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UOB KAYHIAN |
UOB KAYHIAN |
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Tech Manufacturers – Singapore Assessing The Potential Impact Of Trade Tariffs; Top BUYs: FRKN, UMS, VALUE
Most tech manufacturing stocks are likely to be impacted to a different degree by the recent US trade tariffs. As a result, we recommend stocks that will be the least impacted and could potentially still deliver earnings growth for 2025. Our top picks are Frencken (which has manufacturing bases locally and strong orders from ASML), UMS (which is ramping up for its new customer) and Valuetronics (which will see contribution from new customers and its new GPU leasing business). Downgrade to MARKET WEIGHT.
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Property – China Supportive Policy Remarks By Premier Li Qiang Point To Further Upside; Upcoming Politburo Meeting To Be An Important Policy Window
In Apr 25, major mainland cities saw mom/yoy decreases in new home sales, while second-hand transactions in Tier 1 cities continued to see positive yoy growth. The supportive remarks by Premier Li Qiang on 15 April point to further upside on property policies. The upcoming Politburo meeting will be an important window for clues of new policies. Maintain OVERWEIGHT. CR Land remains our top pick.
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CGS CIMB |
CGS CIMB |
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Wilmar International Growth in limbo
■ We estimate WIL’s 1Q25F net profit ranged US$360m-380m, higher qoq and yoy, supported by better soybean crushing and palm oil refining margins. ■ Despite expecting earnings growth in 2025F, we downgrade WIL to Hold, factoring in uncertainty from Indonesia. ■ This note makes the transfer of coverage to Jacquelyn Yow
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ISDN Holdings Ltd Economic impact from trade war a key risk
■ We hosted ISDN at our Value Up Conference in Singapore last Wednesday. ■ Management remains optimistic on the long-term prospects for its industrial automation business with Malaysia and Taiwan as growth opportunities. ■ The group will also continue its investment in mini-hydro power plants in Indonesia (another two plants currently under construction). ■ Management acknowledges the uncertainties from the US-China trade war. ■ We think ISDN’s valuation will mean-revert to price in trade uncertainties and de-rate to its average P/E of 8.8x. Downgrade to Reduce.
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| MAYBANK KIM ENG | |
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Malaysia Ports & Logistics Shocks amid tariff uncertainties
Global trade reels from swift US tariff actions Last week, the WTO downgraded its 2025 global trade growth forecast to -0.2%, citing escalating US-China trade tensions. The Trump administration’s steep tariffs on Chinese goods have led to a sharp 30%– 60% drop in China–US container bookings since tariffs take effect. While some Southeast Asian countries (Malaysia included) benefited from a short-term frontloading demand due to the 90-day suspension of reciprocal tariffs, the uplift has not been enough to offset the steep decline in Chinese containerised export volumes. We downgrade the sector to NEUTRAL from POSITIVE, as the deteriorating global trade outlook would likely weigh on performances of the companies under our coverage, though partially cushioned by domestic consumption demand. We have HOLD ratings on Westports (TP: MYR4.78) and Swift Haulage (TP: MYR0.41).
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