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UOB KAYHIAN |
UOB KAYHIAN |
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ComfortDelGro Corporation (CD SP) Starting 2025 With Multiple Headwinds.
CD announced that it has raised its taxi platform fees starting 2025 to offset rising manpower costs from the Platform Workers Act. Two new competitors have also entered the domestic ride-hailing market, further increasing competition. One of SBS Transit’s existing bus contracts has been put up for tender, implying potential nearterm earnings risks. Nonetheless, underpinned by strong earnings growth, we maintain BUY but with a lower target price of S$1.77.
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Kuala Lumpur Kepong (KLK MK) Expect A Sharp Recovery In Profitability For FY25
Coming off a subdued FY24 (Sep 24), we expect KLK to deliver much stronger results in FY25, driven by both its upstream and downstream operations with better plantation ASPs and production volume, in addition to a recovery in downstream profitability. The latter is driven by a progressive recovery in both its oleochemicals and refinery processing margins, with management seeing signs of further improvement in the upcoming quarters. Maintain HOLD. Target price: RM22.20.
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MAYBANK KIM ENG |
MAYBANK KIM ENG |
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Malaysia Consumer Incoming tailwinds
POSITIVE on heightened consumer spending Our optimistic view on the consumer sector in 2025 is premised on increased consumer spending momentum thanks to improved disposable income arising from govt supported measures. However, there are cost pressures arising from higher utilities and labour costs though we believe would be manageable. Consumer companies would be focused on building sales volumes to mitigate margin pressures in our view. Within the consumer subsegments, we believe F&B staples would be best positioned. Our three top picks are AEON, MRDIY and FFB.
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Thailand Healthcare Positive feedback from roadshow and Thai corporate day in KL/SG
Maintain POSITIVE sector view with PR9 as Top Pick During 6-8 Jan, we hosted Thai corporate days in KL/SG featuring BDMS and CHG, along with a roadshow in SG regarding healthcare outlook. Most investors agreed on our POSITIVE sector view. While FY25E poses challenges like co-pay and Middle East issues, some stocks now offer attractive valuations, while others, like PR9, maintain a robust outlook. Hence, Thai healthcare remains a BUY sector with solid fundamentals in the eyes of many foreign funds we met. PR9 remains our Top Pick. Among large caps, we prefer BDMS over BH, and for SSO players, CHG over BCH.
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LIM & TAN |
LIM & TAN |
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SATS ($3.62, down 4 cents) announced that Air India has awarded cargo and ground handling contracts to SATS Ltd (SATS) and its wholly-owned subsidiary Worldwide Flight Services (WFS) across multiple major airports in regions in Asia, Europe, the Middle East and North America SATS’s market cap stands at S$5.4bln and currently trades at 21x forward PE and 2.2x PB, with a dividend yield of 1%. Consensus target price stands at S$4.38, representing 20% upside from current share price. Despite SAT’s share price retracing 11.3% since the 52-week high, valuations remains lofty and we continue to maintain a HOLD recommendation on SATS. We think that the good news has likely been priced into the current market price given its steep valuations and after having done well over the past year, further re-rating towards consensus target price requires better than expected results and dividend deliveries going forward
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We highlight the key points from Nam Lee Pressed Metals’ ($0.345, down 0.015) FY2024 annual report which was just released: FY2024 marked a significant turnaround for the Group, achieving a profit after tax of S$12.2 million from the loss of S$1.0 million in FY2023. The notable recovery to profitability underscores our focus on financial prudence, operational efficiency and business development. Net assets per share of the Group recorded at 69.37 Singapore cents as of 30 September 2024. The Group’s cash position as at 30 September 2024 remained healthy backed by prudent cash management and controls. At Nam Lee’s last traded price of 34.5 cents, it is capitalized at $84mln and trades at a trailing PE of 6.9x and price to book of 0.5x, which seems low compared to its ROE of 7.3%. Excluding lease liabilities of $10mln, Nam Lee is around cash neutral with cash and interest bearing debts around the same level at $31mln. It’s final div of 1.5 cents and special div of 0.5 cents translates to a payout ratio of 40% and yield of just under 6%. There is no analyst coverage on the stock currently, but given its reasonable valuations and decent yield, bears putting it on our “Radar”. |
