https://www.theedgesingapore.com/issues/stocks-watch/singapore-telecommunications-regional-ambitions-spill-beyond-telecom-sector
Having endured several years of earnings decline, Singapore Telecommunications (Singtel) might just find itself turning the corner. While the operational improvements are in tandem with the recovery from the pandemic, what makes the telco interesting will be its forays beyond its traditional sphere.
It has an impending digital bank joint venture with super app developer Grab Holdings in Singapore. Given the duo’s regional footprints, they are understandably keen on the rest of Asean.
On Jan 21, Singtel announced it was paying $48 million for a 16.3% stake in Indonesia’s Bank Fama International. Incidentally, other investors in Fama include none other than Grab.
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time of esg taggings 0.02641972992569208
https://www.theedgesingapore.com/news/telecommunications/singtels-australia-tower-network-and-australiansuper-jointly-acquire-axicom
AustralianSuper and Singtel’s Australian associate, Australia Tower Network (ATN), on April 1, announced that they will acquire Axicom for A$3.58 billion ($3.63 billion).
Axicom is one of Australia’s leading providers of telecommunications tower infrastructure. It owns and operates some 2,000 telecommunication sites located in metro and outer-metro locations across all eight states and territories and major cities in Australia.
ATN’s wholly-owned subsidiary had entered into a securities sale agreement to acquire the stapled structure comprising Axicom HoldCo Pty Ltd, Axicom Asset HoldCo Pty Ltd and Axicom Hold Trust.
Singtel will, through a wholly-owned subsidiary, fund part of the Axicom acquisition for A$212 million. The sum will be paid via a combination of the subscription for new ATN shares and unsecured shareholder loans.
As ATN’s shareholders, AustralianSuper and Singtel said the “strong synergies between Axicom and ATN would provide exceptional growth opportunities which will benefit customers, employees, and the community in the long term”.
Nik Kemp, AustralianSuper’s head of infrastructure, said that Axicom is a high-quality asset that will deliver long-term value to AustralianSuper members.
“Axicom is complementary to our existing digital infrastructure portfolio and this acquisition will result in the creation of a provider with a truly national footprint that will connect the vast majority of Australian families and businesses,” he adds.
“Axicom has all of the characteristics we are looking for in an infrastructure asset and there are strong synergies between the two organisations. We look forward to working with the great teams of both ATN and Axicom to bring these two strong businesses together and leverage the great opportunity we have to continue to deliver for customers and AustralianSuper members,” Kemp continues.
Lim Cheng Cheng, Singtel group’s chief corporate officer called the acquisition a “unique opportunity to scale up ATN’s operations and expand its customer base”.
“It also reinforces Singtel’s commitment as a long-term investor in the Australian telecoms space where our goal has always been to provide more options and build better communications for Australian consumers and businesses. In combining ATN and Axicom, AustralianSuper and Singtel will be working closely to realise the significant operational synergies created,” Lim adds.
AustralianSuper had previously acquired a 70% stake in Singtel in November 2021. Following the acquisition of Axicom, Singtel’s effective interest in ATN will be diluted to 18% from 30% previously.
ATN will continue to be equity accounted for as an associate.
Kemp said AustralianSuper will continue to seek further opportunities in this sector both domestically and globally. “AustralianSuper is looking to double its infrastructure portfolio over the next five years from its current A$31 billion. We believe that there will be significant growth in demand for digital infrastructure and will actively consider future opportunities in this space.”
ATN CEO Cameron Evans, said ATN was looking forward to broadening the relationship with Axicom’s customers and providing them with access to the over 2000 current ATN sites and more than 565 new sites under construction.
“Bringing together Australia’s two largest independent wireless telecommunications infrastructure operators provides real strategic advantages and strong value creation opportunities. It will also provide greater support for our customers as they continue to deliver essential services to the community such as mobile coverage, internet services, broadcast and emergency services,” he adds.
“We look forward to working with the team at Axicom to bring our two businesses together and leverage the opportunities we have with our top-quality digital infrastructure to connect Australians for generations to come,” he continues.
Shares in Singtel closed 2 cents lower or 0.75% down at $2.64 on March 31.
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time of esg taggings 0.036635139025747776
https://www.theedgesingapore.com/issues/telecommunications/singtels-ncs-expands-presence-australia-acquisition
Singapore Telecommunications’ (Singtel) technology services arm NCS has made yet another acquisition in Australia.
The acquisition of digital services firm ARQ Group for A$290 million ($295.4 million) came just over a fortnight after NCS announced the acquisition of The Dialog Group, Australia’s largest privately-owned IT services company, for A$325 million.
Before this, NCS had acquired cloud consultancy Riley that specialises in Google cloud applications and has also taken a majority investment in cloud transformation specialist Eighty20 Solutions.
article_here
time of esg taggings 0.02916170097887516
https://www.theedgesingapore.com/news/ma/singtels-ncs-moves-forward-a290-million-acquisition-arq-australia
NCS announced its acquisition of digital services firm ARQ Group (ARQ) in Australia for A$290 million ($297 million). This move brings to scale NCS NEXT in Australia, which now offers a compelling end-to-end digital transformation value proposition for clients.
ARQ’s revenue is projected to reach A$118 million by end 2022 representing a y-o-y increase of 38%, while EBITDA is projected to increase to A$18.4 million. The acquisition price represents an EV/EBITDA multiple of 15.7x, reflecting NCS’ confidence in the prospects of ARQ and expected synergies with the rest of its operations.
NCS believes that this move is timely and will accelerate its digital sector growth in Australia. This move comes at a crucial point to consolidate IT and digital resources at a regional level across Singapore and Australia for a strong partnership ecosystem, to more successfully support enterprises’ growing demand for digital transformation solutions.
Research by the IDC Worldwide Black Book has shown that digital services in APAC are expected to grow at a compound annual growth rate (CAGR) of 14.6% from 2020 to 2025, reaching US$170.6 billion in 2025. In Australia, digital services stand to grow at a CAGR of 8.7% from 2020 to 2025 to US$12.1 billion in 2025.
This is NCS’ fourth investment in Australia over the past 15 months. NCS recently acquired Australia’s largest privately-owned IT services company, The Dialog Group (Dialog) following two previous investments: firstly, cloud consultancy Riley that specialises in Google cloud applications and secondly, a majority investment in cloud transformation specialist Eighty20 Solutions.
ARQ’s client coverage serves half of the top 20 companies on the Australian Exchange (ASX) across diverse sectors in financial services, utilities, retail, healthcare, travel and government, including NZ bank, AustralianSuper, Domino’s, Qantas, Transurban and more.
With the acquisition, ARQ’s 560-strong team will increase NCS’ headcount in Australia to 1,900, in a bid to build up a robust tech talent pipeline moving forward.
According to NCS, the foci of strong digital talent for both companies are aligned with each other, where NCS’ prioritisation of apprenticeship-based learning culture and ARQ Academy’s emphasis on self-learning and innovation provide a combination to better address the tech talent crunch in both Australia and Singapore.
Following the receipt of regulatory approvals required, the acquisition is expected to be completed by May 2022.
“This latest acquisition completes a jigsaw of strategic investments in Australia, ramping up our presence in a market that is critical to our regional expansion,” says Ng Kuo Pin, CEO of NCS.
“Combined with Dialog’s core IT capabilities and extensive reach across eight Australian cities, ARQ brings on board the right digital competencies that help create a highly compelling end-to-end digital transformation value proposition,” he adds.
As at 2.59pm, shares in Singtel are trading at 2 cents down or 0.75% lower at $2.63.
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time of esg taggings 0.08675945899449289
https://www.theedgesingapore.com/capital/corporate-moves/singtel-monetises-16-stake-airtel-africa-raises-150-mil
Singapore Telecommunications (Singtel) announced that it's wholly-owned subsidiary Singapore Telecom International has monetised a 1.6% stake in Airtel Africa through a market placement, as part of its capital recycling strategy. It raised net proceeds of approximately $150 million from the placement which was well oversubscribed.
Arthur Lang, Singtel's group CFO says, "We are pleased with the strong interest in the placement. This monetisation underscores our approach to actively pursue asset recycling opportunities and crystallise value from our assets to fund our new growth engines. It will also enhance the liquidity of Airtel Africa shares in the market and allow for more broad-based institutional investor participation.”
“We remain positive and committed to Africa in the long run. Airtel Africa serves a young demographic in a fast-growing market and is well positioned to benefit from rapid smartphone and mobile money adoption with the rise of the continent’s digital economy,” he adds.
Airtel Africa, Africa’s second largest telecom operator, with a combined mobile customer base of more than 125 million across 14 countries, offers an integrated suite of telecommunications solutions, including mobile voice, data and mobile money services.
The realised gain on divestment of approximately $34 million will be recorded in the group's retained earnings in the balance sheet. Following this transaction, Singtel will continue to hold a 21.7% effective stake in Airtel Africa, comprising a 17.8% indirect stake through its regional associate Airtel and a 3.9% direct stake.
Shares in Singtel closed 1.15% higher on Mar 25 at $2.65.
Photo: Bloomberg
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time of esg taggings 0.026127053890377283
https://www.theedgesingapore.com/news/brokers-calls/cdg-cli-cict-sgx-singtel-and-wilmar-among-maybanks-barbell-approach-amid-market
As the Russia-Ukraine conflict drags on, Maybank Securities analyst Thilan Wickramasinghe sees risks of the prolonged conflict dragging Europe into a recession.
As Singapore’s GDP has a sizeable 7.7% exposed to the European Union, a slowdown on the continent could have negative impact on revenues, costs and returns for Singapore’s corporates, says the analyst.
The rising risks of Europe seeing a recession given its high dependence on Russian energy supplies could have a domino effect on Singapore’s economy and corporates in terms of downsides to sales, he reiterates.
“Our screening shows selective stocks in sectors such as banks, property, industrial and hospitality REITs, transport and tech have material European revenue sources,” he writes in his March 14 report.
Europe has become a core market for REITs such as Ascott Residence Trust (ART), CDL Hospitality REIT (CDLHT), Ascendas REIT (A-REIT), Keppel DC REIT (KDC REIT) and Frasers Logistics and Commercial Trust (FLCT) due to their expansion overseas.
Property developers such as City Developments Limited (CDL), CapitaLand Investment (CLI) and UOL have around 5% to 15% of fixed assets in Europe, while transportation names including Singapore Airlines (SIA) and ComfortDelGro (CDG) have a “sizeable EU exposure,” notes Wickramasinghe.
In the tech sector, Frencken has the highest share of revenues from Europe at 41% while AEM and Aztech have “notable shares”.
“Separately, the banks have 14%-18% of loan books classified as ‘rest of the world’. This largely comprises of developed economies, where we believe Europe is a sizable contributor from a wealth management, corporate finance, and trade finance perspective,” adds the analyst.
At the same time, Singapore’s mid-caps have a larger exposure to Europe at 25% of their market cap, compared to 20% for large caps and 14% for small and microcaps, he points out.
Singapore’s mid-caps are classified as companies with market caps of within $1 billion to $5 billion.
On the ongoing uncertainties in the market, Wickramasinghe has recommended a barbell portfolio approach that balances “defensiveness with structural growth”.
“The geopolitical uncertainty from the Russia-Ukraine conflict, China’s policy on common prosperity, plus economic uncertainty from a European slowdown increases the need for earnings certainty and competitive motes: CapitaLand Integrated Commercial Trust (CICT), Bumitama Agri (BAL), Singapore Exchange (SGX), Singapore Telecommunications (Singtel) and Wilmar International,” says the analyst.
“Concurrently, accelerating Covid reopening and exposure towards long term themes such as environmental, social and governance (ESG) principles, digitalization and emerging markets (EM) consumption should support structural growth,” he adds, putting forward recommendations such as CDG, CLI, DBS Group Holdings, Frencken and United Overseas Bank (UOB).
Photo: Bloomberg
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https://www.theedgesingapore.com/capital/brokers-calls/singtel-remains-safe-haven-buy-throughout-5g-rollout-maybank
Singtel is gaining traction in deploying 5G and remains a safe haven with attractive potential, says Maybank Securities Research analyst Kelvin Tan.
“Amid tough and volatile times, we contend that Singtel remains a safe haven with attractive upside potential and a 5% dividend yield,” says Tan.
In a March 16 note, Tan is maintaining “buy” on Singtel with an unchanged target price of $2.98.
Tan expects an increasingly competitive landscape as incumbents focus on monetising 5G services and increasing capex for 5G implementation. “Despite setbacks, sales of Singtel’s 5G-equipped phones are as strong as pre-pandemic levels. Regionally, Telkomsel and Airtel have launched commercial 5G services and this should further spark the development of new 5G applications for consumers and enterprises in emerging markets.”
With more than 1,000 5G standalone (SA) sites across Singapore, Singtel is poised to meet IMDA’s target of 50% population coverage by end-2022, says Tan.
Increasing 5G adoption via bundled packages has led to an uplift in average revenue per user (ARPU) 0.3% y-o-y and helped address dilution from 4G SIM-only plans. In Singapore’s recent budget $200 million was earmarked to build digital capabilities for business in coming years.
“We believe Singtel is well-placed to capitalise on this through its lucrative enterprise business by offering assistance in the development of solutions for a wide range of uses. This initiative, however, will take time to bear fruit,” says Tan.
Singtel faces strong competition in Australia. Telstra’s recent partnership with TPG Telecom to increase 5G sites in Australia could potentially reduce the cost of network ownership by up to 30%.
Telstra is Australia's largest telecommunications company by market share.
In fact, capex for Singtel’s 5G network has been increasing (+10% y-o-y) since it gained the 3.5GHz spectrum in mid-2020. “Moving forward, we expect a greater capex burden for Singtel thus reducing free cash flow visibility,” says Tan.
“We predict constant distribution per unit (DPU) at 40-50% of net profit from FY2022 to FY2025. Optus has allowed Telstra to regain dominance in the Australia Telco space and would need a game-changer in this competitive market,” he adds.
Research by Cisco predicts Singtel’s annual 5G revenue could rise to $710 million (12% of current annual enterprise revenue) by 2025. “We anticipate key strategic plans for Singtel will include accelerating Internet of Things connection via strategic partnerships, leveraging its infrastructure assets to unlock value and drive secular growth by allowing enterprises and startups to incorporate distinctive use cases in their Multi-access Edge Computing (MEC) structures,” writes Tan.
As at 2.15pm, shares in Singtel are trading flat at $2.55.
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time of esg taggings 0.03203484206460416
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-expects-singapores-telco-sector-see-15-higher-earnings-fy2022
UOB Kay Hian analysts Chong Lee Len and Chloe Tan have maintained their “market weight” recommendation on the Singapore telco sector as its earnings for the FY2021 and, or 9MFY2022 came within their expectations.
The sector is currently trading at 12.6x EV/EBITDA, 1 standard deviation below its five-year mean EV/EBITDA.
During the period, the sector saw collective earnings growth of 11% y-o-y due to stronger post-paid revenue. The earnings improvement was also attributable to the strong associate contribution from Singapore Telecommunications (Singtel), as well as enterprise growth at Starhub and good cost discipline, write the analysts.
As such, Chong and Tan now expect the sector’s earnings for FY2022 to grow 15% y-o-y to a net profit of $2.25 billion amid high single-digit service revenue growth and Singtel’s associate recovery.
“Stepping into 2022, Singtel remains encouraged by the post-paid trajectory seen in Singapore and Optus while being cautiously optimistic about its associate investments in India, Indonesia and Thailand,” write the analysts in their March 9 report.
“Starhub guided for a robust 10% y-o-y service revenue growth but EBITDA will be adversely impacted by inflationary pressure (higher utility) and upfront investment for IT transformation. Starhub expects margin to recover from 2023 onwards (to at least 23% from 20%),” they add. “Similarly, Netlink expects operational inflationary pressure to materialise in 2022, including higher interest rates in the rising rate environment.”
To the analysts, the sector’s earnings recovery is now more visible, given the “benign competitive landscape” and nationwide 5G rollout, which helps the incumbents maintain their market share.
“Pronounced earnings uplift from the enterprise business may take a longer time to bear fruit as telcos continue to explore new business applications for 5G,” add the analysts.
While Chong and Tan like Singtel and Netlink for their defensiveness, as well as Netlink’s 5% dividend yield, Singtel remains their sector top pick.
The way they see it, Singtel is a proxy to Southeast Asia’s economic reopening. The monetisation of assets to narrow the valuation gap, including setting up a regional data centre and potentially, a regional digital banking outfit in Southeast Asia is also another plus point for the telco.
Chong and Tan have rated Singtel “buy” with a target price of $2.90.
“At our target price, the stock will trade at 14.5x FY2023 EV/EBITDA (slightly above its five-year mean EV/EBITDA). The stock currently trades at -1 standard deviation below its five-year mean EV/EBITDA of 13x,” write the analysts, who deem Singtel being on track to deliver growth for shareholders via its strategic reset.
“[Singtel’s] focus will include: capitalising the digital/IT growth trend via strategic partnerships, leveraging its infrastructure assets (data centres, towers and fibre) to unlock value, sweating its key assets, and investing in 5G for network superiority and future monetisation,” they add. “This is expected to help Singtel bridge the current market valuation gap as a conglomerate.”
Meanwhile, they have given Netlink a “hold” recommendation with a target price of $1.05.
On Netlink, the analysts say they “continue to see the stock as a good shelter amid market volatility given its strong earnings visibility, healthy balance sheet and cautious approach in terms of overseas/domestic acquisitions”.
Key catalysts to Netlink’s share price include growth in demand for non-building address points (NBAP) connections with the rollout of 5G/Smart Nation initiatives, investors seeking defensive yield from Netlink’s resilient, predictable, transparent and regulated cash flow, as well as earnings-accretive mergers and acquisitions (M&As).
At the same time, the analysts have recommended investors look out for key events such as its regulatory review for 2023, expected to be announced by 4QFY2022.
Within the same report, the analysts have given StarHub a “hold” recommendation with a target price of $1.30.
As at 12.23pm, shares in Singtel, Netlink and StarHub are trading at $2.51, 96.5 cents and $1.24 respectively.
Photo: Stock image
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time of esg taggings 0.03682767297141254
https://www.theedgesingapore.com/capital/brokers-calls/singtels-latest-buy-keeping-it-buy
Analysts are upbeat on Singapore Telecommunication’s (Singtel) prospects following its announcement on Mar 7 that its enterprise arm NCS is acquiring a 100% stake in Australia’s largest privately-owned IT services consulting company, The Dialog Group, for A$325 million ($325 million).
See: Singtel's NCS acquires The Dialog Group in Australia for $325 mil
This move will allow the group to expand its footprint in its Australian ICT space, which has previously been identified as a target market and is seeing an acceleration in revenue momentum.
Citi Investment Research analyst Arthur Pineda says, “We see the move as near-term profit neutral with Dialog already profitable according to Singtel, serving to counter the additional financing costs related to the acquisition.”
The way Pineda sees it, Dialog will allow NCS to more quickly scale up in Australia with over 1000 IT specialists already on board. In addition to the talent pool, Dialog also brings in enlarged public (various local governments and federal government agencies) and private sector clients.
Momentum is likely behind it as based on Gartner estimates, IT spending in Australia is projected to grow to a decade-high 6.5% in 2022. “Singtel and NCS’ enlarged capabilities and expanded relationships following its acquisition should put the company in a position to grow even faster,” says Pineda.
Furthermore, unlike the group’s prior acquisitions of Amobee or Trustwave which fragged the group’s profitability levels, Dialog is already a profitable entity, generating some A$176 million in revenue and A$12 in profits in its last fiscal year ended June 2021.
‘As such, we see that from an earnings standpoint, the move will not dilute group profitability with the added interest burden offset by Dialog’s own profits. The acquisition can potentially move from neutral to accretive if/when NCS’ Australia business can be scaled up although we think the street will likely require proof of execution before assigning any such benefit,” says the analyst, who also expects minimal impact on gearing.
While Citi has kept its “buy call” with a target price of $3.44, RHB Group Research is also positive on the stock, as it maintains its “buy” recommendation with a target price of $3.37. Singtel is also RHB’s preferred Singapore telco pick on an earnings recovery thesis.
The RHB research team says, “We view Singtel’s latest enterprise M&A in Australia positively to strengthen its Asia Pacific B2B digital ambitions and capture new growth opportunities. The deal forms part of the group’s strategic business reset, and rides on the coattails of value-accretive corporate actions executed over the past six months.”
Dialog will grant immediate access to a pool of long-serving and lucrative Tier-1 enterprise customers, and unlock significant revenue and cost synergies via the pooling of resources (talent and headcount) across jurisdictions. NCS’s IT headcount in Australia will also triple to about 1,300.
More importantly, the transaction should be a good strategic fit, with NCS and Dialog combining their core strengths to deliver advanced digital services and solutions.
As at 3.15pm, shares in Singtel are trading at $2.51 or 1.5 time FY2022 book with a dividend yield of 3.7%.
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time of esg taggings 0.03134126984514296
https://www.theedgesingapore.com/capital/ma/singtels-ncs-acquires-dialog-group-australia-325-mil
NCS, a wholly-owned subsidiary of Singapore Telecommunications (Singtel), announced that it is acquiring Australia’s largest privately-owned IT services company, The Dialog Group, for a consideration of A$325 million ($325 million).
In a Mar 7 announcement, NCS says that this acquisition can help it better support the Australian public sector and enterprise clients in addressing their rising digital transformation needs. It is geared to unlock new growth opportunities in the Australian market and accelerate NCS’ regionalisation strategy.
Reputed for its extensive services portfolio from IT consulting, application development to managed application services, Dialog has presence across Brisbane, Sydney, Melbourne, Canberra, Perth, Darwin, and Adelaide.
The acquisition combines Dialog’s core IT capabilities and NCS NEXT digital services to bolster its focus on innovation, cloud, artificial intelligence and data analytics. It also trebles the number of highly skilled IT specialists in its operations in Australia to 1,300.
As part of its transformational growth plan, NCS has been scaling its presence in Australia since December 2020 to serve clients in Australia through NCS NEXT, its digital innovation and services arm – which supports enterprises’ growing demand for digital transformation solutions. Together, Dialog and NCS expect to see greater opportunities for synergistic growth between Australia and Singapore as well as expertise to better support the needs of clients across both markets.
This latest deal follows NCS NEXT’s acquisition of two fast-growing technology companies last year: Riley, a cloud consultancy with dedicated expertise in Google cloud applications and Eighty20 Solutions, a cloud transformation specialist with unique capabilities across Microsoft cloud platforms, thus offering a ‘best-of-cloud' service portfolio to the Australian market.
This acquisition will be funded via internal cash resources.
Ng Kuo Pin, CEO of NCS says, “This acquisition is a significant step in the regionalisation of NCS and leverages the combined strengths of NCS and Dialog and their established track records and reputations across both Singapore and Australia. The scale of this acquisition, our largest to date, reflects our firm commitment to growing our business beyond the shores of Singapore, particularly in Australia where we can also leverage the strategic presence of the Singtel Group.”
As at 3.00pm, shares in Singtel are trading 1.2% higher for the day at $2.54.
article_here
time of esg taggings 0.03285530908033252
https://www.theedgesingapore.com/news/telecommunications/singtels-bharti-airtel-buy-47-stake-indus-towers-value-accretive-deal
Singapore Telecommunications (Singtel) subsidiary Bharti Airtel has, on Feb 25, entered into an agreement with Vodafone to acquire a 4.7% stake in Indus Towers.
According to the Indian telco, the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea Limited and simultaneously remitted to Indus Towers to clear Vodafone Idea’s outstanding dues.
The acquisition is said to be at an “attractive price representing a significant discount typically available for such large block transactions”. The price was not included in the filing on the Singapore Exchange (SGX) on Feb 25.
article_here
time of esg taggings 0.025469812098890543
https://www.theedgesingapore.com/news/telecommunications/singtel-redevelop-comcentre-hq-next-gen-office-development-over-2-bil
Singapore Telecommunications (Singtel) has announced its plans to appoint a developer to jointly redevelop its Comcentre headquarters along the Orchard Road belt.
The redevelopment will maximise the Comcentre’s site potential and increase building efficiency with a view to unlocking value from the property, says the telco in its Feb 23 statement.
The total cost of development, including land costs, is estimated to be in excess of $2 billion.
article_here
time of esg taggings 0.048606371972709894
https://www.theedgesingapore.com/news/disruption-and-digitalisation/singtel-launches-industrys-first-all-one-platform-5g-and-edge
Singapore Telecommunications (Singtel), on Feb 22, has launched Paragon, the first all-in-one platform for 5G and edge computing within the industry.
The platform will enable enterprises to tap into Singtel’s 5G network to activate network slices on demand. It will also deploy mission critical applications on Singtel MEC (multi-access edge compute) as well as access a robust eco-system of partner applications, offering them unparalleled control and choices.
Paragon, which is developed in-house, also significantly reduces the complexity and time needed to adopt 5G MEC and low latency applications and services. According to Singtel, this will lower the barriers to entry for enterprises, enabling faster deployment of use cases while removing considerable operational and cost overheads.
article_here
time of esg taggings 0.025807583006098866
https://www.theedgesingapore.com/capital/brokers-calls/singtel-still-set-recovery-despite-3qfy2022-earnings-miss-analysts
Analysts have all kept their positive recommendations on Singapore Telecommunications (Singtel) despite the telco’s earnings for the 3QFY2022 missed expectations, or stood broadly in line with their full-year estimates.
