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UOB KAYHIAN |
UOB KAYHIAN |
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STRATEGY – SINGAPORE
Alpha Picks: Outperforming In 2024
Another month of solid share price performance by banks saw the STI gain 1.3%, which was 2.3ppt better than our Alpha Picks portfolio on an equal-weighted basis. On a priceweighted basis, we outperformed the STI by 0.7ppt for Dec 24 and an even punchier 14.4ppt for 2024. Our Alpha Picks portfolio has now outperformed the STI in 12 out of the past 15 months.
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REITs – Singapore S-REITs Monthly Update (Dec 24)
The Fed is expected to proceed with rate cuts at a cautious and gradual pace. Government bond yields have stabilised after the initial kneejerk surge in response to the re-election of Donald Trump as President of the US. Many blue-chip S-REITs have already corrected and are trading at attractive yields of 6-7%. Maintain OVERWEIGHT. BUY data centre REITs DCREIT (Target: US$0.95) and MINT (Target: S$3.05). BUY retail REIT LREIT (Target: S$0.77). BUY logistics REIT FLT (Target: S$1.33).
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UOB KAYHIAN |
LIM & TAN |
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Frasers Logistics & Commercial Trust (FLT SP) Strength Of Logistics Portfolio And Balance Sheet Unshaken By Controversies
The selling of new units issued in lieu of management fees could be comfortably absorbed and is estimated to account for 9% of daily turnover if disposed over 10 days. Higher AOS for the state of Victoria is already largely reflected in FLT’s financial performance for FY24. FLT’s ability to grow via acquisition is supported by a low aggregate leverage of 33.0% and large debt headroom of S$801m. FLT provides FY25 yield of 7.3% for (MLT: 6.6%). Re-iterate BUY. Target price: S$1.33.
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The Business Times reported that gold is heading for its biggest gain in 14 years, with a 27% advance fuelled by US monetary easing, sustained geopolitical risks and a wave of purchases by central banks. While bullion has clocked lower since Donald Trump’s sweeping victory in November’s US presidential election, its gains over 2024 still outstrip most other commodities. Base metals have had a mixed year, while iron ore has tumbled and lithium’s woes have deepened. Given gold now sits above US$2,600/oz and that CNMC sells its gold at the spot rate, we believe the higher average realized gold spot rate can contribute significantly to their bottom line, assuming the gold volume extracted remains constant. With CNMC increasing their production capacity that will be funded internally and coming online by 1H25, CNMC should be able to maintain its earnings growth momentum assuming gold price remains stable. Maintain BUY on CNMC. |
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MAYBANK KIM ENG |
UOB KAYHIAN |
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Malaysia Banking A stable outlook
Still POSITIVE on the sector With expectations of stable economic growth momentum, steady bank margins and relatively benign credit costs, we project stable operating profit and net profit growth of 5.9% respectively in 2025E, for the banks in our coverage. ROAEs are projected to average 10.5% and dividend yields of >5% provide support. Our top 3 BUY picks are AMMB, CIMB and PBK.
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Healthcare – Malaysia Policy Overhang But Sector Offers Other Jewels
Maintain MARKET WEIGHT on the healthcare sector due to limited upside in the hospital segment, with forecasted earnings growth at 7.6% amid elevated valuations. Despite structural positives from IHH’s and KPJ's brownfield focus, these are balanced by policy overhang. Alpha IVF and Duopharma stand out as top picks, driven by Alpha IVF's regional expansion and Duopharma's expected cost-led recovery in 2025.
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