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UOB KAYHIAN |
UOB KAYHIAN |
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China Sunsine Chemical (CSSC SP) Holding Steady Amid Pricing Pressure
Sunsine’s volume outlook remains supported by China’s resilient auto market, with 1Q25 and Apr 25 vehicle sales up 11% yoy and 10% yoy respectively. While average ASPs have declined on lower feedstock prices, its market leadership and capacity provide scale advantage and pricing flexibility. We cut our 2025-27 earnings by 1-3% on ASP weakness, though volume growth remains intact. Sunsine is backed by a solid net cash position and 5.2% yield. Maintain BUY with a target price of S$0.63.
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Xiaomi Corp (1810 HK) 1Q25: Blended Margins At Historical High; IoT/EV Segments Driving Growth
Xiaomi’s 1Q25 net profit was a solid beat at Rmb10.7b, with an all-round beat for both revenue/margins across segments. The IoT business had an outstanding quarter, with a historically high margin of 25.2% (+4.4ppt vs estimates) thanks to an improved product mix. For the EV business, the continued increase in deliveries will help drive the segment towards profitability. Maintain BUY and raise target price to HK$69.90.
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CGS CIMB |
CGS CIMB |
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Meituan Increasing investment to defend market share
■ Meituan’s revenue reached Rmb86.6bn in 1Q25, up 18.1% yoy, in line. ■ Adjusted net profit was Rmb10.9bn in 1Q25, up 46.2% yoy, above our expectation, mainly due to better margin for the local commerce sector and efficient opex control. ■ We forecast 2Q25F revenue to grow 12.9% yoy, but adjusted net profit to decline 10.1% yoy due to an increase in subsidies for its on-demand delivery business. ■ Reiterate Add with a lower DCF-based TP of HK$166.
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Link REIT Resilient portfolio
■ Link REIT’s FY3/25 DPU increased by 4%, despite challenges in HK’s and China’s retail markets. ■ Although Link’s HK retail rental reversion was negative in FY3/25, we expect to see stabilisation in FY3/26F. ■ We estimate its borrowing cost could go lower to 3.3% in FY3/26F if the currently low HIBOR level sustains for several months. ■ Reiterate Add with a higher TP of HK$47.1 (5.82% FY3/26F DPU yield).
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| MAYBANK KIM ENG | LIM & TAN |
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Singapore REITs Meeting takeaways
Uncertain macro; lower rates, valuations supportive We summarise key discussion points from our recent NDRs and investor meetings. Uncertainty from tariffs, capital management initiatives and ongoing portfolio reconstitution were topics of interest. Investor positioning appears to be light, which suggests room for rotation given the descending SGD interest rates and an outlook of resilient economic growth. We maintain our positive sector stance on the back of falling rates and a reasonable sector valuation (6.4% yield, 0.9x PB). Preferred picks: CICT, CLAR, CLAS, FCT, MLT, MPACT, and PREIT.
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CapitaLand Ascendas REIT ($2.61, up 1 cent) called for a trading halt and announced the proposed acquisitions of 9 Tai Seng Drive, a Tier III colocation data centre in Singapore, and 5 Science Park Drive, a premium business space property in Singapore. The total purchase consideration for these acquisitions is approximately S$700.2 million. Capitaland Ascendas REIT’s market cap stands at S$11.5b, and currently trades at 17.2x forward PE and 1.2x PB, with a dividend yield of 5.9%. Consensus target price stands at S$3.12, representing 19.5% upside from current share price. We like CLAR’s latest DPU accretive foray into the tech space, which serves to further diversify it’s portfolio in terms of both country and asset class risk. In view of lower interest rates moving forward, we thus maintain an “Accumulate” rating on CLAR. |