CGS-CIMB Research analysts Foong Choong Chen and Sherman Lam have kept “add” on Singtel even though Singtel’s 3QFY2022 net profit missed expectations due to associate earnings.
The analysts have, however, given Singtel a higher target price of $3.30 from $2.90, which was due to higher fair values for associates, led by Bharti.
article_here
time of esg taggings 0.025086286943405867
https://www.theedgesingapore.com/capital/results/singtel-sees-238-higher-net-profit-734-mil-3qfy2021
Singapore Telecommunications (Singtel) has reported a 23.8% growth y-o-y in its net profit of $734 million for the 3QFY2021 ended December, lifted by net exceptional gains from the disposal of the group’s 70% equity stake in Australia Tower Network.
See: Earnings recovery expected from Singtel in 3QFY2022
Underlying net profit, however, dipped 0.9% y-o-y to $473 million due to lower operating revenue and EBITDA.
article_here
time of esg taggings 0.02499331790022552
https://www.theedgesingapore.com/news/tech/former-sia-dbs-and-singtel-chair-koh-boon-hwees-vc-firm-raises-us130-mil-tech-fund
The venture capital firm co-founded by former Singapore Airlines Ltd. Chairman Koh Boon Hwee closed its first fund at US$130 million ($174.54 million) to back startups in Southeast Asia’s fast-growing technology industry. The firm, Altara Ventures, drew in investors including Singaporean and South Korean sovereign wealth funds, Razer Inc., and a Europe-based fund of funds, Dave Ng, one of the firm’s five general partners, said in a phone interview. It exceeded its initial target of $100 million, he said. Koh, 71, also the former chairman of DBS Group Holdings and Singapore Telecommunications, founded Altara in 2020 with four fellow investors to tap Southeast Asia’s tech boom. About 70% of the fund has been earmarked for the region, with the firm focusing on areas including fintech, consumer internet, health care, logistics, enterprise software and education.
“We saw many consumer-focused fintech and logistics startups chart the way during the first decade,” Ng said. “As the region matures, we’re also looking to help build the next wave of tech companies.”
Ng and fellow partner Gavin Teo previously worked at B Capital, Facebook Inc. co-founder Eduardo Saverin’s venture capital house. The other three partners are Koh, Tan Chow Boon and Seow Kiat Wang, who founded Omni Industries, an electronics components maker acquired by Celestica Inc. in 2001.
article_here
time of esg taggings 0.02956899907439947
https://www.theedgesingapore.com/capital/brokers-calls/earnings-recovery-expected-singtel-3qfy2022
CGS-CIMB Research is keeping its “add” recommendation on local telco giant Singapore Telecommunications (Singtel) with a target price of $2.90. Analysts Foong Choong Chen and Sherman Lam believe that Singtel’s upcoming 3QFY2022 may see a rise in net profit, led by higher earnings from associated and the Singapore consumer segment.
The analysts estimate a 26-28% y-o-y increase in core net profit to $540-550 million for the third quarter, which results are expected to be announced on Feb 15. Furthermore, the core net profit for this period will also include an approximately $400 million net gain from the sale of its 70% stake in Australia Tower Network, which transaction was completed in November 2021.
“We think 3QFY2022 Singapore consumer EBIT jumped 28-35% y-o-y (up 20-27% q-o-q), despite lower Job Support Scheme (JSS) credits, driven by increased uptake of higher average revenue per user (ARPU) 5G plans, some recovery in roaming and higher device sales,” says Foong and Low in a Feb 9 report.
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time of esg taggings 0.03219838417135179
https://www.theedgesingapore.com/news/telecommunications/singtel-signs-joint-development-agreement-gulf-energy-and-ais-develop-and
Singapore Telecommunications (Singtel) has executed a joint development agreement (JDA) with Gulf Energy Development Public Company Limited (Gulf Energy) and Advanced Info Services Public Company Limited (AIS) to jointly develop and operate data centres in Thailand on Feb 3.
Gulf Energy is Thailand’s largest private power producer, while AIS is one of Thailand’s leading telcos. AIS is also a regional associate of Singtel.
The JDA follows a memorandum of understanding (MOU) signed by Singtel and Gulf Energy on Sept 30, 2021.
article_here
time of esg taggings 0.026650107000023127
https://www.theedgesingapore.com/issues/stocks-watch/singapore-telecommunications-regional-ambitions-spill-beyond-telecom-sector
Having endured several years of earnings decline, Singapore Telecommunications (Singtel) might just find itself turning the corner. While the operational improvements are in tandem with the recovery from the pandemic, what makes the telco interesting will be its forays beyond its traditional sphere.
It has an impending digital bank joint venture with super app developer Grab Holdings in Singapore. Given the duo’s regional footprints, they are understandably keen on the rest of Asean.
On Jan 21, Singtel announced it was paying $48 million for a 16.3% stake in Indonesia’s Bank Fama International. Incidentally, other investors in Fama include none other than Grab.
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time of esg taggings 0.027593667153269053
https://www.theedgesingapore.com/news/telecommunications/singtel-acquires-1626-stake-indonesian-bank-48-mil-pursue-banking
Singapore Telecommunications Limited (Singtel) announced, on Jan 21, that it has acquired a 16.26% stake in Indonesian bank, PT Bank Farma International for a cash consideration of 500 billion rupiah ($48.0 million).
The acquisition was made by the telco’s wholly-owned subsidiary Singtel Alpha Investments, where 2.4 billion new shares were acquired in the bank.
The cash consideration was determined through a privately negotiated process and was funded via internal sources.
article_here
time of esg taggings 0.04057777882553637
https://www.theedgesingapore.com/capital/brokers-calls/grab-good-position-be-included-key-market-indices-disruption-inclusion-minimal
Citi Research analyst Arthur Pineda says Grab Holdings’ recent listing allows it potential to be included in key market indices. The tech group’s listing places it amongst the top 10 largest Singapore-headquartered stocks based on market capitalisation, at US$23 billion ($31.03 billion) as at the time of writing on Jan 18.
“This places the company in good footing to be included in key market indices such as MSCI Singapore which in turn raises potential concern on asset re-allocations. Weightings into Grab will need to be funded by a reduction in weightings for other legacy index names,” writes Pineda.
That said, the inclusion of Grab into such indices will likely see a minimal disruption for the existing large caps that’re already in the index, unlike the inclusion of Sea Limited in September 2021.
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https://www.theedgesingapore.com/news/telecommunications/singtel-considering-options-australia-optus-fibre-assets-according-sources
Singapore Telecommunications Ltd. is considering options including a potential stake sale in the fiber assets of its Australian subsidiary SingTel Optus Pty, people familiar with the matter said, a deal that would follow last year’s disposal of its mobile phone towers unit.
Singtel, as the Singaporean phone-services provider is known, has held talks with potential advisers to prepare for a strategic review of the Australian fiber business, the people said, asking not to be identified because the information is private.
Options for the assets, which could be worth a few billion dollars, include a potential stake sale, partnership with an investor or a sale and lease back, the people said. Deliberations are preliminary and there’s no certainty that the review will lead to a transaction, the people said.
article_here
time of esg taggings 0.026677540969103575
https://www.theedgesingapore.com/news/telecommunications/singtel-subsidiary-bharti-airtel-scraps-plans-merge-digital-assets-listed
Bharti Airtel, the subsidiary of Singapore Telecommunications (Singtel), has announced on Jan 4 that it will withdraw the scheme of arrangement for a new corporate structure it had announced in April last year.
This follows the telecom sector reforms package announced by the Indian government in September, which Bharti says has “significantly boosted the outlook and investor confidence for the industry while simplifying the license framework”.
“With a strong balance sheet and 5G ready network, Bharti Airtel is well positioned to invest aggressively in the emerging growth opportunities offered by India’s digital economy. The board of directors of Bhart Airtel is of the view that the existing corporate structure of the company is, therefore, optimal for leveraging these emerging opportunities and unlocking value while continuing to scale up Airtel’s digital businesses,” the company’s statement reads.
article_here
time of esg taggings 0.03726961696520448
https://www.theedgesingapore.com/news/insider-moves/george-yeo-buys-more-creative-technology-shares
George Yeo, a newly-appointed independent director of Creative Technology, has bought additional shares.
On Feb 17, Yeo, a former cabinet minister, paid $19,920 for 8,300 shares, or $2.40 each. On Feb 15, he bought 1,200 shares at $2,820, or $2.35 each.
Yeo first bought Creative shares on Feb 11, when he paid an average of $2.35 for 50,000 shares.
article_here
time of esg taggings 0.026292560156434774
https://www.theedgesingapore.com/capital/insider-moves/creatives-new-director-george-yeo-buys-shares-singapore-shipping-and-hour
George Yeo, the former cabinet minister who joined the board of computer accessories manufacturer Creative Technology on Nov 15, 2021, acquired 50,000 shares of the company on the open market for $117,500 or $2.35 each on Feb 11.
Before the filing on Feb 14, Yeo did not hold any Creative shares.
“Creative will benefit from his perspectives and insights as we move forward to meet the challenges in these difficult and uncertain times,” says Sim Wong Hoo, Creative’s chairman and CEO, referring to Yeo’s appointment.
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time of esg taggings 0.02459821291267872
https://www.theedgesingapore.com/capital/insider-moves/newly-appointed-creative-technology-director-george-yeo-buys-50000-shares
George Yeo, the former cabinet minister who recently joined the board of audio products maker Creative Technology, has bought 50,000 shares of the company on Feb 11. He paid $117,500, or $2.35 each. Prior to the filing on Feb 14, Yeo didn’t hold any Creative shares.
Yeo was appointed to the company’s board on Nov 15 2021 as an independent director.
On Feb 10, the company announced that revenue for 1HFY2022 ended Dec 31 2021 hit US$34.2 million, down 28% y-o-y.
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time of esg taggings 0.02454112097620964
https://www.theedgesingapore.com/capital/results/creative-technology-sees-earnings-surge-275-times-us12-mil-due-gain-disposal-its-us
Creative Technology has reported earnings of US$1.2 million ($1.7 million) for the 1HFY2022 ended December, 27.5 times higher than earnings of US$45,000 in the same period the year before.
Earnings per share (EPS) came in at 2 US cents.
The surge in earnings is mainly due to the US$9.7 million netted in other gains, compared to the US$2.8 million in the 1HFY2021. The higher figure was attributable to the US$10.0 million gain on disposal of a US property by a wholly-owned subsidiary and offset by a foreign exchange loss of US$0.3 million.
article_here
time of esg taggings 0.028214488178491592
https://www.theedgesingapore.com/news/banking-finance/uob-issue-us21-bil-worth-notes-under-us30-bil-global-medium-term-note-programme
UOB has announced its intent to issue US$2.1 billion ($2.85 billion) worth of notes to be drawn down under the US$30 billion global medium term note programme.
All the notes are denominated in US dollars.
Of the notes, US$750 million ($1.02 billion) are senior notes due 2025 with a coupon of 3.059% per annum (p.a.). The notes will mature on April 7, 2025 and are expected to be rated Aa1 by Moody’s and AA- from S&P Global Ratings and Fitch Ratings.
The amount also comprises US$350 million worth of senior floating rate notes due 2025 and US$1 billion subordinated notes due 2032 with a coupon of 3.863% p.a.
The senior floating rate notes will mature on April 7, 2025, while the subordinated notes will mature on Oct 7, 2032. The senior floating rate notes are expected to be rated Aa1 by Moody’s and AA- from S&P Global Ratings and Fitch Ratings.
The subordinated notes are expected to be rated A2 by Moody’s, BBB+ by S&P Global Ratings and A by Fitch Ratings.
Shares in UOB closed at $31.96 on April 1.
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time of esg taggings 0.046941595850512385
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-maintains-buy-wilmar-amid-central-kitchen-business-expansion
UOB Kay Hian Research analysts Leow Huey Chuen and Jacquelyn Yow Hui Li have kept their “buy” call on Wilmar International as the company continues its expansion into the central kitchen business.
In their March 31 note, the analysts point out that Wilmar and its Chinese subsidiary Yihai Kerry Arawana's (YKA) construction of the Central Kitchen Food Park (CKFP) in China has been expedited.
The first CKFP facility in Hanzhou has been completed and is in the trial production stage, while four more — located in Langfang, Xi’an, Chongqing and Zhukou  — are currently under construction. The CKFP model in China may be duplicated in other countries that Wilmar has integrated operations in, such as India and Indonesia.
Leow and Yeow highlight that the expansion into CKFP is Wilmar’s strategy to reduce the earnings impact from highly volatile commodity prices. This is particularly critical for its operations in China under YKA, where raw material costs make up 88%-90% of its cost of production.
In 2021, the high fluctuation of raw material prices, which cannot be easily passed down to consumers, led to a 41% decline in profit before tax (PBT) from the food products division.
“The consumer packs business is likely to remain challenging in 2022 and expect the better contributions from its medium and bulk packs to mitigate the weaker PBT contribution from consumer packs,” the analysts add.
Meanwhile, Wimar’s back-to-back soybean crushing margins in China are still challenging, with high soybeans prices not being able to be covered by the sales of soybean meal and soybean oil.
“China’s domestic soybean meal consumption is weak due to poor hog and poultry margins. At the same time, soybean oil consumption is shrinking and its price in China is not keeping up with the rise in international prices. Thus, there will be negative impacts on soybean crushing margin,” Leow and Yeow noted.
Wilmar’s palm and sugar operation, which are enjoying good average selling prices and processing margins should be able to partly mitigate the weakness in consumer packs and soybean crushing in China, the analysts add.
UOB KH maintains its earnings forecast of US$1.77 billion, US$1.82 billion and US$2 billion net profit for 2022, 2023, and 2024 respectively. The 2022 core net profit forecast is 6% lower y-o-y compared with the US$1.89 billion for 2021, as the analysts are expecting lower earnings contributions from Wilmar’s China operations.
UOB KH’s target price of $5.50 derived using SOTP valuation by pegging a 2022 PE of 17x for the China operations and a blended 11x PE for the non-China operations.
As at 12.37pm, shares in Wilmar International are trading 4 cents lower or 0.85% down at $4.67.
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time of esg taggings 0.027563976123929024
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-ups-sgxs-tp-933-strong-monthly-performance-amid-market-volatility
UOB Kay Hian analyst Llelleythan Tan has kept his “hold” recommendation on Singapore Exchange (SGX) as he sees the exchange as “fully valued” at its current price levels with no major potential upside.
In his report dated March 30, Tan says he remains cautious on the impact on SGX’s earnings from the competition from the Hong Kong Exchange (HKEX) and sliding securities daily turnover value (SDAV).
“We think significant revenue from new initiatives such as SGX’s FX ETC network and Special Purpose Acquisition Company/Companies would take time to gestate and major success from these initiatives could re-rate SGX to trade similar to peers’ average (28.6x),” he writes.
That said, the analyst has upped his target price to $9.33 from $9.09 previously, pegging it to an FY2022 P/E multiple of 23.7x, +1 standard deviation of SGX’s historical forward P/E.
In February, SGX reported 21.1% y-o-y and 35.9% m-o-m growth in its SDAV in February.
The higher SDAV, despite three fewer trading days during the month, was attributable to the upcoming interest rate hikes at the time, the elevated risks of inflation, as well as geopolitical tensions between Russia and Ukraine.
Heavily traded in-favour stocks such as Rex International Holding and Samudera Shipping Line also contributed to the outperformance, notes Tan.
In addition, derivatives daily average volume surged to nearly two-year highs since March 2020 driven by an increased demand for risk-management tools amid heightened volatility.
Both forex and commodity derivatives also outperformed in February amid the heightened volatility around the world caused by the Ukrainian war and SGX’s commanding market share in key product markets.
In his report, Tan also notes that geopolitical events or crises historically favour the SGX as SDAV and DDAV volumes are directly proportionate to greater trading volatility.
“The recent Ukraine-Russia conflict has increased SDAV and DDAV volumes as investors weigh in new risks to the global world order,” Tan writes.
“Looking back to statistics from 2012, both SDAV and DDAV increased sharply after events occurred. However, over time, SDAV generally softens after two to three quarters as investors start to fully grasp associated geopolitical risks with trading volatility which will then subside,” he adds.
“On the other hand, DDAV has actually gradually trended upwards after geopolitical events. We reckon that this is due to investors becoming more sophisticated, leading to increasing demand and adoption for risk-management products such as derivatives,” Tan continues.
Given the challenging macro-economic environment and uncertain geopolitical outlook, Tan expects SGX to see an increase in DDAV moving forward.
“We opine SDAV would soften in the coming months while DDAV continues its uptrend, unchanged from our previous expectations,” he says.
The higher benchmark interest rate raised by the Fed in March is also expected to come with higher treasury income.
The higher treasury income may see a significant boost some time in 2HFY2023 or 1HFY2024, given that there is usually a time lag of six to nine months, says Tan.
Re-rating catalysts include secondary listings of foreign-listed entities on the exchange, as well as a longer-than-expected period of trading volatility, he adds.
Shares in SGX closed 7 cents higher or 0.71% up at $9.89 on March 30.
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time of esg taggings 0.04641973017714918
https://www.theedgesingapore.com/capital/brokers-calls/sia-engineering-preferred-proxy-ride-singapores-aviation-recovery-uobkh
UOB Kay Hian Research analyst Roy Chen has re-initiated a “buy” recommendation on SIA Engineering with a target price of $2.80, while keeping a “market weight” rating on the overall Singapore aviation sector, as he sees the recovery of the sector as being “well on track”.
See: UOB Kay Hian expects Singapore aviation sector to recover by end-2024, sees SIAEC as top pick to ride on recovery
This is in lieu of increasing flight activities at Changi Airport with the recent relaxation of international restrictions, which Chen believes will outpace the expected passenger volume recovery.
With that, the group is strategically positioned in a faster lane of recovery compared to peers whose financial performances are more geared to the relatively laggard passenger volume growth.
According to Chen, SIA Engineering is set to be the first to regain positive core net profit within the local aviation scene (excluding government grants). “We are now projecting net profit to recover to $92 million in FY2023 ending March 2023, representing 57% of its pre-Covid-19 (FY2019) level,” says the analyst, especially in light of the consistent narrowing of core net losses over the past five quarters. If SIA Engineering keeps up the trajectory, it is expected to report core net profit in the next one to two quarters.
The group is also well positioned to resume dividend payment in as early as FY2023, according to Chen. This is considering its earnings recovery and strong balance sheet, displaying $679 million in net cash. “We do not rule out the possibility of a special payout by FY2024, given its major shareholder Singapore Airlines’ (SIA) cash needs for mandatory convertible bond (MCB) redemption,” Chen says.
Moreover, SIA Engineering engine and components’ joint ventures are set for positive recovery, after also demonstrating resilience during the Covid-19 pandemic, working with airlines and engine original equipment manufacturers (OEMs) to bring forward service volume with the impending heightened demand with full recovery of the aviation industry.
This has been made possible with SIA Engineering’s strong business development foundation, especially with regard to strengthening relationships with global leading engine OEMs for the group to expand its existing engineering capabilities. A prime example would be its acquisition of Malaysia-based SR Technics Malaysia for SIA Engineering to optimise its maintenance, repair and operations (MRO) business.
Some risks the analyst notes include events that disrupt the sector’s recovery and increase competition for SIA Engineering’s MRO business.
As at 10.42am, shares in SIA Engineering are trading flat at $2.47 at an FY2022 P/B ratio of 1.6x on March 30.
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time of esg taggings 0.029914757004007697
https://www.theedgesingapore.com/capital/us-economy/higher-yields-seen-headwinds-investors-fomcs-hawkish-stance-could-intensify
The US Federal Reserve’s move to raise interest rates by 25 basis points during the Federal Open Market Committee (FOMC) meeting on March 15 came as no surprise to analysts.
At the meeting, one of the members, St. Louis Fed president James Bullard, even voted for a 50 basis point rate hike, which chairman Jerome Powell did not rule out.
If core inflation, which is currently above 6% of the consumer price index (CPI) does not return to the Fed’s goal of 2%, a 50-basis point rate hike is likely, notes Bank of Singapore’s (BoS) chief economist Mansoor Mohi-uddin.
On March 21, Powell continued to turn more hawkish, warning that interest rates may need to see a further increase at upcoming Fed meetings.
To Mohi-uddin, Powell’s remarks thus “add upside risk to our forecast that the Fed will stick with 25bps rate increases at each remaining meeting of the year when raising the fed funds rate to 1.75-2.00%”.
Powell had also hinted that the Fed could begin quantitative tightening (QT) in May to ease inflationary pressures.
Given the Fed’s resolve to cut inflation, Mohi-uddin is now expecting seven rate hikes this year from five increases before. He has, however, kept his estimates of seeing four rate hikes in 2023, the same.
"This implies [that] we see the fed funds interest rate reaching 2.75-3.00% by the end of next year, a steeper path of tightening to our previous forecasts,” writes the analyst in his March 17 report
It also implies that his 10-year treasury yield forecast at 2.35% over the next 12 months is likely to be hit earlier,” he adds.
Under Mohi-uddin’s estimates, he also sees higher yields being headwinds for investors, although the 10-year treasures would need to breach 2.80% to 3.00% for the decades-long downtrend in yields to reverse to the detriment of risk assets.
In addition, yield curves are likely to flatten further and may invert temporarily but reopening from the pandemic will keep US growth firm and reduce the risks of stagflation this year.
“Lastly, the USD will benefit from the Fed hiking faster compared to other central banks”, says the economist.
Fed rates to raise increase at every meeting in 2022: DBS
To DBS Group Research’s chief economist Taimur Baig and senior rates strategist Eugene Leow, the developments at the FOMC meeting were “unsurprising” to global markets.
However, the analysts estimate headwinds may materialize for emerging markets (EMs) from a hawkish Fed, as has already been the case.
“But most Asian economies have undergone repeated stress tests with capital flow volatility in the past years, and have shown that their relatively improved reserves and external account position can handle episodes of risk on and off. As long as China’s macro risks are contained, Asia can navigate the Fed’s path,” they write in their March 17 report.
The way they see it, the FOMC’s statement was “focused on price pressures and yet comfortable that higher interest rates and quantitative tightening won’t undermine the economic outlook materially”.
“The Fed’s statement and actions reflect no concern about stagflation, period,” write the analysts, who note that the Fed now expects the policy rate to be at 2.88% in 2023 and 2024.
“[This implies] restrictive monetary settings compared to the neutral of 2.375% (downwardly revised from 2.50%),” they add.
Furthermore, the median projections made by the members of the FOMC are “constructive” for the medium term, note the analysts from DBS.
“Real GDP growth of over 2% (i.e., above potential) is expected through 2024, with no worsening of labour market conditions and core inflation heading toward 2%. Are these reasonable? We think so, especially if inflation expectations remain anchored, which has been the case so far,” they write.
“The continued stability of inflation expectation would be a function of wage and goods price pressure to dissipate as pandemic related disruptions fade,” they continue. “These two developments will make or break US economic outlook in the coming quarters, and will make the difference between the Fed making steady progress toward normalisation or playing catch-up that will un-nerve the markets.”
To this end, Baig and Leow are expecting the Fed to raise their rates in every meeting this year, which is six times, and then four more times in 2023. This would take the Fed funds rate to 2% by end-2022 and 3% by end-2023.
“The improved balance sheet of the households and corporates, we think the US economy is capable of absorbing these hikes. An economy that is growing by over 2% in real terms should be able to live with a real positive interest rate of around 1%,” they write.
“These hikes will come with some risks for those with high leverage, will likely strengthen the growth-to-value narrative in the equity markets, and some degree of spread widening in the credit market is likely,” they add. “The cyclical strength of the economy is substantial though, from balance sheet to the jobs outlook. As reflected in the FOMC statement, these developments need not cause major dislocation to wealth, investment, or consumption.”
Finally, DBS’s Baig and Leow are neutral on rates, noting that the Fed and the market are in agreement on rates out to 2023.
“It would be more interesting to fade extremes (in either direction) when they do occur. We are somewhat wary on duration (10-year onwards) and think that the market may be underestimating QT (we think QT will start in the immediate two meetings) and the eventual selling of mortgage-backed securities or MBS (possible in 2023),” they write.
“We think that the curve might be overly flat in the short term and there is scope for modest steepening. However, in the medium term, a very flat (to inverted curve) towards the tail end of tightening (2H2023) is probably hard to avoid,” they add.
Cumulative basis point increases expected in 2022: UOB
UOB’s senior economist Alvin Liew says the FOMC meeting on March 15 to 16 was “visibly hawkish” as the Fed raised its rates by 25 basis points.
The Fed had also signalled that more rate hikes will follow with its focus on bringing inflation down.
“Given the explicit hawkish trajectory spelt out in the March FOMC, we now expect faster Fed Funds Target rate (FFTR) hikes by clips of 25 basis points in every remaining meeting of this year,” writes Liew in his March 17 report.
