a lower TP of SGD1.02 (10x FY24E P/E) from SGD1.30 while we await the short-term headwinds to clear.
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| MAYBANK KIM ENG | MAYBANK KIM ENG |
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CapitaLand Int. Comm. Trust (CICT SP) Steady performance
Resilient portfolio, growing distribution CICT reported 1H DPU of SGD5.43c, -0.4% HoH/+2.5% YoY. Top-line growth coupled with cost management mitigated the impact of higher interest expenses. Portfolio occupancy was steady with strength in retail offsetting the slippage in office. Rent reversions are tracking the full year guide of high single-digit growth but normalisation for offices is likely in 2H. Mgmt. is waiting for an opportune time to undertake capital recycling or redevelopment projects. All in, no major surprises. Valuations are fair but we retain our BUY and SGD2.25 TP on resilient income and credit profile.
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PropNex Ltd (PROP SP) Awaiting recovery
1H24 profit below; retain HOLD and lower TP 1H24 PATMI of SGD19m (-13.8% YoY; -26.2% HoH) came in below our and market expectations at 41%/36% of MIBG/consensus’ full year estimates. While both HDB and private resale volumes were relatively resilient, we note that private new home sales hit a two-decade low. Hence, we trim our FY24E-26E EPS forecasts by 10-14% on fewer transactions. We roll forward our valuation base to FY25E and cut our 12-month TP to SGD0.87 (-7%), still based on a target 15x PE. The group declared an interim DPS of SGD2.25 cents (1H23: 2.50 cents), representing a DPR of 87.6%. We maintain our HOLD rating, supported by a decent yield of over 6%.
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