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UOB KAYHIAN |
UOB KAYHIAN |
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Singapore Post (SPOST SP) Expect A Strong Performance For 1HFY25
Due to an ongoing shift to digital alternatives and declining letter mail volumes, SPOST has closed 12 post offices in Singapore. The strategic review of SPOST’s Australian business is still underway and is expected to be completed by end-4Q24/early-1Q25. For 1HFY25, we expect strong group operating and net profit growth yoy, largely driven by the consolidation of Border Express and the postage rate hike in 3QFY24. Maintain BUY with the same SOTP-based target price of S$0.61.
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Mah Sing Group (MSGB MK) Multiple Engines For Growth
Mah Sing is advancing its data centre partnerships, with ongoing talks for further partnership at Southville and data centre land sales in Johor Bahru. The plastic manufacturing business is also expanding, with plans for an IPO in the next three years. Mah Sing’s glove business is improving and is targeting profitability in 2H25. The property development segment is going strong, driven by the M-series project. Maintain BUY. Target price: RM2.29.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Property And Property Management
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SAM Eng & Equipment (SEQB MK) Expecting sequential quarterly improvements
Lowering FY25-27E earnings; maintain BUY We cut FY25E EPS by 19% to account for: i) lower aerospace revenue and margins as we factor in a gradual improvement from 2QFY25E after impacted by raw material shortages and material quality defects from a supplier; and ii) a higher group effective tax rate. We also trim FY26-27E EPS by 7%/6% to account for a slower ramp up of its RJ2 + BB1 plants due to delay in the semiconductor sector recovery. Consequently, our new TP is MYR5.71 (previously MYR6.15), based on unchanged 32.7x PER (approx. +1SD of 5Y mean) on FY26E EPS. Maintain BUY.
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| LIM & TAN | LIM & TAN |
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We highlight the key points from Creative Tech’s ($1.28, up 0.08) just released FY24 annual report: Sales for fiscal year 2024 were US$63 million compared to US$56 million for fiscal 2023. Gross profiit as a percentage of sales was 30% in fiscal 2024 compared to 25% in fiscal 2023. Net loss for fiscal 2024 was US$11 million, compared to a net loss of US$17 million in fi scal 2023. Looking ahead to fiscal year 2025, we foresee continual weakness in consumer spending. We will continue to grow our revenue, but it will likely be at a measured pace. Consumption patterns are shining toward the mass market segment. We are seeing strong demand for entry level product models across the speakers, headphones, and camera categories. This will drive the volume of our sales in the entry segment of the Pebble, Sound Bar, and Headphone products. At Creative’s last traded price of $1.28, it is capitalized at $90mln and trades at 1.4x book value. There is no meaningful PE given that Creative has been loss making in the past few years and has just been placed on SGX watchlist given the past few years’ of losses. Cash burnt has averaged $10-20mln in the past 10 years. We would “Avoid” Creatve Tech for now given that it is trading at a 40% premium to its asset value, yet it remains in a loss making & cash burning position with NAV being consistently eroded by its yearly losses of between $10-20mln. (It has also just been placed on SGX’s watchlist.)
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Metro Holdings ($0.475, unchanged) a property investment and development group backed by established retail operaƟ ons, has together with its joint venture partner, the Sim Lian Group of Companies, acquired a freehold prime offi ce property located at 1 Castlereagh Street in Sydney, New South Wales, Australia. Metro Holding’s market cap stands at S$393mln and currently trades at 26.4x PE and 0.3x PB, with a dividend yield of 4.2%. Mid-longer term deep value investors can put Metro on their watch list given that we believe the company is a benefi ciary of lower interest rates going forward given their huge debt level of $651mln (cash of $290mln) and that their property-related assets will benefi t from the lower interest rate environment going forward. Though, there is currently no analyst coverage on Metro. |