This implies a cumulative increase of 175 basis points in 2022, bringing the FFTR higher to the range of 1.75% to 2.00% by end of 2022, up from Liew’s previous forecast of 150 basis points in hikes to 1.50% to 1.75% by the end of the year.
“We also see a risk that the Fed could still surprise with a more aggressive 50-basis point hike in May, especially if March’s CPI inflation (due on April 12) prints well above 8% y-o-y,” he adds.
Liew has also projected three more rate hikes of 25 basis points in 2023 before the Fed concludes its current rate hike cycle.
“[This is estimated to bring] the terminal FFTR to 2.50%-2.75% by 3Q2023 (from the previous terminal rate forecast) [of] 2.25-2.50% by early 2024,” he says.
On the outlook for QT, the UOB economist expects the Fed to “issue the addendum to the Policy Normalization Principles and Plans in the upcoming May 2022 FOMC, followed by the formal announcement of QT to be made in the June 2022 FOMC and to start in July 2022”.
“[This is a] much shorter time gap between quantitative easing (QE) taper and the first policy rate hike when compared to the 2017-2019 episode which was three years apart,” he says.
Other analysts say…
The hike at the FOMC meeting in March was more hawkish than expected by investors, as well as the market, say analysts at Amundi Asset Management, Jonathan Duensing, Timothy Rowe and Paresh Upadhyaya.
The way they see it, the short end of the US yield curve is “more appropriately priced now that the market has discounted a more aggressive tightening cycle”.
“The long end of the US yield curve will potentially be influenced by geopolitics, growth prospects and inflation expectations,” they add.
“Should US inflation expectations become unanchored, the Fed has expressed a willingness to adjust policy more aggressively. For risky assets, the Fed’s general affirmation of market expectations is supportive, as near-term policy uncertainty wanes.”
According to the team at DWS, the impact of higher US interest rates will be limited for US real estate and private infrastructure.
“In a potential stagflation scenario in Europe, core-RAB regulated infrastructure may outperform in the medium-term, but diversification across core plus and value-added strategies would arguably still be preferable from a long-term investment perspective,” the team writes.
“Similarly, in US real estate, higher short-term rates will not necessarily drive longer-term rates higher. To the extent that longer-term rates are rising, it is largely due to rising inflation, which is positive for real estate. Real (inflation-adjusted) interest rates are still deeply negative. Real estate yields continue to offer an attractive spread against real rates on inflation protected government bonds,” they add.
Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International is keeping his expectations of a rate hike of three or four times this year, following Powell’s intention of bringing back price stability at the meeting.
“But the ensuing tightening conditions from a very hawkish Fed will damage growth,” he says.
“All in all, given our stagflationary baseline which got exacerbated by the Russia/Ukraine war, it appears that the Fed’s focus will weigh more on inflation fighting despite the uncertainty created by the situation in Ukraine based on the meeting [on March 15],” he adds.
“This creates further headwinds for asset markets as the central bank put remains further out of money in this cycle. From an asset allocation perspective, we remain cautious on both equities and credit,” he continues.
Allison Boxer, an economist at PIMCO says she expects the Fed to focus on the higher inflation as well as concerns on inflation expectations, compared to downside risks to growth in the next few months.
“As a result, our baseline forecast remains that there will be rate hikes at consecutive Fed meetings and a meaningful further tightening of policy throughout the year. This faster pace of tightening raises the risk of a hard landing further down the road and suggests a higher risk of a recession over the next two years,” she writes.
article_here
time of esg taggings 0.10754522308707237
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-expects-singapore-aviation-sector-recover-end-2024-sees-siaec-top
UOB Kay Hian analyst Roy Chen has maintained his “market weight” recommendation on the Singapore aviation sector as he sees the recovery of the sector as being “well on track”.
“The consensus among aviation experts indicates that the sector is likely to recover to the pre-Covid-19 level towards end-2024 (FY2025 for Singapore-listed players),” writes Chen in his March 29 report.
To be sure, the International Air Transport Association (IATA) has estimated global air travel passenger volume to recover to 103% of its pre-Covid-19 levels by 2024, with the Asia Pacific (APAC) region trailing behind at 97% of its pre-Covid-19 levels in 2024.
“Our conversations with the management of the three listed Singapore aviation companies (Singapore Airlines or SIA, SATS and SIA Engineering Company or SIAEC) have revealed a similar timeline – the consensus is that the Singapore aviation sector is likely to fully recover by FY2025,” the analyst says.
“We expect positive news flow on air traffic recovery and Singapore’s further opening up to keep sentiment towards the aviation sector buoyant in the medium term,” he adds.
The recent relaxation of international restrictions by the Singapore government is also a positive development for the Singapore aviation sector, notes Chen.
“[We] expect it to help Singapore move closer towards its goal to restore the passenger volume at Changi Airport to at least 50% of the pre-Covid-19 level in 2022,” he adds.
Within the sector itself, however, Chen sees varying paces of recovery among the counters, with SIAEC being the fastest, followed by SATS.
“Due to airlines’ proactive capacity re-activation plans (SIA will re-activate a flight as long as the operation is cash-generative), we expect flight activities to recover relatively faster than passenger volume,” the analyst says.
“As such, revenue of businesses directly geared to flight activities, including SIAEC’s line maintenance services (about 50% of its pre-Covid-19 revenue) and SATS’ ground handling services (30%) should recover faster than revenue of businesses linked to relatively lagged passenger volume, such as SIA’s passenger flown revenue (80%) and SATS’ infight catering revenue (40%),” he adds.
Chen also expects SIAEC and SATS, which are both in net cash positions, to resume paying dividends in FY2023, when they would have returned to core net profits, according to his estimates.
“SIAEC’s dividend outlook is further raised by its 77.6% shareholder SIA’s cash needs for [the redemption of its mandatory convertible bonds (MCBs), which is likely to be in early FY2025]. As such, we do not rule out the possibility of a special payout by SIAEC by FY2024,” says Chen.
With this, the analyst has identified SIAEC as his preferred proxy to the recovery of the aviation industry, with SATS coming in second.
He has re-initiated “buy” calls on SIAEC and SATS with target prices of $2.80 and $4.65 respectively.
“SIAEC has made good progress in its business developments during the pandemic, including deepening relationships with some of the world’s leading engine original equipment manufacturers (OEMs). These developments are expected to contribute to SIAEC’s growth in the long term,” says Chen.
“SIAEC is currently trading at 14.4x FY2025 P/E, which is 2.3 standard deviation below its five-year mean of 23.2x in a normal market (FY2014-2019),” he adds.
“We like SATS for its regional market leadership in inflight catering and aviation gateway services, making it a primary beneficiary of the air traffic recovery in the APAC region. We also applaud the company’s efforts to diversify into the non-aviation segment and expect it to become another growth engine for SATS in the longer term,” writes the analyst.
“Having said that, we note some of its recent greenfield investments (e.g. the central kitchen investments in India and Singapore) may take a gestation period of two to three years before bearing fruit,” he adds.
Furthermore, Chen feels SATS would face keener cost pressure from inflation and headcount build-up in the near term, although he sees these pressures being passed down to its customers as business conditions for SATS continue to recover.
“SATS is currently trading at 17.6x FY2025 P/E, which is 0.8 standard deviation below its five-year mean of 19.9x in a normal market (FY2014-2019),” says Chen.
On SIA, Chen notes that its MCBs have to be redeemed earlier before the airlines’ earnings recovery can deliver meaningful value accretion to SIA’s shareholders. Besides, the MCBs would turn out to be “highly dilutive” if they are held to maturity and then converted, he adds.
“The impact of Covid-19 on SIAEC and SATS is largely transient (manifested by goodwill/property, plant and equipment or PPE impairments, one-off in nature),” says the analyst.
“We caution that SIA, the largest listed proxy to Singapore aviation, has had its valuation run beyond the justified level by traditional valuation metrics,” he adds.
Chen has also re-initiated coverage on SIA with a “hold” recommendation and a target price of $4.80.
“[SIA] is currently trading at 1.50x FY2023 P/B, an unprecedentedly high level or 4.2 standard deviation above its long-term historical mean of 0.79x. This could be due to the market: not fully comprehending the impact from the MCBs (and their distortion on SIA’s financials), and/or trying to speculate on the strong market sentiment from the positive news flow,” the analyst writes.
“We have recommended ‘hold’ on SIA in light of the anticipated buoyant sentiment to the company. However, we highlight that we have applied very favourable assumptions for SIA, with our target price aggressively based on a discounted cash flow (DCF) value three years down the road. Investors are recommended to sell SIA into further share price strength,” he adds.
Despite the positive sentiment on the sector, which includes catalysts such as a faster-than-expected pace of global opening up and travel relaxation, Chen warns that newer Covid-19 variants that are more fatal or infectious may disrupt the process of opening up.
The further escalation of the Russia-Ukraine war may also dampen travel sentiment.
Shares in SIAEC, SATS and SIA closed $2.47, $4.34 and $5.50 on March 29.
article_here
time of esg taggings 0.03694660007022321
https://www.theedgesingapore.com/capital/brokers-calls/venture-corporation-displays-positive-indicators-and-attractive-valuation
UOB Kay Hian Group Research analyst John Cheong has kept a “buy” rating on Venture Corporation with a target price of $22.80.
Venture Corporation’s FY2021 ended December 2021 results highlight that it expects a “robust demand outlook” based on customers’ orders and forecasts across various technology domains, according to Cheong. Some key areas of potential include the life science domain, where the demand for products in the area of analytical instruments remains strong, in addition to next-generation sequencing in research and development (R&D) labs being engaged in are driving demand.
As at end 2021, Venture Corporation recorded net cash of $808 million, which accounts for about 15% of its current market capitalisation, as compared to its US-listed peers, of which many were in net debt positions. More importantly, Venture Corporation has been consistent in its dividend payouts, as it has been dishing out the same amount of dividends or better than that in the preceding years.
Additionally, positive market momentum is observed across instrumentation, test and measurement, networking and communications, as well as advanced industrials domains, where several new product introductions are expected.
Customers also appear to be guiding for revenue growth for 2022, in the range of 5%-16% y-o-y. “We believe Venture Corporation could capture higher growth than its customers’ revenue growth, given its ability to provide customised solutions for new product launches and entrance into new high growth domains including semiconductor and electric vehicles,” Cheong says, while noting that customers specifically in the lifestyle and wellness sectors have provided a positive outlook.
Moreover, Hon Hai, notable for being the largest assembler of iPhones, has noted that a major improvement in part shortages is likely to only be in the first quarter, with supply constraints on a whole expected to ease in the second half of the year.
In addition, further easing of global border restrictions should help to improve the component shortage issues, from easier access to labour and reduction of air freight rate.
To be sure on the group’s positive momentum, its executive chairman Wong Ngit Leong has been purchasing shares in Venture Corporation. On Nov 8, 2021, Wong, who is also the largest shareholder, increased his holdings by 200,000 shares at $18.73 per share. Previously, his acquisition of 566,300 shares at an average price of $14.45 per share from July to September 2017 turned out to be a strong positive signal as the stock’s share price hit an all-time high of $29.50 in April 2018.
On a whole, Cheong remains positive on Venture Corporation’s long-term growth as it moves forward with collaborating with successful and innovative customers in various high-growth and fast expanding market segments.
As at 10.05am, shares in Venture Corporation are trading at 2 cents higher or 0.11% up at $17.75. The stock is trading at a FY2022 P/B ratio of 1.8x and dividend yield of 4.5%.
article_here
time of esg taggings 0.08320730505511165
https://www.theedgesingapore.com/capital/brokers-calls/united-hampshire-us-reit-provides-certainty-uncertain-times-uob-kay-hian
UOB Kay Hian Group Research analyst Jonathan Koh has kept his “buy” rating on United Hampshire US REIT (UHU) at a target price of 97 US cents.
For 2HFY2021 ended December, the analyst notes that the distribution per unit (DPU) grew 0.7% y-o-y to 3.05 US cents, in addition to gross revenue and net property income (NPI) growing 7.9% and 8.7% y-o-y respectively.
Koh forecasts a DPU of 6.6 US cents for FY2022 and 6.3 US cents for FY2023, considering the acquisition of Colonial Square on Nov 12, 2021 and Penrose Plaza on Nov 24, 2021; as well as the divestment of the Elizabeth and Perth Amboy self-storage properties for a consideration of US$49 million ($66.7 million). UHU recognises the divestment gain of US$3.1 million, where the selling price is 26.7% above purchase price and 10.4% above appraised valuation. It is expected to be completed in 2QFY2022 ended Dec 2022.
Additionally, UHU executed 38 new and renewal leases that total to 437,528 square feet in 2021. Where UHU’s weighted average lease expiry (WALE) of eight years has allowed for “stable income”, management has reduced leases expiring in 2022 to a minimal of 1.5%, down significantly from 9.2% at the start of this year, according to Koh.
According to Koh, this is also in light of the demand for groceries remaining stable as many employees continue to work from their homes. Moreover, full-service and quick-service restaurants are benefiting from pent-up demand to dine out, while movie theatres and fitness centres, which were the most disrupted by the Covid-19 pandemic, saw substantial recovery in foot traffic.
As of December 2021, UHU has a conservative aggregate leverage of 39.0%, with 79.6% of its total debt hedged into fixed rates. “It maintains a well staggered debt maturity profile to minimise refinancing risk, [where] its weighted average debt maturity is 2.5 years with no refinancing until 2023,” says Koh. The analyst also notes that UHU’s weighted cost of debt currently stands at 2.63%, with a healthy interest coverage ratio of 6.5x.
Overall, UHU sees gains in fair value of investment properties of US$20 million in 2HFY2021 ended Dec 2021. With its new properties such as Colonial Square and Penrose Plaza valued at US$81.5 million, UHU’s portfolio has increased by 17.6%, according to the analyst.
As at 10.20am, units in UHU are trading flat at US 63 cents with an FY2022 P/B ratio of 0.9x and DPU yield of 10.2%.
article_here
time of esg taggings 0.031407431000843644
https://www.theedgesingapore.com/news/singapore-economy/singapores-manufacturing-output-176-february-beating-market-estimates
Singapore’s manufacturing output surged 17.6% y-o-y in February, surpassing market estimates of a 6.3% y-o-y increase, according to data released by the Singapore Economic Development Board (EDB) on March 25.
The strong performance is underpinned by the recovery in global trade, especially on the back of healthy demand in the semiconductor and biomedical segments, says UOB economist Barnabas Gan.
“Other factors that have supported Singapore’s manufacturing momentum also include the gradual reopening of international borders, which resulted in higher levels of maintenance, repair and overhaul activity from commercial airlines,” he adds.
On a seasonally adjusted month-on-month basis, manufacturing output for the country increased by 16.6%.
Excluding biomedical manufacturing, output grew 16.8% y-o-y and 12.3% m-o-m.
During the month, the electronics cluster grew 32.4% y-o-y due to output expansions across all segments. The semiconductor segment grew 39.4% y-o-y due to strong demand from 5G markets and data centres, while the electronics cluster grew 15.0% y-o-y.
Output for biomedical manufacturing increased by 25.3% y-o-y in February, with the pharmaceuticals segment expanding 46.7% y-o-y due to higher production of biological products and a different mix of active pharmaceutical ingredients. The medical technology segment also expanded 5.8% y-o-y with higher export demand for medical devices.
General manufacturing output rose 12.6% y-o-y with all segments including an output increase. This was led by the food, beverage & tobacco segment, which expanded 12.8% y-o-y.
Output for transport engineering grew 4.5% y-o-y, with the aerospace segment expanding by 11.3% y-o-y and the marine & offshore engineering segment increasing by 0.9% y-o-y.
Output for precision engineering rose 1.0% y-o-y amid the 8.7% y-o-y decline in output for the precision modules & components segment. This was offset by the 6.1% y-o-y expansion logged in the machinery & systems segment.
Chemicals output was the only one to register declines in February, extending its decline from January. During the month, petroleum refining throughput increased 14.8% from the low production base in February 2021, although this was offset by the contractions in the specialties, petrochemicals and other chemicals segments at 2.0%, 3.1% and 8.8% respectively.
In his report, UOB’s Gan says Singapore remains well-positioned to transit into a situation where we live with Covid-19 as an endemic.
“While the easing of restrictions [announced by prime minister Lee Hsien Loong on March 24] will be beneficial especially to Singapore’s hospitality and services industries, there should also be positive spill-over effects to Singapore’s overall growth dynamics from these measures,” writes Gan.
“A more direct impact to Singapore’s manufacturing prognosis will likely stem from the gradual returning of vaccinated travellers into Singapore without the need for Vaccinated Travel Lanes (VTL) flights,” he adds. “With the easing of restrictions for inbound travellers, this could eventually lead to an increase in labour supply to augment Singapore’s labour-intensive industries such as maritime, construction and selected manufacturing industries.”
On this, Gan has maintained his estimate of a 4.0% growth for the manufacturing sector in the FY2022.
“This suggests that despite the high-base growth rate seen in 2021, global trade activity is expected to stay buoyant this year,” he writes. “While geopolitical and Covid-19 risks are present at this juncture, we take comfort from the ongoing global economic momentum, coupled with a strong global trade backdrop and higher Covid-19 vaccination rates in Singapore.
In addition, Gan is buoyant on Singapore’s manufacturing sector for the year ahead, with the recovery especially in the transport engineering sector being “exceptionally encouraging”.
“[The recovery] may stay supported by the gradual reopening of international borders. Moreover, the global economic momentum into 2022 is likely to support other growth-related industries such as general manufacturing, chemicals, electronics and precision engineering, while the ongoing Covid-19 cases could still lend some strength to Singapore’s volatile biomedical manufacturing arm,” he says.
Meanwhile, amid the geopolitical tensions and the uncertainty surrounding the war in Ukraine, Gan is “moderately concerned over the second-order trade impact to Russia’s top trading partners, including China, Europe, US and Japan”.
OCBC’s chief economist and head of treasury research & strategy, Selena Ling, has also kept her manufacturing growth forecast for 2022 unchanged at 3.5%.
According to Ling, this is due to the high base in 2021, and due to the current headwinds from the heightened geopolitical uncertainties, sustained inflation and supply chain disruptions.
“It is worth noting the Ukraine war really started late February and into March, so the full impact may not have been felt yet. Manufacturers usually have some inventory buffer which they will draw down first,” she says.
“However, we may find out very soon if the hit to Eurozone growth and supply chain bottlenecks will crack soon since the war is now dragging into the second month. Moreover global growth forecasts are already being pared lower, especially for the major economies including the US, Eurozone etc. Hence there may be some volatility showing up in the economic data including manufacturing in the coming months,” Ling adds. “The silver lining is the relaxation of many travel restrictions within the region including Singapore, which may give the maintenance, repair, and overhaul (MRO) demand a lift ahead.”
February’s growth is close to Ling’s initial forecast of 17.2% y-o-y.
“For the first two months of 2022, industrial production is off to a good start at 9.4% y-o-y, but may moderate in the coming months as the impact from the Russian-Ukraine conflict begin to exact a toll via the supply chain conduit and also higher inflation for imports of key components and raw materials,” she says.
For JP Morgan analyst Nur Raisah Rasid, February’s manufacturing figures stood slightly weaker than her expectations of a 17.6% y-o-y expansion.
“Through the month-to-month volatility in tech and biomedical output, production excluding biomedical and electronics tends to be a useful bellwether of broader capital spending and this indicator fell a modest 0.2 % m-o-m on a seasonally adjusted basis but was up 15.3% quarter-on-quarter in sequential terms,” notes the analyst.
In her report, Rasid also noted the encouraging signs for non-goods recovery.
“While there could be near-term growth undulations emanating from global growth spillovers, the gradual policy shift to an endemic equilibrium - permitting the loosening between new Covid-19 cases and stringency as is apparent in the recent data gives us confidence that the recovery in non-goods activity should be relatively uninterrupted particularly following the announcement this week of the broad loosening in Covid-19 restrictions,” she writes.
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time of esg taggings 0.041916317073628306
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-keeps-sembmarines-tp-11-cents-following-decent-sized-order-win
UOB Kay Hian analyst Adrian Loh has kept “buy” on Sembcorp Marine (SembMarine) with an unchanged target price of 11 cents following its order win for the construction of a wind turbine installation vessel (WTIV).
A WTIV is a vessel that’s used specifically for installing wind turbines. It can be designed as a floating vessel in the shape of a ship or a jack-up.
“We understand that SembMarine’s contract involves the latter, which is important given that SembMarine has extensive experience in constructing jack-up-like designs given its history in the offshore marine industry. Given their work in the renewable energy sector, the environmental footprint of these vessels is important, with high efficiency and low-carbon emissions essential attributes,” writes Loh in his report dated March 24.
SembMarine’s order win is the first since June 2021, where it clinched a contract for the modification work for a Floating Production Storage and Offloading vessel in Brazil in June 2021.
While the value for the current contract was not revealed in SembMarine’s announcement on March 23, Loh has estimated that the win is worth an approximate $600 million, according to checks with the industry.
The figure also references a similar WTIV order won by Keppel Corporation in 4QFY2020, which was worth $600 million.
SembMarine’s current contract win could even be as large as $800 million depending on the specifications, he adds.
The size of the global WTIV market may be small, but it is expected to grow significantly.
To date, there are only 16 specialised WTIVs in operation globally despite the high level of demand.
In order to fill the demand, companies have, instead, re-purposed their jack-up rigs to either install foundations or install turbines or both.
To this end, Loh expects more WTIVs to be ordered in the medium term as the market grows in size and matures, which then expands the addressable market for SembMarine.
“Importantly, the growing size of the wind turbines will also play a role in driving new orders. Historically, average wind turbine sizes have been relatively small at around 3 megawatts (MW) in 2010. However, this has grown to 8MW in 2020 with industry estimates that this would grow to 25MW by 2025. Thus, larger wind turbines will require more specialised heavy-lift WTIVs to cater to the industry’s demand,” he notes.
In addition, recent remarks from the company’s management have indicated that 2022 will be a strong year.
“During SMM’s annual results briefing at end-Febuary, management highlighted that 2022 results will be “significantly better” than 2021. In addition, the persistent labour issues in 4QFY2021 have been largely solved and thus the company will be able to handle the new order wins that are expected to be announced over the next 6-12 months,” says Loh, who also notes that the company had “kitchen-sinked” a high level of provisions in its 2021 results.
As a result, the analyst does not expect the company to be materially impacted by impairment losses in FY2022.
Loh’s current target price is based on a target multiple of 0.88x, pegged to his 2022 estimated book value per share of 13 cents. His target P/B multiple represents a 20% discount to the company’s past five-year average P/B of 1.1x.
“Note that we had previously applied a 30% discount but we now view a lower discount as more reasonable given the expected turnaround in the company’s fortunes. With its $1.5 billion rights issue completed, and Temasek’s mandatory general offer at 8 cents a share having lapsed in early-Nov 2021, we believe that much of the corporate-level risk has dissipated,” he says.
Catalysts to SembMarine include new rig orders, as well as new orders for offshore renewable installations or fabrication works as well as repairs and upgrades work for cruise ships and other commercial vessels.
Mergers or joint ventures (JVs) with other shipyards are also re-rating factors.
As at 3.31pm, shares in SembMarine are trading 0.1 cent higher or 1.06% up at 9.5 cents, or an FY2022 P/B of 0.9x.
article_here
time of esg taggings 0.03517181007191539
https://www.theedgesingapore.com/news/brokers-calls/olams-ofi-ipo-unlock-huge-shareholder-value-uob-kh
Armed with strong profitability, the initial public offering (IPO) of Olam Group's subsidiary Olam Food Ingredients (OFI) is expected to be valued at around $8 billion to $14 billion, says UOB Kay Hian Research analyst Llelleythan Tan in an unrated report.
This is after excluding $5 billion of net debt, assuming a 12x-17x 2021 EV/EBITDA multiple based on global peers’ average. These estimates are lower than the reported valuation of GBP13 billion published by Bloomberg on Feb 23, Tan notes.
OFI is slated to list in the second quarter of 2022, with a concurrent primary listing in London and secondary listing in Singapore.
In 2021, OFI posted  impressive 18.8% y-o-y revenue and 16.8% EBIT growths as overall volumes increased 13.3% y-o-y. Driven by larger capacity expansion, acquisitions and product acquisitions, the ingredients and solutions segment grew its volume and revenue by 27%, while EBIT only grew 10%, affected by higher inflation costs and supply chain disruptions in the US.
Post-OFI IPO, Olam will continue to explore various options for the remaining businesses, specifically Olam Agri which contributes around half of the group’s EBIT, says Tan. Options currently being explored include the introduction of strategic minority partners or a potential IPO and demerger of Olam Agri.
“Compared to the current market cap of $6.6 billion, these strategic options could unlock huge value with OFI’s IPO alone to provide around 100% upside, according to Bloomberg consensus.”
Tan points out that Olam’s food security solutions could appeal to sovereign wealth funds and giant food companies. Given the company’s unique ability to secure food supply from its established food sourcing ability, Olam could appear as an attractive investment for sovereign wealth funds and giant food companies that are seeking to ensure food security.
