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CGS CIMB |
UOB KAYHIAN |
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Property Devt & Invt New home sales remain slow in Aug 24
■ Sales of private homes (ex-ECs) fell 63.6% mom/47% yoy in Aug 2024. ■ 8M24 new home transactions are tracking our annual estimates, at 45-54% of our 2024F forecast. ■ Retain sector Neutral. Our preferred picks are CLI, followed by CIT and UOL.
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Singapore Airlines (SIA SP) Weaker-than-expected Pax Load Factor A Sign Of Increased Competition
SIA’s pax load factor remained below pre-pandemic levels for the second consecutive month in Aug 24, although pax capacity supply was still marginally below prepandemic levels. This is a confirmative sign that SIA is facing increased competition, in our view. We estimate SIA’s upcoming 2QFY25 earnings at S$360m-460m, a sizeable yoy decline from 2QFY24’s S$707m and also likely a qoq fall from 1QFY25’s S$452m. Maintain SELL with a slightly higher target price of S$5.83.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Gloves – Malaysia US Raises China Gloves Tariffs In Protectionism, Trade Rivalries
A further precipitous tariff hike and earlier implementation timeline announced by the US authority on China’s medical-grade gloves are poised to revitalise investors’ sentiment on the Malaysian glove sector. With the sector’s post-pandemic recovery eclipsing earnings amid demand moderation, domestic glovemakers should progressively reclaim market share from China, sustaining concrete ASP trajectories and margin upticks. Maintain OVERWEIGHT.
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Marco Polo Marine (MPM SP) Deeply undervalued
Vessels alone worth SGD195m, similar to mkt cap We believe MPM is deeply undervalued. Using peer Atlantic Navigation’s (AN) recent vessel sales as a gauge of value, we estimate MPM’s fleet alone to be worth ~SGD195m, close to its market cap, with net cash and this is excluding its yard. AN recently sold the majority of its vessels for USD183m. But MPM’s fleet is much younger with an average age of 7 years (including the new CTVs, CSOV). On MPM’s book, its OSVs and barges are worth SGD60m. The CTV and upcoming CSOV are worth another SGD105m. Maintain BUY on MPM as CSOV and CTV earnings should commence in FY25E. Coupled with higher charter rates and an increase in ship repair volumes, FY25E earnings should jump. This should represent upside for MPM. Our TP of SGD0.08 is based on 11x FY24E P/E.
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| MAYBANK KIM ENG | MAYBANK KIM ENG |
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Bursa Malaysia (BURSA MK) ESG 2.0: Remains at the forefront
Above average in ESG score, at 68/100 We review Bursa’s ESG matters post the release of its FY23 Sustainability & Corporate Governance Reports. Our ESG score for Bursa is updated to 68 (out of 100) vs. 69 in our last review, above average. Positively too, Bursa achieved carbon neutrality for the 3rd consecutive year in 2023. Major development in 2023 is the start of operations by BCX, supporting the country’s efforts to transition to a low-carbon economy.
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Malaysia Gloves Sector Christmas comes earlier
A boost to Malaysia glove makers competitiveness We are pleasantly surprised by US’ final USTR modifications on China tariffs, which will raise tariffs on China-made medical and surgical gloves to 50% by 2025 and 100% by 2026 - well above the 25% proposed in May 2024. This increase will make Malaysia gloves relatively cheaper, boosting their competitiveness in the US market. We maintain tactical POSITIVE on the glove sector and expect earnings recovery in the next 12-15 months, before additional capacity from China’s overseas expansion picks up in 2026. Our top BUYs are HART and KRI. We U/G TOPG to a tactical BUY.
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