“The Covid-19 pandemic caused high demand for food, rising transportation costs and disrupted supply chains. According to the United Nations, global food prices have risen 20% y-o-y as of Feb 22 and roughly 70 million to 161 million more people faced hunger in 2020 than in 2019.
“Furthermore, Ukraine-Russian geopolitical tensions have further driven up global food prices as both countries account for 14% of global wheat supply, 19% of world’s barley and 4% of maize. Ukraine also accounts for 52% of the world’s sunflower oil export market while Russia is the lead producer of fertiliser. As the conflict rages on, both countries have started limiting global exports, driving demand away to alternative producers such as Olam,” says Tan.
After the strong set of 2021 results with 179.4% y-o-y PATMI growth, Olam’s management guided a positive outlook for 2022 as the industry continues to recover and experience a favourable demand-supply imbalance amidst supply chain disruptions, barring unforeseen circumstances.
“Also, Olam’s exposure to Ukraine and Russia is less than 2%-3% of overall annual revenue,” says Tan.
As at 3.28pm, shares in Olam are trading 2 cents higher or 1.16% up at $1.74.
Photo: Olam
article_here
time of esg taggings 0.030825895024463534
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-explores-alpina-holdings-potential-unrated-report
The Singapore research team at UOB Kay Hian is positive on Catalist-listed Alpina Holdings’ prospects.
In an unrated report dated March 16, the team has noted the company’s strong orderbook of $151 million as at Dec 31, 2021, with the company continuing to proactively tender for new contracts.
According to the UOB Kay Hian team, Alpina’s projects mostly comprise maintenance works in Singapore’s public sector projects, which are recurring in nature.
In addition, the company’s customers are “good paymasters” which include ministries and statutory boards under the Singapore government, notes the team.
Furthermore, the company seeks to win more contracts in the space of enhanced facility management solutions. The sector should see heightened demand as more building facilities in Singapore are aging and require better care.
There are also rising needs for customised and integrated solutions in redeveloped buildings, adds the team at UOB Kay Hian.
“Alpina has extended its scope of services and obtained registration of the FM01 (Facilities Management) Workhead – Grade M3 in 2020. On the other hand, Alpina is on the lookout for acquisitions (in the areas of cleaning services, landscape services, security services and pest control services, etc) to accelerate the extension of its integrated facilities management (IFM) services to enhance its value propositions to customers and boost its revenue streams,” it notes.
Alpina is an established local-based contractor that provides integrated building services (IBS), mechanical and electrical (M&E) engineering services, as well as alteration and addition (A&A) works.
The company launched its initial public offering (IPO) on the Catalist Board of the Singapore Exchange (SGX) in January 2022. Its shares opened on a “ready” basis on Jan 28.
To the team, Alpina is currently trading at an annualised P/E of 6x for the FY2021, which is deemed attractive.
While the company does not have a fixed dividend policy at present, it has indicated in its prospectus, that it intends to distribute dividends of a minimum of 50% of its earnings for FY2022 and FY2023.
To this end, near-term key catalysts include Alpina's stellar performance for the 2HFY2021.
“If Alpina delivers a good set of financial results for 2021, this will reinforce the merits of its business model and build a better track record for the company, which could be a boost in market confidence,” writes the team.
“Annualising 1HFY2021 earnings of $4.1 million and deducting listing expenses of an estimated $1.2 million will result in 2021 earnings of $7.0 million, representing a 40% y-o-y growth from 2020’s earnings of $5.0 million,” it adds.
“To recap, Alpina has delayed the release of its 2021 financial results from February to around May due to a delay in the auditing process, as most of the resources have been directed to the IPO process.”
The winning of more contacts, as well as the successful acquisition of synergistic businesses that are accretive to Alpina’s earnings, are also key catalysts to the company.
Shares in Alpina closed 1.5 cents lower or 6.82% down at 20.5 cents on March 16.
Photo: Alpina Holdings
article_here
time of esg taggings 0.03345158719457686
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-keeps-overweight-call-offshore-marine-sector-industry
UOB Kay Hian analyst Adrian Loh has maintained his “overweight” recommendation on the offshore & marine (O&M) sector as the industry’s fundamentals continue to firm up.
In his report dated March 14, Loh sees several positives for the sector’s outlook, including the higher demand for rigs amid the ongoing supply destruction.
“In the past six months, the offshore drilling industry has been able to maintain its relatively high utilisation levels as it attempts to progress past pre-Covid-19 levels. Together with these stronger utilisation numbers, we note that dayrate numbers have also risen on a y-o-y basis with the exception of drillships,” he writes.
On the back of the elevated demand, the global offshore rig industry has lost 52 rigs, or 7% less y-o-y to 712 rigs as at March 10.
“Importantly, this supply destruction was seen across all asset classes with semi-subs registering the largest decline in supply in percentage terms, down 12% y-o-y to 102 rigs while in absolute terms, jack-up rigs saw 27 units exit the industry,” adds Loh. “In our view, this removal of excess supply is clearly a positive one, and should lead to upward pressure on utilisation and dayrates going forward”.
Furthermore, the analyst sees upside potential for drilling activity in FY2022-FY2023.
Similar to his previous report on Jan 14 , Loh notes that offshore investments in 2022 are set to increase 7% y-o-y, from US$145 billion ($198.04 billion) to US$155 billion, according to independent research company, Rystad Energy.
He adds that the US$150 billion of greenfield projects sanctioned in 2021 (from US$80 billion in 2020) is likely to be repeated in 2022.
To Loh, this will underline the positive outlook for the O&M sector in the short- to medium-term.
“Underlining the strong cash generation by oil companies in 2022, the seven supermajors (BP, Chevron, Eni, Equinor, Exxon, Shell, TotalEnergie) are forecast to return around US$38 billion to US$41 billion to their shareholders via share buybacks, double the US$21 billion in 2014 when oil last cost more than US$100 per barrel,” he writes.
To this end, Loh says the sector could see a cyclical upturn start in the near term should activity in the oil & gas industry strengthen in 2022 and 2023.
The estimate assumes that the variants of Covid-19 are less lethal, that governments are able to deal with Covid-19 as an endemic situation, and that oil prices are not sustained at US$150 per barrel or more which could engender demand destruction, he adds.
Looking ahead, the demand for oil is expected to grow, although forecasts are subjected to the uncertainty from Russia’s invasion of Ukraine.
“Currently, its forecasts are based on global GDP growth of 4.3% in 2022 and 4.0% in 2023, which could be negatively affected should sanctions negatively affect the supply of commodities produced by Russia,” says Loh.
Naturally, the sanctions on Russia will present downside risks to the forecasts for global oil demand.
“Given the enormity of the economic sanctions levelled at Russia for its invasion of Ukraine, the Institute for International Finance last week predicted a 15% contraction in Russia’s GDP in 2022, double the decline from the global financial crisis,” notes the analyst.
“An example of how sanctions can bite is Venezuela’s experience, with the country seeing a 60% contraction in oil demand from 2014 to 2019. Applying this to Russia’s 3.24 million barrels per day (mmbpd) of oil demand in 2020 would result in a contraction of nearly 1.3 mmbpd, thus eliminating over 40% of the EIA’s global oil demand forecast of 3.1 mmbpd for 2022,” he adds.
Loh’s top picks for the sector, Yangzijiang, Keppel Corporation and Sembcorp Marine (SembMarine) have remained unchanged from his previous report.
“Yangzijiang remains inexpensive at an FY2022 P/B of 0.6x and will see margin expansion over the course of the next six months,” he writes.
“Keppel Corp has undemanding valuations and potential positive newsflow regarding the merger or divestment of its O&M business unit; and Sembcorp Marine’s risk-reward appears skewed to the upside post its successful $1.5 billion rights issue in 2021. In addition, the company’s management stated that 2022 will be significantly better than 2021 and we believe there is a high chance that the company will win some meaningful orders this year,” he continues.
Loh has recommended “buy” on Yangzijiang, Keppel Corp and SembMarine with target prices of $1.95, $6.94 and 11 cents respectively.
As at 10.36am, shares in Yangzijiang, Keppel Corp and SembMarine are trading at $1.35, $6.12 and 8.7 cents respectively.
Photo: File photo
article_here
time of esg taggings 0.03424639091826975
https://www.theedgesingapore.com/capital/brokers-calls/uob-yangzijiang-st-engineering-capitaland-investment-among-dbss-picks-hedge
Amid the uncertainties due to the ongoing war in Ukraine, DBS Group Research analysts Yeo Kee Yan and Janice Chua have identified seven counters that investors can use as a hedge.
These are: UOB, Yangzijiang, Singapore Technologies Engineering (ST Engineering), CapitaLand Investment (CLI), AEM, CapitaLand Integrated Commercial Trust (CICT), and Far East Hospitality Trust (FEHT).
“We pick companies that meet these criteria: Benefits from the inflationary environment, structural trend or in a recovery industry able to ride out current uncertainties, positive corporate developments, no direct negative impact from rising oil/commodity prices, no severe impact from supply chain disruption, and less than 20% revenue exposure to Europe,” they write in their report dated March 15.
The analysts have also kept their year-end Straits Times Index (STI) target of 3,550 points.
The target is pegged to slightly below a 13.2x average FY2023 P/E.
The way Yeo and Chua see it, the three Singapore banks, which are index heavyweights with a combined 42% within the STI will benefit from improving net interest margins (NIMs) in a rising rate environment.
“Singapore Telecommunications or SingTel (6.5% weight) is resilient to current uncertainties,” write the analysts. Singapore Airlines (SIA) and ComfortDelgro (CDG), which are negatively affected by the oil price, have small index weights of 2.3% and 0.6%, respectively, they add.
To date, companies under the brokerage’s coverage have seen a 1.8% downward revision to their FY2022 earnings.
“The anticipated delay of China’s reopening timeline till end-2022 affected Genting Singapore and China Aviation Oil (CAO). The industrial sector was impacted by lower Covid-19 relief and higher energy cost for CDG,” note the analysts. “This was offset by positive revisions for banks UOB and OCBC, on an accelerated rate hike cycle.”
Despite the cut in the brokerage's earnings estimates, earnings growth for the constituents under the STI remain strong at 10% for the FY2022, accelerating to 13% for the FY2023, say the analysts.
“Earnings recovered to 98% (ex-property) of the pre-pandemic level in end-2021 and could rise 9.5% above FY2019 results by year end,” they estimate.
To this end, Yeo and Chua expect strong earnings per share (EPS) and distribution per unit (DPU) growth for beneficiaries on the reopening. Counters mentioned include Genting Singapore, SATS, SIA Engineering, CDG, CDL Hospitality Trusts (CDLHT) and Ascott Residence Trust (ART).
“AEM leads the technology sector’s double-digit EPS growth over the next two years, but healthcare’s EPS contraction will come from Riverstone’s lower average selling price (ASP) assumption and delayed expansion plans,” add the analysts.
In their report, the analysts note that the recent 4QFY2021 results season had not factored in the rising prices in oil and commodities, as well as supply chain disruptions due to the Ukraine war.
“If uncertainties are prolonged, transport-related stocks such as SIA, CDG, Hutchison Port Holdings Trust (HPHT) and SBS Transit are vulnerable to oil prices that stay high for longer,” they write.
“Technology could see supply disruptions, e.g., a possible palladium impact on Frencken and Valuetronics. REITs with all-Europe exposure e.g., Cromwell European REIT and IREIT Global may also be affected. Resilient sectors are telcos, healthcare and consumer staples,” they add.
As at 3.57pm, the STI is trading 0.58 points lower or 0.02% down at 3,231.45 points.
Photo: Stock image
article_here
time of esg taggings 0.03706255811266601
https://www.theedgesingapore.com/news/brokers-calls/wilmar-will-still-be-outperformer-2022-uob-kh-and-rhb-maintains-buy
Although Wilmar International may post lower profit in 2022, it will still be the outperformer among the integrated agribusiness companies, according to UOB Kay Hian Research analysts Leow Huey Chuen and Jacqueline Yow Hui Li.
In their March 11 report, the analysts note that Wilmar’s 2022 performance will be driven by palm and sugar operations. Wilmar’s upstream operation of plantations and sugar milling, which accounts for 20% of its 2021 profit before tax (PBT), is expected to perform well given high crude palm oil (CPO) and sugar prices.
Meanwhile, its midstream operation of feed and industrial — which accounts for 46% of its 2021 PBT — will see good earnings from palm oil and sugar refining. This will offset the weakness in China’s soybean crushing operation which is facing low crushing margins and crushing volumes.
The analysts add that Wilmar’s food products segment, which accounts for 25% of its 2021 PBT, may continue to see a margin squeeze as increases in raw materials costs are not fully priced in, especially for household products.
“Prices of food products for industrial use will be more reflective of the hikes in raw material costs with a few months’ time lag and this segment compensates for the weak contributions from household products,” they highlight.
The analysts have maintained their forecast net profit of US$1.77 billion, US$1.82 billion and US$2 billion for 2022, 2023 and 2024 respectively. “The 2022 core net profit forecast is 6% lower y-o-y compared with US$1.89 billion for 2021 as we are expecting lower earnings contributions from its China operations."
UOB KH's target price of $5.50 is derived using SOTP valuation by pegging a 2022 PE of 17x for the China operations and a blended 11x PE for the non-China operations.
Wilmar is one of the top picks for RHB Group Research’s Hoe Lee Leng, who has a “buy” call on the stock with a target price of $5.30. She also has a “buy” call on Bumitama Agri with a target price of 90 cents.
Maintaining “neutral” on the plantation sector, Hoe says RHB’s CPO price assumptions of RM4,300 per tonne for 2022 and RM3,600 per tonne for 2023 will likely need to be revised given the factors affecting prices such as war and changes in regulations. However, this will only be done once prices are less volatile.
“With the recently announced increase in domestic market obligation (DMO) volumes to 30% from 20%, CPO prices spiked once again yesterday by more than RM600 per tonne. We note that while Indonesian players will have to suffer from higher volumes of output sold at the DMO price of IDR9,300 per kg, the higher export prices will offset this negative impact,”
Companies that would benefit from this offsetting impact would mainly comprise those which export their products out of Indonesia such as Wilmar, First Resources, Golden Agri-Resources, says Hoe.
She adds that companies that completely sell their products locally such as Bumitama Agri may not benefit as much from this price increase, as they would be subject to the Indonesian domestic prices as well as the actual DMO sales.
RHB’s target prices for First Resources and Golden Agri are $2 and 31 cents.
As at 10.10am, shares in Wilmar, Bumitama Agri, First Resources and Golden Agri are trading at $4.57, 74.5 cents, $2.09 and 30 cents respectively.
Photo: Bloomberg
article_here
time of esg taggings 0.04926313110627234
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-sees-strong-support-dbs-and-ocbc-30-and-11-respectively-amid
UOB Kay Hian analyst Jonathan Koh has maintained his “overweight” recommendation on the Singapore banking sector as the banks’ exposures to Europe and Russia are minimal.
With the sanctions levelled against Russia, Koh writes that systemic risk to the sector is “elevated” but remains below the levels seen during past crises. “[This is because] Russia is not well integrated into the global financial system,” says Koh in his March 10 report.
“Financial linkages with other countries have been reduced since the European Union first imposed sanctions after Russia annexed Crimea and Sevastopol in 2014. Foreign central banks have not tapped on swap lines and repo facilities established by the Fed, indicating most countries didn’t experience dislocation in their financial systems,” he adds.
So far, the sanctions have had a “crippling impact” on Russia’s financial system with the rouble losing 43% of its value year-to-date (y-t-d) against the US dollar. This has led the Bank of Russia to hike its key interest rate from 9.5% to 20% to defend the rouble, notes Koh.
“The picture is vastly different outside of Russia. The FRA-OIS spread, a measure of dollar funding stress, inched higher by 27 basis points (bps) y-t-d to 34 bps. The deterioration is modest compared to previous crises, such as Europe’s Sovereign Debt Crisis (peaked at 59 bps in December 2011) and the Covid-19 pandemic (peaked at 79 bps in March 2020). Financial markets are under stress but remain functional,” he writes.
FRA-OIS, which represents the US forward rate agreement (FRA) and overnight index swap (OIS) market, is used as a metric of potential stress in banking. It takes the difference between the three-month London interbank offered rate (LIBOR) and the overnight index rate.
Buy into Singapore banks during share price weakness
With the current uncertainties, Koh has estimated a potential downside of 30%-42% in DBS’s share price, a downside of 1%-13% for OCBC, and a downside of 15%-22% for shares in UOB.
These figures were based on the numbers from the past three crises – Europe’s sovereign debt crisis, the crash in oil and gas, as well as the Covid-19 pandemic – as a gauge, says Koh.
“Direction for share prices of banks depends on the progress of peace talks to end the Russia-Ukraine war,” he writes.
“We see opportunities for bargain hunting in current weakness. Technically, we see strong support for DBS at $30 and for OCBC at $11,” he adds.
Koh has kept his “buy” call on DBS with a target price of $35.80.
In FY2022, Koh has pegged a total dividend of $1.44, which represents a dividend payout of 54.8%.
For the FY2023, he has cut his earnings estimates by 6%to $7.06 billion, with an expected total dividend of $1.48, or a payout of 54.7%. During the same year, Koh says he expects the bank’s net interest margin (NIM) to expand by 11 bps to 1.55%, down from his previous estimate of 1.61%.
“DBS provides [a] dividend yield of 4.5% for 2022 and 4.6% for 2023,” he writes.
Koh has also kept his “buy” recommendation on OCBC with a target price of $15.10.
In the FY2022, Koh expects the bank to distribute a total dividend of 56 cents, representing a payout of 50.6%.
In FY2023, Koh has cut his earnings estimates by 2% to $5.46 billion, with an expected total dividend of 60 cents, or a payout of 49.4%. In FY2023, Koh expects OCBC’s NIM to expand by 9 bps to 1.63% from 1.65% previously.
“OCBC provides [a] dividend yield of 4.9% for 2022 and 5.2% for 2023,” says Koh.
According to the analyst, catalysts to the sector on the whole, include the easing of Covid-19 restrictions and a recovery in the 2HFY2022 after the economy has weathered the Omicron variant wave.
Higher dividends from banks on the back of receding Covid-19 risks will also be catalysts to the sector, he adds.
Meanwhile, risks include the escalation of the Russia-Ukraine war to go beyond the invasion of Ukraine. The geopolitical tensions and trade conflicts between the US, China and Russia is also another downside risk to the sector.
On the impending rate hikes, Koh expects a series of four hikes with the Fed Funds Rate reaching 1.0% by end-2022, unchanged from his previous estimate. “We expect no hikes in 2023 (previous: four hikes),” he writes.
Shares in DBS and OCBC closed at $33.26 and $11.72 respectively, while shares in UOB closed at $30.12 on March 11.
Photo: File photo
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time of esg taggings 0.03357108519412577
https://www.theedgesingapore.com/news/bonds-and-treasuries/uob-prices-eur15-billion-covered-bond-due-2025-making-largest-singapore
UOB, on March 10, announced that it intends to issue EUR1.5 billion ($2.24 billion) worth of covered bonds due 2025.
The bonds, which carry a coupon of 0.387% per annum, will be issued as the 11th series under the US$8 billion ($10.89 billion) global covered bond programme.
According to UOB, this is the first issuance of a Singapore covered bond in 2022. The EUR1.5 billion transaction also makes this the largest Singapore EUR covered bond ever.
The bank adds that the bonds have been oversubscribed despite the challenging geopolitical market conditions and competing primary supply.
“[The bond’s] defensive and rare three-year tenor appealed to investors in the current climate and received very robust investor support across central banks / official institutions, real money fund managers and bank treasuries,” says the bank via a March 9 statement.
Of the final allocation, some 55% comprised “very high quality” orders from central banks, official institutions and real money fund managers.
The remaining went to banks, insurance and pension funds.
The final order was approaching EUR1.9 billion from 56 investors.
Sean Henderson, HSBC’s co-head of debt capital markets in the APAC region says: “UOB’s ability to print EUR1.5bn, Singapore’s largest-ever EUR covered bond, amid challenging markets and competing primary supply is testament to the strength of UOB’s credit quality, their ability to move swiftly and selecting a market and tenor that is aligned with strong investor demand given the current climate.”
Shares in UOB closed 65 cents higher or 2.22% up at $29.96 on March 10.
Photo: Bloomberg
article_here
time of esg taggings 0.02722959197126329
https://www.theedgesingapore.com/news/gold/uob-upgrades-gold-positive-raised-forecast-us2100-oz-2qfy2022
UOB Commodities’ head of markets strategy, Heng Koon How, has upgraded his forecast for gold to “positive” from “neutral” as the price of gold jumped above US$2,000 ($2,727.45) per oz.
The price surge came after US president Joe Biden announced the ban of Russian oil imports to the US on March 8.
According to Heng, the surge in the price for gold came very close to the all-time high of US$2,072 per oz that was seen in August 2020.
"Concurrently, there are renewed in-flows to gold ETFs. Purchases of gold jewellery from individual investors will likely intensify alongside global central bank diversification of their reserves into gold,” writes Heng in his March 9 note.
On the back of the growing gold price, Heng has raised his estimates for gold prices to reach US$2,100 per oz for the 2QFY2022. For the 3QFY2022, Heng has estimated that gold prices will reach US$2,150 per oz. Prices are expected to hit US$2,200 per oz in the 4QFY2022 and 1QFY2023, he adds.
In addition, the renewed pull-back in US real yield is likely to support the growth in gold prices further, says Heng.
At the same time, prices for Brent and WTI crude oil rallied, pushing above US$130 per barrel and US$125 per barrel respectively, after the UK announced that it will phase out imports of Russian oil by the end of 2022.
Amidst the on-going rally in prices for energy and commodities, there is a mounting fear of stagflation amongst global investors, notes Heng, who adds that the on-going rise in energy and commodities prices will be “keenly felt” in economies across the world.
“This mounting stagflation fear, coupled with strong safe haven in-flows have now taken over as the dominant drivers for gold price, muting the negative impact from the anticipated rate hikes from the US Federal Reserve,” he observes.
Prior to the recommendation upgrade, Heng writes that he was “reluctant” to raise his gold forecast due to the expectations of the upcoming cycle of rate hikes by the US Federal Reserve.
Citing his report dated Feb 24, Heng previously noted the dilemma that “near term safe haven demand may fuel spike in price” but “given that gold does not generate any yield, in the face of such a strong anticipated rise in interest rates, it is difficult for gold to stage a sustainable rally.”
“Back then, we left our forecast at neutral, but ‘acknowledge the gradual recovery in demand and therefore we raised our quarterly price forecast throughout 2Q, 3Q and 4Q2022 from US1,800 per oz to the new trading range of US$1,900 to US$2,000 per oz,” he adds.
“That view is now outdated. Over the past two weeks, as Russia’s invasion of Ukraine continued, the entire commodities complex has staged an unprecedented rally. Key commodities across the energy, industrial metal, agriculture, grains and bulk complexes have all rallied significantly.
Prior to Russia’s invasion, gold was trading at around US$1,900 per oz.
At this stage, Heng notes that there is elevated uncertainty.
“While unlikely, a sudden ceasefire between Russia and Ukraine could improve sentiments dramatically and trigger a retreat in gold prices. Similarly, a very hawkish outcome at the upcoming March 15 and 16 Federal Open Market Committee (FOMC), may trigger a larger-than-expected rise in rates that will weigh down on gold as well,” he writes.
“Currently, futures have priced in a lower 25 basis point (bps) rate hike from the FOMC, from 50 bps rate hike expectation prior to the onset of war”, he adds.
Photo: Bloomberg
article_here
time of esg taggings 0.0333691812120378
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-expects-singapores-telco-sector-see-15-higher-earnings-fy2022
UOB Kay Hian analysts Chong Lee Len and Chloe Tan have maintained their “market weight” recommendation on the Singapore telco sector as its earnings for the FY2021 and, or 9MFY2022 came within their expectations.
The sector is currently trading at 12.6x EV/EBITDA, 1 standard deviation below its five-year mean EV/EBITDA.
During the period, the sector saw collective earnings growth of 11% y-o-y due to stronger post-paid revenue. The earnings improvement was also attributable to the strong associate contribution from Singapore Telecommunications (Singtel), as well as enterprise growth at Starhub and good cost discipline, write the analysts.
As such, Chong and Tan now expect the sector’s earnings for FY2022 to grow 15% y-o-y to a net profit of $2.25 billion amid high single-digit service revenue growth and Singtel’s associate recovery.
“Stepping into 2022, Singtel remains encouraged by the post-paid trajectory seen in Singapore and Optus while being cautiously optimistic about its associate investments in India, Indonesia and Thailand,” write the analysts in their March 9 report.
“Starhub guided for a robust 10% y-o-y service revenue growth but EBITDA will be adversely impacted by inflationary pressure (higher utility) and upfront investment for IT transformation. Starhub expects margin to recover from 2023 onwards (to at least 23% from 20%),” they add. “Similarly, Netlink expects operational inflationary pressure to materialise in 2022, including higher interest rates in the rising rate environment.”
To the analysts, the sector’s earnings recovery is now more visible, given the “benign competitive landscape” and nationwide 5G rollout, which helps the incumbents maintain their market share.
“Pronounced earnings uplift from the enterprise business may take a longer time to bear fruit as telcos continue to explore new business applications for 5G,” add the analysts.
While Chong and Tan like Singtel and Netlink for their defensiveness, as well as Netlink’s 5% dividend yield, Singtel remains their sector top pick.
The way they see it, Singtel is a proxy to Southeast Asia’s economic reopening. The monetisation of assets to narrow the valuation gap, including setting up a regional data centre and potentially, a regional digital banking outfit in Southeast Asia is also another plus point for the telco.
Chong and Tan have rated Singtel “buy” with a target price of $2.90.
“At our target price, the stock will trade at 14.5x FY2023 EV/EBITDA (slightly above its five-year mean EV/EBITDA). The stock currently trades at -1 standard deviation below its five-year mean EV/EBITDA of 13x,” write the analysts, who deem Singtel being on track to deliver growth for shareholders via its strategic reset.
“[Singtel’s] focus will include: capitalising the digital/IT growth trend via strategic partnerships, leveraging its infrastructure assets (data centres, towers and fibre) to unlock value, sweating its key assets, and investing in 5G for network superiority and future monetisation,” they add. “This is expected to help Singtel bridge the current market valuation gap as a conglomerate.”
Meanwhile, they have given Netlink a “hold” recommendation with a target price of $1.05.
On Netlink, the analysts say they “continue to see the stock as a good shelter amid market volatility given its strong earnings visibility, healthy balance sheet and cautious approach in terms of overseas/domestic acquisitions”.
Key catalysts to Netlink’s share price include growth in demand for non-building address points (NBAP) connections with the rollout of 5G/Smart Nation initiatives, investors seeking defensive yield from Netlink’s resilient, predictable, transparent and regulated cash flow, as well as earnings-accretive mergers and acquisitions (M&As).
At the same time, the analysts have recommended investors look out for key events such as its regulatory review for 2023, expected to be announced by 4QFY2022.
Within the same report, the analysts have given StarHub a “hold” recommendation with a target price of $1.30.
As at 12.23pm, shares in Singtel, Netlink and StarHub are trading at $2.51, 96.5 cents and $1.24 respectively.
Photo: Stock image
article_here
time of esg taggings 0.03319437708705664
https://www.theedgesingapore.com/capital/brokers-calls/turnaround-sight-sembmarine-analysts
The worst is probably over for Sembcorp Marine (SembMarine) as it reported deeper losses for the FY2021 ended December , analysts say.
On Feb 25, SembMarine reported a deeper net loss of $523.3 million for the 2HFY2021, 34.1% higher than the net loss of $390.4 million in the 2HFY2020.
The half-year results brought FY2021’s loss wider to $1.17 billion from FY2020’s loss of $582.5 million.
CGS-CIMB Research analysts Lim Siew Khee and Isabella Tan have maintained their “hold” recommendation with an unchanged target price of 9 cents.
The unchanged target price pegs SembMarine at P/BV of 0.8x for the calendar year (CY) 2022. The valuation represents a 20% discount to its three-year historical average of 1x.
To them, SembMarine’s net loss for the 2HFY2021 stood below their forecast of a $625-million loss.
In their Feb 26 report, Lim and Tan say that this will probably be the last round of major provisions as the gradual reopening of borders means an easing of labour shortage in Singapore. This will, in turn, reduce the cost of bringing in new labour.
Therefore, management does not expect further significant provisions as the current manpower level is sufficient to complete existing projects, say the analysts.
The easing of labour costs may be a key reason behind SembMarine’s guidance of a “significantly better financial performance for FY2022,” write the analysts.
In the FY2022, SembMarine’s prospects look to be shaping up. Year-to-date, the company has delivered three out of 12 projects scheduled for 2022. It is also on track to conclude negotiations on project completion terms with its key customers and is likely to see stronger revenue contribution in 1HFY2022, note the analysts.
“Management sounded positive about some contract wins by 1HFY2022 with contract size on average ranging from $500 million to $1 billion. Some of the contracts underway include the EPC contract for US$2 billion ($2.72 billion) Dorado FPSO and Antarctic support vessel for the Brazilian Navy,” they add. “Rising oil prices [as at Feb 26] could provide impetus for deferred expenditure by oil companies.”
Looking ahead, the analysts see scope “for narrower discount on consistent order win momentum, earnings recovery or clear strategy from enlarged entity with Keppel O&M. The indicative order book for both yards could reach $6.4 billion based on end-2021 reported figures”.
DBS Group Research analyst Ho Pei Hwa has also kept “hold” on SembMarine with a slightly higher target price of 9 cents from 8 cents previously.
The marginal lift in her target price is due to the smaller-than-expected losses in the FY2021, still pegged to 0.7x P/BV or 1.5 standard deviation below its mean valuation since 2014, says Ho in her Feb 28 report.
“We could raise SembMarine’s target valuation multiple on more signs of a firm recovery in orders, operational improvement, and a successful yard merger with synergy creation,” she writes.
As at end-2021, SembMarine reported a net orderbook of $1.1 billion, of which Ho estimates that it secured some $800 million in new orders in 2021.
While the figure is an improvement from the zero orders in 2020, Ho notes that the figure “remains a far cry from [SembMarine’s] breakeven revenue of $2 billion”.
As such, order wins are critical for the company.
To Ho, the pick-up in new orders in the FY2021 are “positive”.
Ho adds that “rising oil prices bode well for capex increase by oil majors, leading to potentially stronger order flows for production facilities. Growing offshore renewable orders is a strategic move for long-term growth”.
The next key event for SembMarine, says Ho, is the proposed merger between the company and Keppel O&M, which is pending details since the signing of a non-binding memorandum of understanding (MOU) in June 2021.
The way Ho sees it, the merger is “a long-term positive for SembMarine, creating revenue and cost synergies. However, in the near term, some uncertainties hover around the valuation of yards and potential integration hiccups.”
That said, key risks include sustained low oil prices, which would affect capex, and new building activities and execution risks in new product types.
UOB Kay Hian analyst Adrian Loh is the only one to keep “buy” on SembMarine. His target price at 11 cents is also the highest amongst the three houses.
The unchanged target price is “based on a target multiple of 0.88x, pegged to our 2022 estimated book value per share of 13 cents. Our target P/B multiple is a 20% discount to the company’s past-five-year average P/B of 1.1x,” writes Loh in his Feb 28 report.
“Note that we had previously applied a 30% discount but we now view a lower discount as more reasonable given the expected turnaround in the company’s fortunes. With its $1.5 billion rights issue completed, and Temasek’s mandatory general offer at 8 cents per share having lapsed in early-November 2021, we believe that much of the corporate-level risk has dissipated,” he adds.
In the same report, Loh has also upped his net profit numbers for FY2022 and FY2023 as he now expects SembMarine to see breakeven due to better guidance from the company.
Unlike the rest of the analysts, however, SembMarine’s results for the FY2021 stood larger than Loh’s expectations. That said, the company’s FY2021 revenue stood “slightly ahead” of Loh’s estimates. Loh also noted that the better sequential performance in the 2HFY2021 was also a positive for SembMarine.
To him, the key highlights from the company’s results were: the promise that 2022 would be “significantly better” than 2021, as well as the solving of the labour issues from the 4QFY2021.
Following the $1.5 billion raised, Loh notes that SembMarine is now in an improved financial position. The proceeds “can be used more ably to execute and complete the projects as well as for working capital needs for new orders and projects,” he says.
On the higher carbon taxes announced during Budget 2022, Loh says that the increase in taxes are unlikely to impact SembMarine in a major way.
“For its offshore marine customers, there may be a significant increase in taxes and thus project economics need to increase to cater for this. On the other hand, we note that renewables projects which have no carbon taxes then become more attractive to SembMarine’s customers,” writes Loh.
To him, catalysts to SembMarine’s share price includes new orders for rigs, offshore renewable installations or fabrication works as well as repairs and upgrades work for cruise ships and other commercial vessels. A merger or joint ventures (JVs) with other shipyards may also contribute to an increase in SembMarine’s share price.
Shares in SembMarine closed 0.2 cent lower or 2.08% down at 9.4 cents on March 8.
Photo: Bloomberg
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time of esg taggings 0.039711687015369534
https://www.theedgesingapore.com/capital/brokers-calls/analysts-capitaland-investment-after-strong-fy2021-results
Analysts from DBS Group Research, UOB Kay Hian and PhillipCapital say they like CapitaLand Investment (CLI) after the real estate investment manager (REIM)’s PATMI of $1.35 billion for the FY2021 ended December surpassed expectations.
DBS analysts Derek Tan and Rachel Tan have kept “buy” on the counter with an unchanged target price of $4, the lowest amongst the three brokerages.
In their report dated Feb 28, the analysts admit that their estimates are more conservative compared to their peers. However, the analysts see CLI as an “asset and capital efficient” company with scalable fee-related earnings (FRE) and fund assets under management (AUM) platforms for growth.
“CLI’s private funds and REITs complement each other in terms of acquisition strategy. With diverse real estate strategies ranging from opportunistic, value-add to core investments, we see CLI leveraging on opportunities during market upcycles and downcycles. Its REITs and private funds can be active across all real estate cycles,” write the analysts.
The recovery of CLI’s lodging business, Ascott Limited, is also underway, note the analysts.
During the year, Ascott Limited achieved a new milestone with a 10% rise in operational units to 77,000 units, with 56,000 units in the pipeline.
“With 15,000 units secured in 2021 and a pipeline of over 8,200 units, Ascott is on track to hit its target of 160,000 units by 2023,” write the analysts.
In FY2021, Ascott’s portfolio revenue per average room (RevPAR) recovered +19% y-o-y to $78/night with most markets reporting an improvement y-o-y as border restrictions relaxed, they add, noting that the outlook remains robust on the back of the easing of border restrictions.
To the analysts, catalysts to CLI’s share price are: the launch of new fund products and REIT acquisitions with an aim to grow funds under management (FUM) to $100 billion by 2024; as well as a rebound in operational performance for its lodging business.
“These are expected to drive [a] three-year net profit compound annual growth rate (CAGR) by 12% during FY2021-FY2024,” they write.
UOB Kay Hian analyst Adrian Loh has also kept “buy” on CLI with a higher target price of $4.13 from $4.02 previously.
He has also upgraded his earnings estimates for the FY2022 and FY2023 by 5% and 8% respectively to account for a slightly faster recovery in CLI’s lodging segment. The higher earnings estimates will also account for slightly better margins in its fund management business, says Loh in his Feb 28 report.
“We value CLI at $4.13/share (previously $4.02) using a sum of the parts (SOTP) methodology which comprises of: its fee-income platform where CLI earns fees from its investment management, property management and lodging management platforms; and its investment properties which CLI accounts for on its own balance sheet, as well as its various stakes in its listed REITs and its various stakes in its unlisted funds,” writes the UOB Kay Hian analyst.
Following CLI’s strong set of numbers in its maiden results, Loh expects the REIM to “continue to witness strong growth in its funds under management as well as fee income-related businesses”.
“Importantly, we expect lodging to drive earnings growth in the near term,” he adds.
Finally, PhillipCapital analyst Natalie Ong has maintained her “accumulate” recommendation on CLI. In her report on March 8, Ong has also upgraded her target price estimate to $4.05 from $4 previously.
The higher target price comes as Ong lifts her investment management PATMI estimates for the FY2022 to factor in growth in CLI’s FUM as well as higher EBITDA in its lodging segment.
“At current growth rates, CLI is on track to hitting its 2023 lodging target of 160,000 keys under management and [its] $100 billion 2024 FUM target. This will increase the proportion of fee-related earnings for CLI, which currently account for 40% of operating PATMI,” writes Ong.
She adds that as the REIM pushes to grow its private equity (PE) FUM, new funds will “adopt a traditional PE fee structure which includes an ongoing management fee based on committed capital as well as carry fees which are tied to the performance of the fund manager”.
“As CLI’s private fund business is less established compared to its track record as a manager of listed funds, CLI is prepared to take up to a 20% stake in newly incepted private funds as a show of confidence and alignment of interest with its third-party equity providers,” notes Ong.
Shares in CLI closed 1 cent higher or 0.27% up at $3.67 on March 8.
Photo: CLI
article_here
time of esg taggings 0.0641938850749284
https://www.theedgesingapore.com/news/singapore-economy/singapores-january-retail-sales-118-y-o-y-beating-market-estimates
For the month of January 2022, Singapore’s total retail sales value grew by 11.8% y-o-y to $4.2 billion, beating the market estimate of a 7.2% y-o-y growth.
The improvement in January’s retail sales performance was attributable to the increased spending before the Chinese New Year period, which took place in early February. In 2021, pre-Chinese New Year spending took place mostly in February due to the festive season being in mid-February at the time.
The pent-up demand in line with Singapore’s tighter labour market, as well as the low-base seen in January 2021 are also likely contributors to the demand in retail sales, says UOB economist Barnabas Gan.
article_here
time of esg taggings 0.024962410097941756
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-upgrades-singpost-buy-robust-3qfy2022
UOB Kay Hian analyst Llelleythan Tan has upgraded Singapore Post (SingPost) to “buy” from “hold” after the postal company reported robust results for the 3QFY2021 ended December .
On Feb 25, SingPost saw an operating profit of $38 million for the 3QFY2021 driven by e-commerce. According to Tan, the results stood in line with his expectations.
To that end, Tan has upped his target price on SingPost to 78 cents from 75 cents previously, which values the mail business at an FY2022 P/E of 12x (from 10x previously). The new target price also values SingPost’s logistics business at an FY2022 EV/EBITDA of 8.0x, in line with the peer average; and property at a cap rate of 5%.
article_here
time of esg taggings 0.025448789121583104
https://www.theedgesingapore.com/news/brokers-calls/bumitama-agri-gets-buy-calls-earnings-expected-remain-robust-fy22
Expecting earnings to remain robust in FY22, analysts at RHB Group Research and UOB Kay Hian Research have upgraded and kept their “buy” calls for Bumitama Agri (BAL) with higher target prices of 90 cents and 85 cents respectively.
With recent crude palm oil (CPO) prices continuing to spike, UOB KH analysts Leow Huey Chuen and Jacquelyn Yow Hui Li expect BAL to continue benefiting with the current Indonesia tender price hovering around INR17,000 per kg.
Meanwhile, RHB analysts note that BAL managed to achieve a higher average selling price of INR13,500 per kg in 4Q — a 55% increase y-o-y — resulting in a realised selling price of INR9,852 for FY21. For FY22, it has some minimal forward sales locked in a year ago which have yet to be realised, but the amount is insignificant.
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time of esg taggings 0.03666369407437742
https://www.theedgesingapore.com/news/russia-ukraine-crisis/dbs-ocbc-uob-halt-russia-commodities-lending-cut-risks
Singapore’s biggest banks are restricting trade financing for Russian raw materials, as the war in Ukraine spurs lenders in Asia’s largest energy and commodities trading hub to reduce exposure to the sanction-hit country.
The limits include a halt on issuing so-called letters of credit in US dollars for trades involving Russian commodities, including oil and liquefied natural gas, according to people familiar with the situation.
DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. have stopped issuing letters of credit involving Russian energy deals because of uncertainty over the course of sanctions, according to the people, who asked not to be identified as the information isn’t public. OCBC’s restrictions cover all commodities, one of the people said.
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time of esg taggings 0.06881543691270053
https://www.theedgesingapore.com/news/sustainability/smes-want-sustainability-information-and-training-fear-cost-increases-uob
Insufficient knowledge about sustainability, lack of training opportunities and fears of cost increases are some of the concerns raised by SMEs here as they adapt to the green economy.
That said, three in five SMEs in Singapore believe in the importance of incorporating sustainable practices in their businesses.
According to the UOB SME Outlook Study 2022, SMEs believe focusing on sustainability will help improve the company’s reputation (54%), make it easier for them to work with multinational corporations that care about their sustainability goals (45%) and enable them to help build an environmentally- and socially-responsible Singapore (44%).
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time of esg taggings 0.030094741843640804
https://www.theedgesingapore.com/capital/brokers-calls/uob-remains-overweight-hospitality-s-reits-recommends-buy-art-cdlht-feht
UOB Kay Hian Research analyst Jonathan Koh maintains an ‘overweight’ rating, with recommendations to “buy” Ascott Residence Trust (ART), CDL Hospitality Trust (CDLHT) and Far East Hospitality Trust (FEHT).
He has given them target prices of $1.29, $1.45 and 76 cents respectively.
“We have weathered the Covid-19 pandemic for two years already. During this time, the speed of detecting new variants has accelerated, and effective vaccines and anti-viral drugs, such as Pfizer Paxlovid have been developed,” says Koh in his Feb 22 report. “Bookings for hotels and serviced residences are expected to pick up as the overcast from the Omicron variant fades as well.”
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time of esg taggings 0.02459540916606784
https://www.theedgesingapore.com/news/sustainability/91-stake-sunseap-edpr-establish-apac-hq-singapore-10-bil-investment
EDP Renewables (EDPR) has completed an agreement with Singapore solar energy company Sunseap to establish its Asia Pacific headquarters in Singapore.
The company announced last November that it had acquired a 91% stake in Sunseap, the largest distributed solar player and fourth largest solar player in Southeast Asia.
Following the close of its $1.1 billion deal with Sunseap on Feb 24, EDPR now plans to invest up to $10 billion into Sunseap by 2030 to create an industry-leading clean energy hub for the region out of Singapore.
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https://www.theedgesingapore.com/capital/brokers-calls/mct-benefit-development-greater-southern-waterfront-uob-kay-hian
With five properties located in the Harbourfront area including VivoCity, Mapletree Commercial Trust (MCT) is set to benefit from the development of the Greater Southern Waterfront and the rejuvenation of Sentosa Island and Pulau Brani, says UOB Kay Hian analyst Jonathan Koh in his Feb 18 report.
Another re-rating catalyst for the REIT’s share price would be the distribution per unit (DPU) and net asset value (NAV) accretion from the merger with Mapletree North Asia Commercial Trust ( MNACT ), Koh adds.
MCT and MNACT, on Dec 31, 2021 , announced their proposed merger to form a new flagship commercial REIT named Mapletree Pan Asia Commercial Trust (MPACT).
In his report, Koh writes that investors are “overly worried” about MNACT’s anchor asset Festival Walk in Hong Kong, with an “overly pessimistic view” on Festival Walk’s outlook.
See: Reality check: questions posed by SIAS to MNACT and MCT managers and Analysts see strategic positives from MCT and MNACT merger
While the mall experienced mishaps in the form of the Hong Kong protests in November 2019 and the Covid-19 pandemic in 2020 and 2021, Koh sees the current weakness as “an opportune timing” to acquire the property.
To this end, Koh believes Festival Walk has started to experience a turnaround after two straight years of negative rental reversion.
Furthermore, domestic consumption in Hong Kong has begun to normalise and the reopening of Hong Kong’s border with mainland China is imminent, notes Koh.
In addition, Festival Walk, which has only 25 years left on its land-use right, will be extended by 50 years upon its expiry on June 30, 2047.
“Articles 120-123 of Basic Law provide the legal basis for renewal of land leases in Hong Kong. Based on a policy statement announced in Jul 1997, new leases of land would be granted a term of 50 years subject to payment of annual land rent equivalent to 3% of the annual rent value of the property,” writes Koh.
“There are many precedents for extension of land leases, the most notable being the extension of land lease for Pok Fu Lam Gardens by 50 years until 2056 in mid-2006. Under the current land lease extension policy, leasees need to apply for “conditions of regrant” two years before the expiry of land leases,” he adds.
The way Koh sees it, MNACT unitholders may vote against the merger with MCT.
“There is a new air of activism in the Singapore stock market. Proxy advisors Institutional Shareholder Services and Glass Lewis have questioned the deal process and unfavourable offer and have advised unitholders to vote against the merger between ESR REIT and ARA LOGOS Logistics Trust,” writes Koh.
“Similarly, activist fund manager Quarz Capital has also complained about the unattractive offer from MCT, which undervalues MNACT at a discount to NAV per unit of $1.27. If the deal is aborted, MCT’s unit price could recover back above $2.00,” he adds.
Koh has kept his DPU forecast for MCT on a standalone basis.
MCT’s unit price has corrected 9% since the proposed merger, whereas MNACT’s unit price has dropped by a smaller 1.8%.
On a relative basis, MCT has underperformed by 5.5%, while MNACT has outperformed by 1.7% relative to the FTSE all-share S-REIT index, says Koh.
He has kept “buy” on MCT with a target price of $2.48.
In their reports on Jan 27, analysts from Maybank Securities and OCBC Investment Research have also kept “buy”.
Maybank analyst Chua Su Tye has kept his target price unchanged at $2.35, as he expects MCT’s recovery to gain transaction in the coming quarters.
MCT, on Jan 26 , r eported gross revenue of $374.0 million for the 9MFY2021 ended December, up 7.3% y-o-y. Its net property income (NPI) for the same period was up by 5.6% y-o-y to $291.3 million.
To Chua, the REIT’s results were “operationally in line” with his estimates.
Noting that valuations have pulled back since the announcement of its proposed merger with MNACT, Chua says he continues to see “clear strategic merits of the deal” beyond the strong financial accretion.
“While MCT’s $1.8 billion debt headroom (at 45% limit) offers deal options, we see accelerated growth from a higher $3.8 billion debt capacity and $1.7 billion asset enhancement initiatives (AEI)/ development headroom, upon a successful MNACT merger, as we expect the larger MPACT to embark on more sizeable office acquisitions with its enlarged Pan Asian mandate,” writes Chua.
He adds that he expects MCT’s DPUs to recover in FY2022, following the decline in FY2020/2021 with the capital retention helped by the MBC II deal.
“Rental reversion should decelerate from strong double-digits to 1.5-2% in FY2021 to FY2022 as VivoCity rents catch up with the market. [MCT’s] rents at business park assets [are estimated to] grow at 2% to 3% per annum (p.a.) due to limited supply, and firm demand,” he says.
Upside to MCT’s share price includes an earlier-than-expected pick-up in leasing demand for retail, office and business park space, better-than-expected rental reversions, as well as accretive acquisitions or redevelopment projects.
Meanwhile, downsides include an extended slowdown in economic activity, which could reduce demand for retail, office and business park space resulting in lower occupancy and rental rates. The termination of long-term leases, which may contribute to a weaker portfolio tenant retention rate, and a sharper-than-expected rise in interest rates that could increase the cost of debt, are also downsides.
The research team at OCBC Investment Research (OIR) has lowered its fair value estimate to $2.04 from $2.14.
“Given that MCT’s share price has already declined 8% (as at the close on Jan 26) since it announced its proposed merger with MNACT, we see a more favourable entry point even with our reduced fair value,” writes the team, who sees signs of recovery.
“[We] believe MCT’s strong parentage and healthy balance sheet will allow it to tide over near-term uncertainties, while its strong management team and portfolio are well positioned over the longer-term,” add the team of analysts.
The team had also adjusted its cost of equity (COE) assumption upwards to 6.6% from 6.4% on account of the REIT’s potential into higher risk markets such as China and Hong Kong should its merger with MNACT go through. However, it believes that “this would be partially offset by the strategic benefits of having a larger scale, better trading liquidity and potential increase in its constituent index weight”.
MCT may offer investors a unique exposure to the retail, office and business park sub-sectors in Singapore, this could potentially change given the proposed joint merger with MNACT.
“If successful, the merged entity would become one of the largest REITs by market capitalisation listed in Asia, with a significantly larger scale and platform which is better positioned to unlock upside potential. That said, we believe MCT would gain new exposure to riskier markets and see dilution of its pure-play Singapore status,” writes the team.
Units in MCT closed 1 cent lower or 0.54% down at $1.85, or an FY2022 P/B of 1.1 times and dividend yield of 5.1%, according to OCBC’s estimates.
Photo: MCT
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time of esg taggings 0.039786087116226554
https://www.theedgesingapore.com/capital/brokers-calls/analysts-buoyant-gentings-prospects-gradual-reopening-after-fy2021-dividend
Analysts from DBS Group Research, UOB Kay Hian and RHB Group Research are remaining buoyant on Genting Singapore’s prospects as Singapore gradually reopens its borders. Their optimism also comes despite the group’s 4QFY2021 results and dividend for the FY2021 coming in below expectations.
Maybank Securities is the only house to remain neutral on the counter.
DBS analyst Jason Sum has kept “buy” on the counter with an unchanged target price of $1.
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time of esg taggings 0.025919645093381405
https://www.theedgesingapore.com/news/banking-finance/uobs-sydney-branch-prices-a900-mil-worth-notes-coupon-072-pa
The Sydney branch of UOB has announced its intention to price A$900 million ($870.1 million) of floating rate notes on Feb 18. The transaction is the l argest single issuance for UOB and the largest for a Southeast Asian issuer.
The Australian dollar-denominated notes will be issued under the US$15 billion ($20.15 billion) global medium term note (GMTN) programme.
“Since October 2020, we have been pre-financing actively in the market ahead of macroeconomic and structural headwinds. Together with the latest print of A$900 million, we have achieved a total issuance volume of A$3.6 billion during this period. We are thankful for the strong support and repeated demand across both domestic and regional investors," says Koh Chin Chin, head of group central treasury unit at UOB.
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time of esg taggings 0.036277208011597395
https://www.theedgesingapore.com/capital/brokers-calls/analysts-positive-uob-seeing-strong-fy2021-results
Analysts remain positive on United Overseas Bank (UOB), as the bank’s net profit of $1.02 billion for the 4QFY2021 ended December came in slightly above consensus’ expectations of $998 million.
In an unrated report dated Feb 17, UOB Kay Hian analyst Jonathan Koh notes that the worst could be behind the bank amid a stabilising operating environment.
“Management sees improvement in consumer sentiment in Singapore. There are green shots of recovery and significant upside in the Asean region, although the pace of recovery may vary by country. There is sizeable flow of foreign direct investments (FDI) into Asean,” he writes.
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time of esg taggings 0.04393749916926026
https://www.theedgesingapore.com/capital/brokers-calls/jem-acquisition-enhances-portfolio-resilience-say-analysts
Analysts from CGS-CIMB Research and UOB Kay Hian agree that the acquisition of the remaining stake in Jem by Lendlease Global Commercial REIT (LREIT) is positive on all counts.
See: Jem acquisition adds income stability, defensiveness to LREIT
CGS-CIMB’s Eing Kar Mei and Lock Mun Yee have reiterated their “add” call as they see the accretive acquisition to enhance LREIT’s income stability through the diversification and higher exposure to the suburban retail sector.
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time of esg taggings 0.044620706932619214
https://www.theedgesingapore.com/capital/results/uobs-2hfy2021-earnings-rise-52-y-o-y-206-bil-declares-final-dividend-60-cents
United Overseas Bank (UOB) has posted earnings of $2.06 billion for the 2HFY2021 ended December, 52% higher than earnings of $1.36 billion from the same period a year ago.
Earnings for the 4QFY2021 stood at $1.02 billion, up 48% y-o-y and down 3% q-o-q alongside a seasonally soft quarter.
For the 2HFY2021, the earnings growth was driven by a strong performance across the bank’s business and geographies, along with lower credit costs.
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time of esg taggings 0.0286520691588521
https://www.theedgesingapore.com/capital/brokers-calls/uob-kh-sees-dcr-expanding-footprint-europe-and-apac-ups-target-price
UOB Kay Hian’s Jonathan Koh has raised his target price on Digital Core REIT (DCR) from US$1.18 to US$1.32 and maintained his “buy” call on the stock.
In a Feb 14 report, Koh says he expects DCR to explore the acquisition of data centres in the Asia Pacific region, namely, in Singapore and Australia, as well as Europe, in countries like France, Germany, the Netherlands and the UK.
These acquisitions will be from its sponsor pipeline from sponsor Digital Realty, which is the largest global provider of cloud- and carrier-neutral data centres, colocation and interconnection solutions.
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time of esg taggings 0.02434777794405818
https://www.theedgesingapore.com/capital/brokers-calls/coming-soon-mm2-asia-hollywood-blockbusters-nfts-and-full-recovery-fy2024-uob
Film production company and cinema operator mm2 Asia is reaching an inflection point with strong recovery ahead, writes UOB Kay Hian Research, which is keeping a “buy” call but with a higher target price of 11.5 cents, from 9.5 cents previously.
In a Feb 14 note, analysts at the brokerage expect earnings to post a sharp recovery from FY2022 onwards, driven by all three segments.
“Cinema attendance is expected to recover as the majority of Singapore’s and Malaysia’s populations are vaccinated, a robust pipeline of core production business of $150 million to $190 million in the next two to three years, and resumption of in-person concerts,” the analysts write.
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time of esg taggings 0.02516549895517528
https://www.theedgesingapore.com/capital/manufacturing/uobkh-keeps-earnings-estimates-venture-corporation-it-expects-its-4q-earnings
UOB Kay Hian’s John Cheong has maintained his “buy” call and target price of $22.04 on Venture Corp, expecting the contract manufacturer’s 4QFY2021 earnings (ended 31 Dec) to come in at $79.5 million, versus consensus estimates of $91.4 million
In a Feb 11 report, Cheong points out that five out of ten of Venture’s customers have reported healthy revenue growth. They include Broadcomm, NCR, Thermo Fisher, Fortive and Waters.
More importantly, Cheong says all five customers are guiding for revenue growth for 2022. This trend is consistent with Venture’s latest outlook statement which highlighted that its customers’ demand outlook continues to be healthy and broad-based. (see chart below)
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time of esg taggings 0.03303395095281303
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-initiates-buy-capitaland-investment-tp-402
UOB Kay Hian has initiated coverage on CapitaLand Investment (CLI) with a “buy” recommendation and target price of $4.02.
The estimated target price includes CLI’s fee-income platform, which comprises its investment management (IM), property management (PM) and lodging management (LM) platforms. It also includes CLI’s investment properties, which the group accounts for on its balance sheet, as well as its various stakes in its listed REITs and unlisted funds, says analyst Adrian Loh.
“Compared with its regional and global peers, CLI’s valuations appear inexpensive with 2022 price-to-net asset value (P/NAV) and EV/EBITDA at 1.4 times and 21.1 times respectively,” he writes in a Feb 9 report.
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time of esg taggings 0.02493512607179582
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-remains-positive-dbs-and-ocbc-ahead-4qfy2022-results
UOB Kay Hian analyst Jonathan Koh is keeping his “overweight” call on the Singapore banking sector, as he sees all three banks as being the prime beneficiaries of higher interest rates.
Ahead of the banks’ results for the 4QFY2021 and FY2021, Koh predicts a lull in all three banks’ results, as is typically seen during the quarter.
DBS Group Holdings is slated to release its results on Feb 14, while UOB and OCBC are scheduled to release their results on Feb 16 and Feb 23 respectively.
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time of esg taggings 0.061035261023789644
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-lowers-thaibevs-target-price-85-cents-lower-valuation-its-beer
UOB Kay Hian analyst Llelleythan Tan has kept “buy” on Thai Beverage (ThaiBev) as he sees better days ahead for the group.
On Feb 1, Thailand reopened its international borders to fully-vaccinated travellers amid the falling number of Covid-19 cases, after suspending its initial quarantine-free visa programme in December for seven weeks.
“Fully-vaccinated international travellers are now able to enter Thailand quarantine-free upon a negative pre-departure/on-arrival PCR swab test and another PCR test on the fifth day of travel. Also, the ‘Sandbox’ programme has now been extended to include the popular beach destinations of Pattaya and Koh Chang,” writes Tan.
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time of esg taggings 0.024371067062020302
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-adds-aztech-alpha-picks-it-deems-stock-oversold-cuts-loss
UOB Kay Hian has added Aztech to its alpha picks portfolio for February as the Singapore research team believes the counter has been oversold.
“We add Aztech as we believe its share price correction presents a good buying opportunity given that it has a strong orderbook and operations remain intact,” writes the team in its Feb 3 report.
In addition, Aztech’s upcoming results for the FY2021 ended Dec 31, 2021, are expected to be robust, and its current share buyback mandate should support its share price. The company will post its results after market closes on Feb 22.
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time of esg taggings 0.025009575998410583
https://www.theedgesingapore.com/capital/offshore-marine/yangzijiang-keppel-corp-and-sembmarine-uob-kay-hians-top-picks-overweight-om
UOB Kay Hian analyst Adrian Loh has maintained “overweight” on the offshore and marine (O&M) sector as he sees the sector moving “onwards and upwards”.
“The rig market appears to have turned a corner in 2021 with oil prices exceeding US$80 ($107.50) per barrel – this has resulted in stronger rig utilisation rates and a firming of rig dayrates vs 2020,” writes Loh in his Jan 14 report.
“The higher offshore activity expected in 2022 and 2023 underpins our positive view on the sector, especially given that meaningful rig supply was removed globally,” he adds.
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time of esg taggings 0.027078508865088224
https://www.theedgesingapore.com/news/company-news/uob-injects-rmb2-bil-its-china-subsidiary
United Overseas Bank (UOB) has completed a capital injection of RMB2 billion ($425 million) to its subsidiary in China to strengthen its connectivity, progressive solutions and sustainability capabilities.
This is UOB’s second capital injection to UOB China, following the increase in the bank’s registered capital from RMB3 billion to RMB5.5 billion in 2015.
UOB China has maintained robust compound annual revenue growth of 13% since its inception in 2008. Its net profit before tax hit a record high in 2021, more than double that in 2018, the company said in a statement.
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time of esg taggings 0.03685318911448121
https://www.theedgesingapore.com/capital/brokers-calls/uob-kh-lowers-target-price-nanofilm-it-foresees-higher-expenditures
UOB Kay Hian has maintained its “buy” call on Nanofilm, but with a lowered target price of $2.67 from $3.90 previously.
The brokerage says it expects Nanofilm to deliver earnings of $47 million for its 2HFY2021 ended Dec 31, 2021 - vs $18 million in 1HFY2021 with the easing of supply chain issues and seasonally stronger demand.
Citing Nanofilm’s Dec 2021 update statement, UOBKH notes that the company's advanced material business unit (AMBU) has seen a rebound for its consumer electronics, communication and computers (3C) sub-segment, following the commencement of its peak period in 4QFY2021.
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time of esg taggings 0.02735292282886803
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-maintains-wilmars-tp-6-ahead-fy2021-earnings
UOB Kay Hian analysts Leow Huey Chuen and Jacquelyn Yow have kept “buy” on Wilmar International ahead of the agri-giant’s results for the 2HFY2021 and FY2021 ended Dec 31, 2021, with a target price maintained at $6.
For the 4QFY2021, Leow and Yow say they estimate Wilmar to report a core net profit of US$380 million to US$400 million ($512.5 million to $539.5 million), driven by strong performances from Wilmar’s palm and sugar operations, offsetting the weaker contribution from China.
“The plantation and sugar milling division, which is the upstream operation for Wilmar, is expected to see significant earnings increase y-o-y and h-o-h in 2HFY2022,” write the analysts in a Jan 19 report. The analysts have also noted that while the division contributed about 13% of Wilmar’s 1HFY2021 profit before tax (PBT), it is expected to increase to 22%-25% of 2HFY2021 PBT on the back of strong selling prices.
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time of esg taggings 0.03407493489794433
https://www.theedgesingapore.com/news/finance/integration-key-uob-citi-transaction
United Overseas Bank (UOB) acquired four of Citigroup’s 13 Asia-Pacific businesses it had put up for sale — Malaysia, Thailand, Indonesia and Vietnam. The cost of $4.9 billion was a reasonable 1.2 times the net asset value of the businesses, compared to previous acquisitions made by the local banks. Including the $700 million in integration and other costs such as stamp duty, integration of IT systems and branding, and spread over two years, the total cost could work out at 1.32 times its net asset value. CLSA says that is not cheap.
Most recently, DBS Group Holdings had acquired a 13% stake in Shenzhen Rural Commercial Bank for $1.079 billion or 1.01 times book. In 2014, Oversea-Chinese Banking Corp (OCBC) acquired Wing Hang Bank for US$4.997 billion or 1.8 times book. Back in 2001, DBS acquired Dao Heng Bank for $10 billion or three times book while UOB acquired Overseas Union Bank also in 2001, at 1.9 times book or $10 billion. The OUB acquisition was a share and cash transaction. In 2004, UOB acquired 80% of Bank of Asia from ABN AMRO for around THB22,019 million or $935 million at the time or 1.87 times net asset value.
“A bit disappointing, as credit cards, which is a form of unsecured lending, make up 70% of the asset mix of the book. This means mortgages, consumer loans, auto financing and others make up a small proportion. While credit cards are a high margin business, in our view, it is not that sticky and also prone to attrition over the next three to five years from growing e-payment adoption,” CLSA says.
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time of esg taggings 0.027623231057077646
https://www.theedgesingapore.com/capital/brokers-calls/uob-kh-lifts-sgxs-tp-974-projected-y-o-y-growth-most-segments
UOB Kay Hian analyst Llelleythan Tan has kept his “hold” recommendation on Singapore Exchange (SGX) before the exchange releases its 1HFY2022 results on Feb 4.
In his report dated Jan 18, Tan has, however, lifted SGX’s target price to $9.74 from $9.41 previously.
The higher target price is pegged to a price-to-earnings (P/E) multiple of 23.8 times FY2022 earnings, and +1 standard deviation of SGX’s historical forward P/E.
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time of esg taggings 0.02393137291073799
https://www.theedgesingapore.com/capital/singapore-economy/singapores-nodx-expands-184-dec-economists-say-momentum-could-slow-down
Singapore’s non-oil domestic exports (NODX) continued its growth trend for the thirteenth consecutive month in December, thanks to broad-based growth across the segments.
Official figures released by trade agency Enterprise Singapore (ESG) on Jan 17 indicated an 18.4% y-o-y expansion in NODX for the last month of 2021. This is a slight easing from the 24.2% y-o-y growth rate seen in the month before.
Even so, December’s showing is stronger than the 12.9% growth rate penciled by private-sector economists in a Bloomberg poll.
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https://www.theedgesingapore.com/capital/brokers-calls/uobs-acquisition-citi-assets-checks-all-right-boxes-analysts-reiterate-buy
Analysts have nothing but praise for United Overseas Bank ’s (UOB) near $5 billion acquisition of Citi’s consumer business in Indonesia, Malaysia, Thailand and Vietnam, announced Jan 14.
See: UOB to acquire Citi's consumer business in Indonesia, Malaysia, Thailand, Vietnam for $5 billion
See also: The market likes UOB's acquisition of Citi's consumer banking business
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time of esg taggings 0.024522389052435756
https://www.theedgesingapore.com/capital/banking-finance/market-likes-uobs-acquisition-citis-consumer-banking-business
United Overseas Bank announced it has entered into agreements to acquire Citigroup ’s consumer banking businesses comprising its unsecured and secured lending portfolios, wealth management and retail deposit businesses in Indonesia, Malaysia, Thailand and Vietnam.
The acquisition, which is based on the $4.5 billion net asset value of the to be acquired businesses, plus $915 million, will be financed by excess capital. The cost of funding the acquisition will reduce UOB’s CET1 ratio by 70 basis points (bps) to 12.8%, based on its CET1 of 13.5% as at Sept 30, 2021. OCBC Credit Research calculates that UOB will have still have a capital buffer of $11 billion against the regulatory minimum requirement.
The cost of acquisition represents 1.2 times the book value of Citi’s consumer business. In terms of price to be paid, this compares - favourably for want of a better word - against the $10 billion, or 3 times book DBS Group Holdings paid for Dao Heng Bank more than 20 years ago, and the US$4.97 billion, or 1.8 times book paid by Oversea-Chinese Banking Corp for Wing Hang Bank. In 2001, UOB paid around $10 billion or 1.9 times net asset value in a share and cash transaction for Overseas Union Bank. More recently, in April 2021, DBS acquired a13% stake in Shenzhen Rural Commercial Bank Corporation (SZRCB) for RMB 5,286 million, the equivalent of $1,079 million, and at 1.01 times book.
article_here
time of esg taggings 0.050422593019902706
https://www.theedgesingapore.com/capital/brokers-calls/10-share-price-growth-over-two-weeks-ocbc-positive-uobs-acquisition-citi
OCBC Investment Research welcomes United Overseas Bank ’s acquisition of Citi’s consumer business in Indonesia, Malaysia, Thailand and Vietnam, announced Jan 14.
The proposed acquisition, which will cost UOB nearly $5 billion, is said to further strengthen and deepen UOB’s Asean franchise. The transaction should be completed between mid-2022 and early 2024.
“Post-acquisition, the bank expects an immediate $1 billion in incremental annual income uplift and asset growth through the expanded franchise,” writes OCBC Investment Research in a Jan 14 note. “Its proforma 1HFY2021 geographical loan mix is expected to remain largely unchanged in terms of regional distribution post transaction, with Singapore anchoring the majority of group loans.”
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time of esg taggings 0.02544029406271875
https://www.theedgesingapore.com/news/ma/uob-acquire-citis-consumer-business-indonesia-malaysia-thailand-vietnam-5-billion
UOB Group announced, on Jan 14, that it is acquiring Citi’s consumer business in Indonesia, Malaysia, Thailand and Vietnam. The proposed acquisition, which will cost UOB nearly $5 billion, is said to further strengthen and deepen UOB’s Asean franchise.
On Sept 27, 2021, UOB was reported to be among one of the potential bidders for Citi's consumer assets in Malaysia.
In December 2021, UOB and Standard Chartered were said to be among Citi's preferred bidder for its consumer assets.
article_here
time of esg taggings 0.024720265995711088
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-econ-healthcare-ihh-healthcare-uob-food-empire-netlink-nbn
Econ Healthcare Price target: DBS Group Research “hold” 28 cents
Review on investment strategy
In his Jan 13 note, DBS Group Research analyst Paul Yong has kept his “hold” call on Econ Healthcare (Asia) and 28 cents price target, after the nursing home operator sold all its shares in Hong Kong-listed Crosstec Group Holdings and will book a loss of $3.4 million.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/maintain-overweight-s-reits-even-though-recovery-delayed
UOB Kay Hian analyst Jonathan Koh has maintained that investors should “overweight” their portfolios on S-REITs, with his top picks coming from the hospitality sector.
He has given “buy” ratings to Ascott Residence Trust, CDL Hospitality Trust, and Far East Hospitality Trust, with target prices of $1.29, $1.42 and 74 cents respectively.
In a Jan 6 report, Koh is of the view that the sector’s recovery is  “delayed but not disrupted”.
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time of esg taggings 0.021820195019245148
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-estimates-robust-143-y-o-y-growth-comfortdelgros-earnings
UOB Kay Hian analyst Llelleythan Tan has maintained a “buy” rating on ComfortDelGro (CDG) with a lowered target price of $1.90 from $1.99.
The new target price is pegged to a lower FY2022 price-to-earnings ratio (P/E) of 18.2 times from 19.2 times previously. It is also tied to +1 standard deviation of CDG’s average five-year mean instead of the previous seven-year average.
In FY2021, Tan says he expects a robust 143% y-o-y growth in net profit, coming off a low base in 2020. “Looking forward, an expected recovery in ridership levels and new contract wins would boost 2022 earnings,” Tan adds.
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time of esg taggings 0.025117848068475723
https://www.theedgesingapore.com/capital/brokers-calls/buy-uob-possible-broad-based-growth-fy2022-rhb
The Singapore research team at RHB Group Research has kept “buy” on United Overseas Bank (UOB) with a target price of $33.50.
The target price is based on an intrinsic value of $31 based on a Gordon Growth Model (GGM)-derived price-to-book (P/BV) of 1.2 times, near +1 standard deviation from the historical mean.
In its report on Jan 7, RHB says it remains “upbeat” on the bank’s prospects in FY2022 despite likely softness in the near-term on the back of the Omicron variant.
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time of esg taggings 0.03423751494847238
https://www.theedgesingapore.com/capital/brokers-calls/aztechs-share-price-correction-overdone-dip-good-buying-opportunity-uobkh
UOB Kay Hian analysts John Cheong and Clement Ho have maintained their “buy” call on Aztech Global, but with a lowered target price of $1.55 from $1.70 previously.
The lower target price is pegged to an unchanged FY2022 earnings of 13.3 times, which is still pegged to Aztech’s Singapore peers’ average, write the analysts in a Jan 10 report.
“We continue to like Aztech as the proxy to high-growth IoT products, where we believe orders are just starting to ramp up in 2021 and would sustain into 2022,” they add.
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time of esg taggings 0.02441305387765169
https://www.theedgesingapore.com/capital/brokers-calls/be-heightened-alert-higher-interest-rates-uob-kay-hian
Be on heightened alert for higher interest rates, says UOB Kay Hian Research analyst Jonathan Koh, recommending “overweight” on the Singapore banking sector.
Interest rates would be on an upcycle after quantitative easing (QE) taper is completed by March 2022, he adds.
“Our analysis indicates that every 100bp rise in 3M SIBOR results in net interest margin (NIM) expansion of 25bp for DBS, 13bp for OCBC and 16bp for UOB,” writes Koh.
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time of esg taggings 0.02465862804092467
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-upgrades-cdlht-buy-higher-tp-142
UOB Kay Hian has upgraded its recommendation on CDL Hospitality Trusts (CDLHT) to “buy” with a higher target price of $1.42 from $1.24 previously.
The higher target price is based on a dividend discount model (DDM), where the cost of equity makes up 6.5% and terminal growth makes up 1.8%, says analyst Jonathan Koh in a Jan 4 report.
“CDREIT trades at price-to-net asset value (P/NAV) of 0.93 times, which is 0.3 standard deviation (s.d.) below long-term mean,” he adds.
article_here
time of esg taggings 0.024461779976263642
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-adds-ocbc-its-alpha-picks-drops-thai-beverage
UOB Kay Hian Research has added OCBC Bank to its alpha picks portfolio for the month of January.
The move comes after the team’s portfolio saw a flat month in December, which stood 0.2% higher month-on-month (m-o-m), compared to the benchmark Straits Times Index’s (STI), which grew 2.7% m-o-m.
“Our portfolio was hurt in December 2021 by the lack of financial sector exposure which rose by an aggregate 2.5% m-o-m,” writes the team in a Jan 3 report.
article_here
time of esg taggings 0.024758853018283844
https://www.theedgesingapore.com/capital/brokers-calls/even-conservative-analysts-lift-sembcorps-tp-after-strong-2h21-results-escape
After Sembcorp Industries’ 2HFY2021 core profit beat expectations, CGS-CIMB Research analysts Lim Siew Khee and Izabella Tan are “giving credit where credit is due”.
Sembcorp Industries has reported earnings of $233 million for 2HFY2021 ended December 2021, from a loss of $866 million in the year earlier period. Revenue in the same period was up 59% to $4.5 billion.
2HFY2021 core profit of $220 million was down 13% h-o-h but up 46% y-o-y, beating the CGS-CIMB analysts’ forecasts by 7%.
In a Feb 23 note, Lim and Tan are maintaining “add” on Sembcorp Industries with an unchanged target price of $2.96, which represents a 20.3% upside.
“All segments turned in stronger h-o-h earnings growth in 2HFY2021, with urban solutions delivering the highest h-o-h growth of 46% due to record land sales in China and higher land prices, and a net profit of $92 million,” write the CGS-CIMB analysts.
“Conventional energy (CE) exceeded management’s guidance of a weaker 2HFY2021, delivering a steady 2% h-o-h increase in net profit to $188 million. Strong merchant market tariffs (USEP) in Singapore and India (IEX) in 4QFY2021 resulted in a higher spark spread,” they add.
“In Singapore, we believe the cogen power plant turned profitable in FY2021 from stronger ASPs and favourable operating leverage as contracts are generally on cost-plus basis. CE 2HFY2021 net profit would have been higher excluding a $30 million provision for remedial obligations in the UK,” write Lim and Tan.
Renewable plans on track
The company is in the midst of shifting its business focus to renewable energy related activities.
2HFY2021 renewable profit of $32 million, up 33% h-o-h and up 146% y-o-y, was stronger than Lim and Tan’s $25 million forecast, mainly due to green credit from India wind, stronger margin from battery storage in UK as well as the seasonally strong winds in India.
Indeed, Sembcorp Industries’ renewable transformation is taking shape, writes DBS Group Research analyst Ho Pei Hwa. “Sembcorp Industries’ green transformation is advancing ahead of target since the announcement in May 2021. Within a year, its gross installed renewable capacity has more than doubled to 6.1GW (4.3GW attributable to Sembcorp Industries) from 2.6GW as of end-2020 and looks set to achieve its 10GW target much sooner than 2025.”
In a Feb 24 note, Ho is maintaining “buy” with a higher target price of $3.20 from $3 previously.
Sustainable solutions accounted for 35% of Sembcorp Industries’ core earnings in FY2021. Of which, the Renewable segment contributed $56 million while integrated Urban Solutions $155 million. “We expect renewable contribution to accelerate next few years as the new capacity progressively comes online,” writes Ho.
The company also declared a final dividend of 3 cents, bringing full year payout to 5 cents, translating to a dividend yield of 2.3%. “We project a similar 5-6 cents dividend next two years,” says Ho.
2022 outlook
Meanwhile, Citi Research analyst Jame Osman expects Sembcorp Industries’ near-term performance to be positively impacted by its recent renewable acquisitions in China.
Last year, the company secured 2.9GW of new renewable energy projects across key markets. Upon completion of the 658MW portfolio acquisition in China in the first half of 2022, gross renewables capacity installed and under development will reach 6.1GW.
“Further, the recent signings of long-term power purchase agreements (PPAs) in India’s SEIL should place the company in a better stead to eventually divest its coal plants and further its renewables pivot,” writes Osman.
“Finally, we expect the company to deploy a further $3.8 billion over 2022-25 largely toward capturing project opportunities in the region as governments look to accelerate decarbonisation and green energy efforts,” he adds.
In a Feb 23 note following the results, Osman maintained “buy” on Sembcorp Industries with a target price of $2.52, a much more conservative figure than CGS-CIMB and DBS. After a briefing with Sembcorp Industries that same day, however, Osman raised his target price to $2.80 on Feb 24.
“Management refrained from disclosing additional details following the recent long-term PPAs signed for its thermal plant P2 in India in January  and February. However, it does expect P2 to turn profitable as a result (versus the past three-year average yearly loss of $47 million),” writes Osman.
“With the plants stabilised, management said that it is considering various options for these assets. We continue to believe that Sembcorp Industries could ultimately look to divest ownership of its thermal plants in the near to medium term to achieve its 2025 emission target and further its renewables pivot,” he adds.
According to Osman, Sembcorp Industries also said it “remains actively on the lookout for potential opportunities across its markets beyond China”.
Osman raised FY2022-2023F EPS forecasts by 6-7% mainly to factor in the “better-than-expected operational trends” in conventional energy and urban solutions segments.
Recommendation upgrade
PhillipCapital analyst Terence Chua has upgraded his call on Sembcorp to “accumulate” from “neutral” previously as Sembcorp’s FY2021 net profit outperformed his FY2021 estimates by 146%.
The beat came from the higher revenue from Sembcorp’s conventional energy segment, which surpassed his expectations on the back of better spark and dark spreads.
To this end, Chua has lifted his target price to $2.94 on the back of higher FY2022 PATMI estimates by 6.8%. The higher PATMI estimates come as Chua factors in higher profits from the conventional energy segment for the year.
Looking ahead, Chua says he expects Sembcorp to continue with its transition to sustainable solutions and sustainable development.
“Despite its ambitious growth plans, it will not require any equity fund-raising, relying entirely on internal sources,” he says.
For FY2022, he expects the conventional energy segment to be “supported by firmer commodity prices and energy markets”.
Best-performing counter in the STI to date
The team at OCBC Investment Research has kept its “buy” call on Sembcorp with a higher fair value estimate of $2.90 from $2.50 on the back of its strong 2HFY2021 results.
“With a turnaround due to the de-merger with Sembcorp Marine (SembMarine), Sembcorp’s key financial metrics such as return on equity (ROE) have turned for the better, but we would be even more encouraged if improvement in the future were to be driven by a sustainable fundamental pick-up in the utilities space,” writes the team.
“Successful execution of its renewables strategy provides further scope for re-rating, though good assets may not come cheap currently,” it adds.
Noting that the group is the best-performing counter on the Straits Times Index (STI) with its share price up by 28% year-to-date as at Feb 25, the team sees the group as continuing to pivot in the right direction towards renewables. Its ability to deliver higher ROE support share price performance is also a positive.
Potential catalysts, according to the OCBC team, include the accretive acquisitions in the region at “reasonable valuation multiples”.
The improvements on the ESG front with further push into renewables as well as the unlocking of value in subsidiaries and associates are also further catalysts, writes the team.
Likewise, CGS-CIMB Research analysts Lock Mun Yee and Lim Siew Khee are recommending "add" on Sembcorp Industries with a target price of $2.96.
"We like Sembcorp Industries for earnings upside potential from a tight energy market," write Lock and Lim in a March 8 note on Singapore strategy.
Sembcorp Industries is riding on strong High Sulphur Fuel Oil (HSFO) prices that are benchmarked against crude oil prices, they add. "Cost plus model allows Sembcorp Industries to reap higher spark spread from natural gas fired cogeneration plants in Singapore. Persistent tight energy market could see earnings upside as we have conservatively assumed a 15% y-o-y decline in Sembcorp Industries’ conventional energy profits."
As at 10.21am, shares in Sembcorp Industries are trading 10 cents higher, or 4.08% up, at $2.55.
Photo: Sembcorp
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time of esg taggings 0.04173610499128699
https://www.theedgesingapore.com/capital/results/sembcorp-industries-reports-2hfy2021-earnings-233-million
Sembcorp Industries has reported earnings of $233 million for 2HFY2021 ended Dec 2021, from a loss of $866 million in the year earlier period. Revenue in the same period was up 59% to $4.5 billion.
The company attributes part of the improved earnings to the so-called conventional energy segment that did “exceptionally well” in the last three months of 2021, when energy prices surged across the board.
For the whole of FY2021, earnings came in at $279 million, versus a loss of $997 million incurred in FY2020. Revenue was up 43% to $7.8 billion.
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time of esg taggings 0.024677962996065617
https://www.theedgesingapore.com/news/budget-2022/daunting-and-significant-analysts-react-singapores-carbon-tax-rate-hike
Singapore is taking its green agenda “to a new level” with carbon tax hikes in the coming years , writes DBS Group Research senior economist Irvin Seah.
In a Feb 21 note on Budget 2022 , Seah says Singapore’s current carbon tax rate of $5/tonne of carbon emission “pales in comparison to many other economies at similar stage of economic development”.
Sweden, for example, has set its rate at US$119/tonne. while Switzerland levies US$99/tonne. France charges US$45/tonne, while South Korea has set their carbon tax rate at US$33/tonne, writes Seah.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/dbs-positive-sembcorp-industries-amidst-its-green-transformation
DBS Group Research analyst Ho Pei Hwa has maintained a ‘buy’ rating on Sembcorp Industries (Sembcorp) with an increased target price to $3 from $2.40, based on a higher price-to-book value (P/BV) multiple of 1.4 times (from 1.2 times previously). The higher target price is also based on a rolled over valuation to FY2022 (from blended FY2021/2022), against 9-10% normalised return on equity (ROE).
“Successful execution of [Sembcorp’s] renewable energy plan, translating into earnings growth, would further lift valuations, writes Ho in his Feb 15 report.
In May 2021, Sembcorp unveiled its strategy to transform its portfolio from brown to green, by focusing on growing renewables and integrated urban solutions businesses. It set quantitative targets to quadruple its renewable portfolio to 10GW by 2025, from 2.6GW of wind and solar capacity in Southeast Asia, India, and China as of end-2020, according to Ho.
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time of esg taggings 0.05644362396560609
https://www.theedgesingapore.com/capital/results/wing-tai-holdings-sees-5-dip-1hfy2021-earnings-538-mil
Property group Wing Tai Holdings has reported earnings of $53.8 million for the 1HFY2021 ended December, 5% lower than earnings of $56.8 million in the corresponding period the year before.
1HFY2021 earnings per share (EPS) stood at 6.16 cents on a diluted basis, down from the EPS of 6.53 cents in the 1HFY2020.
Revenue for the half-year period increased 26% y-o-y to $306.6 million due mainly to the higher contribution from development properties. Revenue for the current period was largely attributable to the additional units sold in Le Nouvel Ardmore and the progressive sales recognised from The M at Middle Road in Singapore.
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time of esg taggings 0.025482309982180595
https://www.theedgesingapore.com/news/property/capitaland-development-wins-bid-two-prime-residential-sites-china-748-mil
CapitaLand Development (CLD), the development arm of CapitaLand Group, has won bids for two prime residential sites in China’s Wuhan and Chengdu at a total price of RMB3.49 billion ($748 million).
The site in Wuhan was clinched at a price bid of RMB2.31 billion, while the Chengdu site was secured at a price bid of RMB1.18 billion.
Wuhan is the capital of Hubei province and is the largest city in Central China. Chengdu is the capital and largest city in China’s Sichuan province.
The site in Wuhan is located in the city’s central business district (CBD) at the intersection of Fazhan Avenue and Huaihai Road in Qiaokou District. It measures 45,709 sqm in site area with a gross floor area (GFA) of 146,000 sqm.
The Chengdu land plot. Photo: CapitaLand Development
The Chengdu site is located in Chenghua district, next to the middle ring road of Northeast Chengdu. The site covers an area of 29,382 sqm with a GFA of 73,453 sqm.
CLD says it plans to build 1,581 quality homes catering to first-time buyers and upgraders on these sites.
Construction is slated to begin this year.
According to CLD, the newly acquired sites will boost its pipeline of residential units under development in China to 19,139 units.
Jason Leow, CEO of CLD, says, “China is one of three core markets for CLD, and we hold a long-term view of our business in the country. We are optimistic that the decisive moves taken by the authorities to reduce speculation will promote the healthy and sustained development of China's housing market in the long term.”
“We are further encouraged by the Chinese government’s recent pledge on policy easing, which is expected to set China’s real estate sector on the path to recovery. CLD stands ready to capitalise on attractive opportunities that have emerged, as seen in the two prime residential sites in Wuhan and Chengdu that we have acquired. CLD remains committed to China and we will continue to stay invested in the market to build quality real estate products and deliver healthy returns for our stakeholders,” he adds.
Tan Tze Shang, CEO of CLD (China), says, “With 28 years of experience in China, CLD is well-placed to take advantage of our strong financial position and in-house development expertise to invest in and maximise the potential of prime residential sites.”
He continues, “Wuhan and Chengdu are part of CapitaLand’s five core city clusters in China, where we have established a track record in developing and operating well-received business parks, integrated developments as well as residential, retail, office and lodging properties. We will leverage our deep market understanding of both cities to create quality and affordable homes that meet the aspirations of homebuyers. In addition to residential projects, we remain on the lookout for compelling investment opportunities across real estate asset classes to build a diversified and resilient portfolio.”
Shares in CapitaLand Investment (CLI) closed at $4.04 on April 1.
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time of esg taggings 0.05937249609269202
https://www.theedgesingapore.com/capital/reits/cict-announces-fourth-acquisition-three-months-capitaland-investment-benefits
On March 25. the manager of CapitaLand Integrated Commercial Trust (CICT) announced it was jointly acquiring buying 79 Robinson Road with CapitaLand Open End Real Estate Fund (COREF), a newly established discretionary fund managed by CapitaLand Investment (CLI), for $1.26 billion or $2,423 psf. The consideration is in line with independent valuations, says CICT’s manager. CICT will hold 70% and COREF 30%.
The property has a net property income (NPI) yield of 4.0%, based on pro forma annualised NPI for January. The transaction is expected to be completed in 2Q2022. CICT’s total outlay will be $869.2 million including fees and expenses of $14.1 million.
Although the acquisition of CLI's 35% stake in 79 Robinson Road is an interested party transaction (IPT), the value of its IPT as a percentage of CICT's net tangible asset is below 5%, the threshold at which it would require unitholders’ approval.
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time of esg taggings 0.025793483946472406
https://www.theedgesingapore.com/capital/brokers-calls/rhb-downgrades-cict-neutral-while-other-analysts-keep-buy-call-following
RHB Group Research analyst Vijay Natarajan has downgraded his recommendation on Capitaland Integrated Commercial Trust (CICT) to “neutral” from “buy” after the Singapore government, on March 24, announced that it will significantly relax its Covid-19 measures.
The relaxed measures will begin this week.
While CICT’s Singapore office and retail portfolio looks to benefit from the relaxed measures, Natarajan sees the REIT nearing its fair value.
As at March 28, the counter is up 15% since January and is trading at 1.1x P/BV with a yield of around 5%.
“The positives are mostly priced in,” the analyst says.
Natarajan’s report on March 28 also comes following the REIT’s acquisition of 79 Robinson Road on March 25.
On March 25, CICT, together with CapitaLand Open End Real Estate Fund (COREF), acquired the building for a total of $1.26 billion or $2,423 psf.
CICT will acquire 70% in its stake in 79 Robinson Road, while COREF will acquire the remaining 30% balance stake.
The building was acquired from a special purpose vehicle (SPV) held by sponsor CapitaLand Investment (CLI) who owns a 65% stake in the SPV. The remaining 35% in the SPV is held by Mitsui & Co., Ltd. and Tokyo Tatemono Co., Ltd.
79 Robinson Road is a redevelopment of the former CPF building. The redevelopment was completed in March 2020 with 45 years left on its lease tenure.
To Natarajan, the agreed value of $1.26 billion translates to an initial net property income (NPI) yield of 4%.
According to the analyst, CICT’s acquisition of 79 Robinson Road was “largely anticipated”, although the pricing is slightly on the higher end.
“The acquisition price is 15% higher than Capitaland Investment Ltd’s carrying value of $1.1 billion (as at end-December 2021) and 42% higher than nearby OUE Downtown office’s $1,704 psf (as at end December 2021) which has a similar land lease tenure,” writes Natarajan.
“On the positive side, the asset comes with brand new high specifications and a Building and Construction (BCA) Green Mark Platinum certification (highest green rating). Additionally, there is room for occupancy upside from the current 92.9% with the office sector experiencing a continued positive demand,” the analyst adds.
In addition, 79 Robinson Road comes with a long weighted average lease to expiry (WALE) of 5.8 years and rent step-ups for the majority of leases. The top three tenants which account for around 48% of income are Allianz, Equinix Asia Pacific, and The Boston Consulting Group.
The acquisition of 79 Robinson Road is accretive to CICT’s distribution per unit (DPU) by 2.9% on a pro-forma basis.
The REIT’s gearing post-acquisition is expected to come in at 41%, with the sum funded by a mix of the divestment proceeds of JCube and debt.
According to Natarajan, this indicates that subsequent acquisitions are likely to come with an equity fund raising.
“Management hinted that its next potential acquisition would be in Singapore and is also based on investor feedback for more Singapore exposure,” says the analyst.
“We believe a likely candidate could be a remaining stake in recently completed CapitaSpring (currently CICT owns a 45% stake). Post-acquisition, Singapore accounts for 92% of its portfolio value with Australia and Germany accounting for 4% each,” he adds.
Factoring in the acquisitions, Natarajan has upped his DPU estimates by 2% - 3% for the FY2022 to FY2024.
"CICT scores high on the environmental, social and government (ESG) front (3.3 out of 4.0), which is derived based on our proprietary in-house methodology and is reflective of its committed efforts to reduce carbon footprint and a good governance. As the score is three notches above country median, we have applied a 6% ESG premium,” he writes.
Despite the recommendation downgrade, Natarajan has upped his target price estimate to $2.35 from $2.20.
Other analysts keep “buy” call
UOB Kay Hian analyst Jonathan Koh has kept his “buy” call on CICT with a higher target price of $2.50 from $2.45 as he sees the acquisition of 79 Robinson Road as a positive development.
He has also raised his DPU forecast for the FY2023 by 2% after factoring in the acquisition, which will up CICT’s assets under management (AUM) by 3.9%.
In his report on March 28, Koh is upbeat on the building’s NPI yield of 4%, which is attractive for Grade A office properties in prime locations.
Furthermore, the property is well located, enjoying close proximity to three MRT stations: Tanjong Pagar on the East West line, as well as the upcoming Prince Edward and Shenton Way stations on the Circle line and Thomson-East Coast line respectively. The building will also enjoy direct underground access to Tanjong Pagar MRT in future.
The building’s diversified blue chip tenant base is yet another positive, with its occupancy at 92.9% as at end December 2021.
Should the REIT prefer to up its stake in the building in future, it has pre-emptive right of first refusal (ROFR) to acquire the remaining 30% stake from COREF.
Following the acquisition, CICT could also acquire future properties in partnership with COREF.
COREF is a regional open-end fund providing long-term strategic exposure to a diversified portfolio of institutional grade income-producing assets in developed markets within the Asia Pacific region. It targets to raise US$1 billion ($1.36 billion) to US$1.5 billion after a three-year build-out period.
Like Natarajan, Koh has also noted that the easing of Covid-19 restrictions will benefit the REIT.
“Groups of up to 10 fully vaccinated persons will be allowed to dine in at food and beverage (F&B) establishments, including hawker centres and coffee shops, compared with the existing limit of five. The current restriction on the sale and consumption of alcohol after 10.30pm will also be lifted. F&B is the largest contributor and accounted for 19.9% of CICT’s gross rental income on a group-wide basis in 2021,” he writes.
To Koh, catalysts to CICT’s share price includes a steady recovery in shopper traffic and tenant sales with progressive easing of social distancing measures, as well as the asset enhancement and redevelopment of the REIT’s existing properties.
Citi Research analyst Brandon Lee has kept “buy” on CICT with a target price of $2.35.
To him, the acquisition came as no surprise, although the stake stood lower than his expectations.
“We thought (and had expected) CICT could easily have digested 100% of 79 Robinson Road given its sizeable balance sheet, and post-acquisition gearing of 42.1% (assuming incremental 30% stake is fully funded by debt) is still manageable,” the analyst writes in his March 26 report.
“Partial equity could also be explored, especially given decent valuation (1.08x P/B) following strong share price performance year-to-date (y-t-d) (+9%), which could still result in [around] 1% DPU accretion on our estimates,” he adds.
“While we think this could stem from gearing concerns, we thought 42% is manageable and a partial equity raising (especially given recent strong share price performance) could help allay leverage concerns,” he continues.
The way Lee sees it, 79 Robinson Road will be sheltered from the upcoming office supply in the central business district (CBD) in 2022 and 2023 given expiries of 0/1.1/1.7/5% in 2022/2023/2024/2025.
“While this also means CICT will not benefit fully from the ongoing office rental upcycle except for the remaining 7.1% vacancy, this is mitigated by rental step-ups for majority of leases. Post-acquisition, we estimate Singapore office will contribute a higher 34/45% (+2/2 percentage points) to CLI’s AUM/NPI,” he says.
“Divesting JCube at below 4% and redeploying proceeds into higher-yielding 79 Robinson Road is a sound portfolio reconstitution strategy,” he adds.
To the analyst, he is also surprised by the 15% increase in the building’s valuation from Dec 31, 2021, to March 1, 2022, although he attributes the valuation to figures from different valuers.
In his report, Lee has identified a sharp decline in economic activity that could result in a reduced demand for retail and office space, as well as a sharp rise in interest rates, as CICT’s key downside risks.
On the other hand, a faster-than-expected recovery in tenants’ sales and shopper traffic after the re-opening, plus higher-than-expected retail rental rates following the asset enhancement initiatives have been identified as re-rating catalysts to CICT’s unit price.
Higher-than-expected office rental rates and stronger-than-expected economic growth are also upside factors identified.
CGS-CIMB Research analysts Lock Mun Yee and Eing Kar Mei have kept their "add" recommendation with an unchanged target price of $2.57 on the back of the acquisition of 79 Robinson Road.
They have also increased their DPU estimates for the FY2022 to FY2024 by 0.03% to 1.44% to factor in the accretive acquisition.
"We believe CICT is well placed to benefit from a macro recovery, given its diversified and stable earnings profile," the analysts write in their March 25 report.
"Re-rating catalysts are more clarity on asset enhancement/redevelopment plans [whereas] downside risks include slower-than-expected portfolio value creation and slower rental recovery outlook," they add.
DBS Group Research analysts Rachel Tan and Derek Tan called the acquisition a "home run" as they kept their "buy" call and target price of $2.50 on CICT.
"With occupancy currently at 92.9% and average rents based on our ballpark estimate of $10.50 psf, we believe CICT could benefit from further upside as the remaining vacancies are leased. Management estimates the asset could yield [around] 4.5% on a normalised state with rent escalation and improvement in occupancy," the analysts write in their March 28 report.
The analysts also see future joint acquisitions with COREF in terms of opportunities that may come up within the Asia Pacific (APAC) region.
CapitaSpring, however, may not be on that list given CICT's call option to acquire its remaining stake in the property.
"The co-investment of CICT and COREF highlights the diverse source of capital that is available for CapitaLand Investment Limited (CLI) to tap to grow its overall funds under management (FUM)," the analysts say. "While there will be questions surrounding overlaps in investment strategies of both CICT and COREF going forward, we see this co-investment as an opportunity to tap on their respective cost of capital to take on significant sized deals without the constraints that CICT may have on its higher cost of equity, which may lower accretion (if CICT taps on the equity market to partly fund this acquisition)."
Looking ahead, CLI has over $10 billion in assets on its balance sheet for recycling, of which $3 billion will be targeted for divestment in 2022.
"Despite its recent foray into Australia, CICT’s management believes there are still potential opportunities in Singapore. Aside from 79 Robinson Road, CICT’s sponsor asset pipeline in Singapore comprises CapitaSpring, ION Orchard and potentially more with ongoing mergers and acquisitions (M&As)," note the DBS analysts.
As at 12.46pm, units in CICT are trading flat at $2.23, or an FY2022 P/B of 1.06x and dividend yield of 5.1%, according to RHB’s estimates.
article_here
time of esg taggings 0.04953377996571362
https://www.theedgesingapore.com/capital/reits/capitaland-investment-divests-79-robinson-road-cict-and-coref-126-bil
CapitaLand Investment Limited (CLI) and its joint venture partners for 79 Robinson Road – Mitsui & Co. and Tokyo Tatemono Co. – have entered into agreements to divest their 100% interest in the property to CLI-sponsored investment vehicles CapitaLand Integrated Commercial Trust (CICT) and CapitaLand Open End Real Estate Fund (COREF) for $1.26 billion or $2,423 per sq ft.
CLI’s effective stake in the property is 65%.
The transaction is targeted to be completed in 2Q2022. Upon completion, CLI is expected to receive proceeds of about $391 million and realise an estimated gain of $72 million.
Located in the Tanjong Pagar area of Singapore's central business district, 79 Robinson Road is a Grade A office building completed in April 2020 with a remaining land tenure of around 45 years. The 29-storey property comprises about 514,950 sq ft of office space and 4,999 sq ft of ancillary retail space, with a committed occupancy of 92.9% as at Dec 31, 2021.
The property's weighted average lease expiry is 5.8 years and office tenants include multinational companies from diverse sectors such as banking, legal, insurance & financial services, business consultancy, IT, aviation, media and telecommunications.
As at Dec 31, 2021, CLI had a pipeline of approximately $10 billion of high-quality investment properties on its balance sheet, intended for recycling to its various fund platforms over the next three to four years, which will be an important contributor to the group’s funds under managemen (FUM), fee-related earnings (FRE) and return-on-equity growth. The group targets to recycle at least $3 billion of assets annually.
Jonathan Yap, CEO, fund management, CLI says, "CLI’s divestment of its interest in 79 Robinson Road to CICT and COREF demonstrates the disciplined execution of our strategy to convert balance sheet assets into FUM that generate recurring FRE. It also shows our strong commitment to support the long-term growth and continual success of CLI’s investment vehicles – both our sponsored real estate investment trusts and private funds – by providing a pipeline of attractive assets.
"Moving forward, CLI will participate in the organic growth of 79 Robinson Road through our fund management platform, and continue to receive recurring income from providing asset and property management services to the new owners,” he adds.
Shares in CLI closed at $3.90 on Mar 25.
Photo: CapitaLand
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time of esg taggings 0.027212206041440368
https://www.theedgesingapore.com/capital/reits/tailwind-arrives-capitaland-investment
Shareholders of CapitaLand Investment (CLI) must be breathing sighs of relief at the performance of the stock and CLI’s results for FY2021 ended December 2021. Excluding the 15 cents dividend, CLI’s share price is up some 11.5% year to date. Since the listing of CLI at $2.95 on Sept 20 last year, its share price is up 31.5%.
Geographically, CLI’s earnings are a lot more diversified than the old CapitaLand. For instance, in FY2021, 36% of ebitda was from developed markets excluding Singapore, 33% from Singapore, 28% from China, and 3% from emerging markets.
The old CapitaLand was heavy on residential development, retail malls and integrated developments, with many of these in China. CapitaLand’s previous management was focused on a high exposure to China. The target was Singapore and China contributing 80% to assets and earnings.
article_here
time of esg taggings 0.04425504291430116
https://www.theedgesingapore.com/capital/brokers-calls/uob-yangzijiang-st-engineering-capitaland-investment-among-dbss-picks-hedge
Amid the uncertainties due to the ongoing war in Ukraine, DBS Group Research analysts Yeo Kee Yan and Janice Chua have identified seven counters that investors can use as a hedge.
These are: UOB, Yangzijiang, Singapore Technologies Engineering (ST Engineering), CapitaLand Investment (CLI), AEM, CapitaLand Integrated Commercial Trust (CICT), and Far East Hospitality Trust (FEHT).
“We pick companies that meet these criteria: Benefits from the inflationary environment, structural trend or in a recovery industry able to ride out current uncertainties, positive corporate developments, no direct negative impact from rising oil/commodity prices, no severe impact from supply chain disruption, and less than 20% revenue exposure to Europe,” they write in their report dated March 15.
The analysts have also kept their year-end Straits Times Index (STI) target of 3,550 points.
The target is pegged to slightly below a 13.2x average FY2023 P/E.
The way Yeo and Chua see it, the three Singapore banks, which are index heavyweights with a combined 42% within the STI will benefit from improving net interest margins (NIMs) in a rising rate environment.
“Singapore Telecommunications or SingTel (6.5% weight) is resilient to current uncertainties,” write the analysts. Singapore Airlines (SIA) and ComfortDelgro (CDG), which are negatively affected by the oil price, have small index weights of 2.3% and 0.6%, respectively, they add.
To date, companies under the brokerage’s coverage have seen a 1.8% downward revision to their FY2022 earnings.
“The anticipated delay of China’s reopening timeline till end-2022 affected Genting Singapore and China Aviation Oil (CAO). The industrial sector was impacted by lower Covid-19 relief and higher energy cost for CDG,” note the analysts. “This was offset by positive revisions for banks UOB and OCBC, on an accelerated rate hike cycle.”
Despite the cut in the brokerage's earnings estimates, earnings growth for the constituents under the STI remain strong at 10% for the FY2022, accelerating to 13% for the FY2023, say the analysts.
“Earnings recovered to 98% (ex-property) of the pre-pandemic level in end-2021 and could rise 9.5% above FY2019 results by year end,” they estimate.
To this end, Yeo and Chua expect strong earnings per share (EPS) and distribution per unit (DPU) growth for beneficiaries on the reopening. Counters mentioned include Genting Singapore, SATS, SIA Engineering, CDG, CDL Hospitality Trusts (CDLHT) and Ascott Residence Trust (ART).
“AEM leads the technology sector’s double-digit EPS growth over the next two years, but healthcare’s EPS contraction will come from Riverstone’s lower average selling price (ASP) assumption and delayed expansion plans,” add the analysts.
In their report, the analysts note that the recent 4QFY2021 results season had not factored in the rising prices in oil and commodities, as well as supply chain disruptions due to the Ukraine war.
“If uncertainties are prolonged, transport-related stocks such as SIA, CDG, Hutchison Port Holdings Trust (HPHT) and SBS Transit are vulnerable to oil prices that stay high for longer,” they write.
“Technology could see supply disruptions, e.g., a possible palladium impact on Frencken and Valuetronics. REITs with all-Europe exposure e.g., Cromwell European REIT and IREIT Global may also be affected. Resilient sectors are telcos, healthcare and consumer staples,” they add.
As at 3.57pm, the STI is trading 0.58 points lower or 0.02% down at 3,231.45 points.
Photo: Stock image
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time of esg taggings 0.06327274302020669
https://www.theedgesingapore.com/capital/brokers-calls/analysts-capitaland-investment-after-strong-fy2021-results
Analysts from DBS Group Research, UOB Kay Hian and PhillipCapital say they like CapitaLand Investment (CLI) after the real estate investment manager (REIM)’s PATMI of $1.35 billion for the FY2021 ended December surpassed expectations.
DBS analysts Derek Tan and Rachel Tan have kept “buy” on the counter with an unchanged target price of $4, the lowest amongst the three brokerages.
In their report dated Feb 28, the analysts admit that their estimates are more conservative compared to their peers. However, the analysts see CLI as an “asset and capital efficient” company with scalable fee-related earnings (FRE) and fund assets under management (AUM) platforms for growth.
“CLI’s private funds and REITs complement each other in terms of acquisition strategy. With diverse real estate strategies ranging from opportunistic, value-add to core investments, we see CLI leveraging on opportunities during market upcycles and downcycles. Its REITs and private funds can be active across all real estate cycles,” write the analysts.
The recovery of CLI’s lodging business, Ascott Limited, is also underway, note the analysts.
During the year, Ascott Limited achieved a new milestone with a 10% rise in operational units to 77,000 units, with 56,000 units in the pipeline.
“With 15,000 units secured in 2021 and a pipeline of over 8,200 units, Ascott is on track to hit its target of 160,000 units by 2023,” write the analysts.
In FY2021, Ascott’s portfolio revenue per average room (RevPAR) recovered +19% y-o-y to $78/night with most markets reporting an improvement y-o-y as border restrictions relaxed, they add, noting that the outlook remains robust on the back of the easing of border restrictions.
To the analysts, catalysts to CLI’s share price are: the launch of new fund products and REIT acquisitions with an aim to grow funds under management (FUM) to $100 billion by 2024; as well as a rebound in operational performance for its lodging business.
“These are expected to drive [a] three-year net profit compound annual growth rate (CAGR) by 12% during FY2021-FY2024,” they write.
UOB Kay Hian analyst Adrian Loh has also kept “buy” on CLI with a higher target price of $4.13 from $4.02 previously.
He has also upgraded his earnings estimates for the FY2022 and FY2023 by 5% and 8% respectively to account for a slightly faster recovery in CLI’s lodging segment. The higher earnings estimates will also account for slightly better margins in its fund management business, says Loh in his Feb 28 report.
“We value CLI at $4.13/share (previously $4.02) using a sum of the parts (SOTP) methodology which comprises of: its fee-income platform where CLI earns fees from its investment management, property management and lodging management platforms; and its investment properties which CLI accounts for on its own balance sheet, as well as its various stakes in its listed REITs and its various stakes in its unlisted funds,” writes the UOB Kay Hian analyst.
Following CLI’s strong set of numbers in its maiden results, Loh expects the REIM to “continue to witness strong growth in its funds under management as well as fee income-related businesses”.
“Importantly, we expect lodging to drive earnings growth in the near term,” he adds.
Finally, PhillipCapital analyst Natalie Ong has maintained her “accumulate” recommendation on CLI. In her report on March 8, Ong has also upgraded her target price estimate to $4.05 from $4 previously.
The higher target price comes as Ong lifts her investment management PATMI estimates for the FY2022 to factor in growth in CLI’s FUM as well as higher EBITDA in its lodging segment.
“At current growth rates, CLI is on track to hitting its 2023 lodging target of 160,000 keys under management and [its] $100 billion 2024 FUM target. This will increase the proportion of fee-related earnings for CLI, which currently account for 40% of operating PATMI,” writes Ong.
She adds that as the REIM pushes to grow its private equity (PE) FUM, new funds will “adopt a traditional PE fee structure which includes an ongoing management fee based on committed capital as well as carry fees which are tied to the performance of the fund manager”.
“As CLI’s private fund business is less established compared to its track record as a manager of listed funds, CLI is prepared to take up to a 20% stake in newly incepted private funds as a show of confidence and alignment of interest with its third-party equity providers,” notes Ong.
Shares in CLI closed 1 cent higher or 0.27% up at $3.67 on March 8.
Photo: CLI
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time of esg taggings 0.03696068818680942
https://www.theedgesingapore.com/news/property/citydev-capitaland-investment-mind-nav-and-share-price-gap
During a results briefing on Feb 25, City Developments (CDL) chairman Kwek Leng Beng appeared to look inwards when at least two questions on how its management intended to narrow the valuation gap between CDL’s trading price and its net asset value (NAV) and revalued NAV (RNAV), popped up.
“The key is we must find the right strategy for growth. Once you have that strategy, then your share price cannot fluctuate betwen $7.10 and $6.80,” says Kwek. According to CDL’s financials for FY2021 (the company has a December year-end), as at Dec 31, 2021, NAV stood at $9.28, down 1.1% y-o-y.
The company’s policy is to state investment properties at cost less accumulated depreciation and impairment losses. If fair value gains on investment properties had been factored in and the group’s hotels continue to be stated at cost, RNAV would be at $15.70, up 10.1% y-o-y.
article_here
time of esg taggings 0.025824636220932007
https://www.theedgesingapore.com/news/property/capitaland-development-signs-13-bil-mou-vietnam-investment
CapitaLand Development (CLD), the development arm of CapitaLand Group, has signed a memorandum of understanding (MOU) with the People’s Committee of Bac Giang province, in Vietnam.
The MOU outlines the mutual interest between CLD and the provincial government to explore the development of CLD’s first industrial park, logistics park and township development in Vietnam.
The development has a total projected investment value of $1.3 billion or VND22.7 trillion.
article_here
time of esg taggings 0.02434176905080676
https://www.theedgesingapore.com/capital/results/capitaland-investment-back-black-earnings-762-mil-2hfy2021
CapitaLand Investment (CLI) has reversed into the black with earnings of $762 million in the 2HFY2021 ended December, from the $461 million loss recorded in the corresponding period the year before.
Earnings for the FY2021 stood at $1.67 billion, from the $146 million loss in the FY2020.
Earnings per share (EPS) on a fully diluted basis for the 2HFY2021 and FY2021 stood at 15.1 cents and 37.6 cents respectively.
article_here
time of esg taggings 0.024905513040721416
https://www.theedgesingapore.com/capital/brokers-calls/maybank-securities-starts-capitaland-investment-buy-tp-430
Maybank Securities analyst Chua Su Tye has initiated coverage on CapitaLand Investment (CLI) with a “buy” recommendation and a target price estimate of $4.30.
The target price implies an FY2022 price-to-book (P/B) of 1.25 times, which is justified by return on equity (ROE) improving to 10% by the FY2023 compared to the average of 6% in the past three years, says Chua.
CLI is one of the world’s largest real estate investment managers (REIMs) with assets under management (AUM) of $120.8 million.
article_here
time of esg taggings 0.025100575061514974
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-initiates-buy-capitaland-investment-tp-402
UOB Kay Hian has initiated coverage on CapitaLand Investment (CLI) with a “buy” recommendation and target price of $4.02.
The estimated target price includes CLI’s fee-income platform, which comprises its investment management (IM), property management (PM) and lodging management (LM) platforms. It also includes CLI’s investment properties, which the group accounts for on its balance sheet, as well as its various stakes in its listed REITs and unlisted funds, says analyst Adrian Loh.
“Compared with its regional and global peers, CLI’s valuations appear inexpensive with 2022 price-to-net asset value (P/NAV) and EV/EBITDA at 1.4 times and 21.1 times respectively,” he writes in a Feb 9 report.
article_here
time of esg taggings 0.045538853853940964
https://www.theedgesingapore.com/news/reits/cict-divests-jcube-capitaland-group-subsidiary-340-mil-interested-person-transaction
The manager of CapitaLand Integrated Commercial Trust (CICT) has divested JCube, a mall located in Jurong Gateway, to CapitaLand Group for a consideration of $340 million on Jan 24.
CICT, on the evening of Jan 24, announced that it had entered into a sale and purchase agreement (SPA) with Tanglin R.E. Holdings in relation to the sale of the property.
Tanglin R.E. Holdings is an indirect subsidiary of the CapitaLand Group. The group itself is an indirect subsidiary of Temasek Holdings.
article_here
time of esg taggings 0.023090810049325228
https://www.theedgesingapore.com/news/property/capitaland-development-divests-hanoi-grade-office-building-751-mil
Capitaland Development (CLD), the development arm of CapitaLand Group, has divested its international Grade A office building in Hanoi Vietnam, for $751 million. The amount was said to be made at a premium to book value, with the divestment made to an unrelated third party, reveals CLD.
The office building, Capital Place, is held under the CapitaLand Vietnam Commercial Value-Added Fund ( CVCVF), in which CLD holds a 50% stake in. The remaining interest is held by MEA Commercial Holdings.
CVCVF was incepted in 2017 with a fund size of $177 million, and is being managed by CapitaLand Investment (CLI).
article_here
time of esg taggings 0.03573385183699429
https://www.theedgesingapore.com/news/property/capitaland-opens-79-robinson-road-mitsui-and-tokyo-tatemono
CapitaLand Investments, along with Mitsui and Co and Tokyo Tatemono, have officially opened office development 79 Robinson Road. Located within what will be known as the Greater Southern Waterfront area, 79 Robinson Road is jointly owned by the three parties. It is a 29-storey building with a net lettable area (NLA) of about 518,000 sq ft, and was designed by American firm Gensler in collaboration with Singapore’s DCA Architects. To date, 79 Robinson Road has secured close to 93% in committed occupancy.
In addition to the building’s core workspace offerings, Bridge+, CapitaLand’s flexible workspace and community platform, operates 56,000 sq ft of collaborative spaces at 79 Robinson Road that are also accessible by tenants of the building.
Chris Chong, CEO of Retail and Workspace (Singapore and Malaysia) for CLI, said: “We are heartened by the strong leasing interest in 79 Robinson Road, as well as in the newly completed CapitaSpring, which reflects CapitaLand’s ability to meet evolving workspace needs amidst robust demand for quality workspace in prime CBD locations.” As at 3.08 pm, shares of CLI were trading at $3.59, down once cent or 0.28% lower than its previous close.
article_here
time of esg taggings 0.02615800593048334
https://www.theedgesingapore.com/capital/brokers-calls/property-sector-offers-deep-value-accumulate-further-weakness-dbs
DBS Group Research analysts Derek Tan and Rachel Tan believe it’s a good time to buy Singapore property stocks, given attractive valuations that are “too good to ignore”.
Their recommendation comes nearly a month after the government announced a fresh set of property cooling measures effective Dec 16, 2021.
See: Fresh set of property cooling measures with immediate effect
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time of esg taggings 0.026732766069471836
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-grab-marco-polo-marine-cdl-hospitality-trust-kimly-capitaland
Grab Holdings Price target: DBS Group Research “buy” US$9
Multi-sector leadership but competition looming
DBS Group Research has initiated “buy” on Grab Holdings with a 12-month target price of US$9 ($12.19), representing a 25% upside to its last-traded price of US$7.22 on Jan 3. The company has a December year end.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/dbs-says-capitaland-investment-born-fly-tp-400
DBS Group Research analysts Derek Tan and Rachel Tan have re-initiated a ‘buy’ rating on CapitaLand Investment (CLI) with a target price of $4.00, offering a 20% upside.
The analysts expect the catalysts that emerge to be the launch of new fund products and REIT acquisitions, with an aim to grow funds under management (FUM) to $100 billion by 2024, up 19% from 2021, and a rebound in operational performance from its lodging business.
“These are expected to drive a three-year net profit compound annual growth rate by 12% during FY2021-FY2024,” say the analysts.
article_here
time of esg taggings 0.026465127943083644
https://www.theedgesingapore.com/news/property/citydev-capitaland-investment-mind-nav-and-share-price-gap
During a results briefing on Feb 25, City Developments (CDL) chairman Kwek Leng Beng appeared to look inwards when at least two questions on how its management intended to narrow the valuation gap between CDL’s trading price and its net asset value (NAV) and revalued NAV (RNAV), popped up.
“The key is we must find the right strategy for growth. Once you have that strategy, then your share price cannot fluctuate betwen $7.10 and $6.80,” says Kwek. According to CDL’s financials for FY2021 (the company has a December year-end), as at Dec 31, 2021, NAV stood at $9.28, down 1.1% y-o-y.
The company’s policy is to state investment properties at cost less accumulated depreciation and impairment losses. If fair value gains on investment properties had been factored in and the group’s hotels continue to be stated at cost, RNAV would be at $15.70, up 10.1% y-o-y.
article_here
time of esg taggings 0.022166054928675294
https://www.theedgesingapore.com/news/sustainability/city-developments-ranked-5th-most-sustainable-corporation-world
City Developments (CDL) has ranked 5th in the 2022 Global 100 Most Sustainable Corporations in the World index, jumping from its 40th position last year.
The accolade was announced virtually on Jan 19 at Corporate Knight’s 18th Annual Global 100 Launch.
CDL has been included in the Global 100 ranking for 13 consecutive years. The company remained as Singapore’s most sustainable company in the world, a position held for the fourth consecutive year.
article_here
time of esg taggings 0.049068835098296404
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-yangzijiang-shipbuilding-grab-holdings-sia-engineering-and
Yangzijiang Shipbuilding (Holdings) Price target: Citi Research “buy” $1.98 DBS Group Research “buy” $2.15
Share price ‘will re-rate’ upon successful spin-off Analysts from Citi Research and DBS Group Research have kept their “buy” calls on Yangzijiang Shipbuilding (Holdings) (YZJ) after the component stock of the Straits Times Index announced that it had increased the share capital of its proposed fund management and investment business to $4.3 billion. The analysts also believe that YZJ’s share price will re-rate following the successful completion of the proposed spin-off.
On March 25, YZJ said that it had increased the share capital of Yangzijiang Financial Holding (YZJFH), the entity that will soon be spun off from YZJ, to $4.3 billion comprising 3.95  billion shares, or $1.08 per share. YZJFH will be headed by Ren Yuanlin, former executive chairman of YZJ and father of current chairman and CEO Ren Letian.
The amount is exactly the same as guided by YZJ’s management during the recent FY2021 ended December results and does not come as a surprise, notes Citi analyst Jame Osman. “More importantly, we believe the move is an affirmation of YZJ’s intent to crystallise value via the spin-off, given that its core shipbuilding business is currently trading at a deep valuation discount, in our view,” the analyst writes in his report on March 27.
“As we previously flagged, at YZJ’s current valuation, the market is essentially assigning almost zero residual value for YZJ’s core shipbuilding business versus its past 10-year through-the-cycle mean of 5.4x P/E.”
“Even if we ascribe a more conservative value of 0.5x P/B multiple to its financial assets, it would yield an implied FY2022 P/E of 7x for its shipbuilding business,” he adds. “We continue to believe that a successful spin- off of its investment arm could drive a potential re-rating of YZJ on the basis of improved earnings quality and attract investors seeking more direct exposure to the company’s core shipbuilding business.”
So far, the valuation of the proposed entity has been the main concern for investors with the distribution of the shares of the new entity in specie to existing YZJ shareholders, in which some investors are concerned of a potential sell-off and valuation de-rating.
“We think these concerns may be overdone, considering that 90% of YZJ’s financial assets currently are liquid; classified under current assets. Management had flagged that it is targeting a potential valuation of 1x P/B. Ultimately, the shares of YZJFH could trade on a yield basis,” says Osman.
“Little is known at this stage in terms of [its] potential income distribution, although management has outlined broad plans for the asset management business and its structure,” he adds.
To Osman, YZJ has strong medium-term earnings visibility and momentum, with its record order book and delivery slots filled till 2024. The group also has a positive near-term industry outlook; the potential spin-off of its debt business is a key catalyst to its share price re-rating.
Osman has given YZJ a target price estimate of $1.98 based on a sum of the parts (SOTP) valuation methodology.
“Debt investments currently account for about 30% of the group’s total assets. We have accorded a 13x P/E multiple, a slight discount to +1 standard deviation historical mean, to YZJ’s shipyard operations given lower expected earnings volatility going forward as the shipping industry recovers; and also taking into account that: we expect the group to remain profitable, with respectable ROEs or return on equities (in excess of its peers); and to recognize significant strides the group has made in market share gains,” he writes.
“We value the group’s debt investments at 0.5x book, a slight discount to trading valuations of Chinese banks (0.7x) taking into account YZJ’s less developed credit controls when compared to banks,” he continues.
In his report, Osman sees weaker-than-expected margins from orders secured during the downturn disappointing contract-win quantum/or significant number of order cancellations; and the execution risk of projects as key downside risks to YZJ’s share price performance.
In a note dated March 27, DBS Group Research has given YZJ a target price estimate of $2.15, which values YZJFH at 0.7x P/B of 77 cents. The remaining shipbuilding-related business is valued at $1.38.
“Assuming fair value of YZJFH at 77 cents, Yangzijiang’s current share price of $1.46, only value shipbuilding-related business at 69 cents per share, implying unwarrantedly low valuation of 0.8x P/B and [an estimated] 6x P/E despite 13% ROE and potential upside to 4% dividend yield,” says the brokerage.
In its note, the brokerage believes that YZJ is set to re-rate closer to its target price of $2.15 following the completion of the spin-off.
If all goes to plan, the listing of YZJFH could be completed by end-April or early May this year, says the brokerage.
As at 4.53pm, shares in YZJ are trading 3 cents higher or 2.055% up at $1.49. — Felicia Tan
Grab Holdings Price target: Maybank Securities “buy” US$4.32
Grab’s risk reward deemed ‘attractive’
Maybank Securities analyst Lai Gene Lih has initiated a “buy” call on Grab Holdings with a target price of US$4.32 ($5.88). The target price offers a potential upside of 30% to Grab’s last-closed share price of US$3.32 as at March 25.
Lai’s report on March 28 comes after the NASDAQ-listed counter saw its shares fall some 70% since its Spac merger in December 2021.
According to the analyst, Grab’s risk-reward is deemed “attractive” in the next 24 months as it strives for profitability.
On Dec 2, 2021, shares in Grab made its debut on the Nasdaq, opening at US$13.06. The counter ended the day with its shares trading at US$8.75, down more than 20%. Lai sees Grab as a beneficiary of the economic digitisation and rising affluence in Southeast Asia and that its superapp model drives strong retention among its users. He also says that the one-year retention of users who use over three offerings stands at a retention rate of 86% compared to the 37% of users who use just one offering. “This makes Grab more efficient with incentives, which we see as key to its ability to achieve profitability over time,” writes Lai.
Grab has given a total of US$80 in incentives per monthly transacting users in 2019; US$74 in 2021 and is expected to give US$65 in 2025. Its strong hyperlocal executive across Southeast Asia’s diverse countries, which allows it to scale its user base, is another positive. “Grab has localised ‘boots-on-the ground’/ app-features/ transport modes, and even has its own proprietary maps and mapping technology to boost transit efficiency,” adds Lai.
In addition, Grab’s mobility offerings reduce travel time for its users compared to public transportation. For instance, it has reduced travel time for 20% of its users in Thailand and 70% in the Philippines. Lai expects the region’s economic reopening to drive the recovery of Grab’s mobility segment.
He continues: “Despite loosening restrictions, Grab observes deliveries becoming integral to daily life (average order value +41%/ transactions per monthly transaction user or MTU +28% versus pre-Covid-19).” Lai has also projected a mobility gross merchandise value (GMV) CAGR of 27% for the FY2021 ended December 2021 to FY2025, and has an estimated normalised deliveries GMV CAGR of 28% for the same period. Normalised deliveries in FY2021 saw a 56% y-o-y increase, he adds.
However, any price wars from Grab’s competitors or higher-than-estimated incentives may hurt Grab’s profitability, warns Lai. “Rising inflation and/or regulatory changes that require pension contributions by Grab to driver-partners could also hurt its path to profitability.” Furthermore, a resurgence of Covid-19 related lockdowns is a risk for mobility. Finally, co-founder Anthony Tan has 63% of voting rights (and owns 6%), which may create risks for minority shareholders who may find it difficult to exercise control over the company’s direction, says Lai. He has forecast GMV and net revenue CAGR of 27% and 31% over FY2021 to FY2025 respectively. “We are projecting Grab to deliver adjusted Ebitda/Patmi break-even by FY2024 and FY2025, respectively,” he says. “As regional economies reopen, stronger than expected mobility segment recovery may be a catalyst.” — Felicia Tan
SIA Engineering Price target: UOB Kay Hian “buy” $2.80
Preferred proxy to ride Singapore’s aviation recovery
UOB Kay Hian analyst Roy Chen has re-initiated a “buy” recommendation on SIA Engineering with a target price of $2.80 as the industry’s recovery is “well on track” and SIA Engineering is positioned in a faster lane of recovery compared to peers whose financial performances are more geared to the relatively laggard passenger volume growth.
Chen adds that SIA Engineering is set to be first among the local aviation-related companies to report positive core earnings, with an earnings estimate of $92 million for the FY2023 ending March 2023, which will be equivalent to 57% of FY2019, the full year before the pandemic hit.
The company is also well positioned to resume dividend payment in as early as FY2023. This is considering its earnings recovery and strong balance sheet carrying some $679 million in net cash. “We do not rule out the possibility of a special payout by FY2024, given its major shareholder Singapore Airlines’ (SIA) cash needs for mandatory convertible bond (MCB) redemption,” Chen adds.
Moreover, SIA Engineering’s various joint ventures across the region are set for recovery too, as airlines contract out more work before the impending pick up heightened demand with full recovery of the aviation industry. This has been made possible with SIA Engineering’s strong business development foundation and ties with the major engine makers, says Chen. Some risks the analyst notes include events that disrupt the sector’s recovery and increase competition for SIA Engineering’s maintenance, repair and overhaul (MRO) business. — Chloe Lim
Singapore Exchange Price target: RHB Group Research “neutral” $10
SGX’s ‘volatile times’ could imply short-term benefit RHB Group Research Shekhar Jaiswal has kept a “neutral” rating on Singapore Exchange (SGX) with an increased target price of $10, from $9.80.
“While we are positive on SGX’s long-term growth prospects from its latest acquisitions and potential pipeline of new listings, we remain concerned about the lack of near-term re-rating catalysts,” he writes. The analyst notes that continued global macroeconomic uncertainty could in fact lead to better-than-expected trading volume in the near term.
With the continuing Russia-Ukraine crisis causing elevated geopolitical tensions, this has in turn created heightened price volatility in global equity markets, with SGX seeing increased trading activity in February.
The securities daily average value (SDAV) increased 21% y-o-y to $1.6 billion, bringing the YTD SDAV to $1.2 billion for FY2022 ending June, in line with the analyst’s FY2022 SDAV estimates of $1.2 billion. SGX’s derivatives segment also saw an uptick in trading activity, with the average daily trading volume (DDAV) of 1.03 million.
In addition, the US Federal Reserve has started the cycle for higher interest rates with a 25 basis points (bps) interest rate hike in the Federal Funds Rate in March. Jaiswal expects another five to six interest rate hikes this year that could create scope for higher treasury income for SGX.
However, Jaiswal has some concerns as the exchange’s cost is “elevated”. Meanwhile, revenue contribution from its recent acquisitions could take time to scale up. There also appears to be stiffer competition from Hong Kong Exchange’s bid to grow its derivatives business which risks taking away trading volume from SGX.
Finally, with the full induction of New York-listed Sea into MSCI Singapore, securities market turnover could remain soft as some trading volume could move away from SGX-listed stocks to Sea.
On the other hand, Jaiswal foresees a number of upside risks that include higher-than-estimated trading volume from the potential pipeline of ETFs, REITs and spac listings. Overall, the analyst views the stock’s valuation as “reasonable” amid modest earnings growth, as it is trading at an FY2022 P/E of 23.4x, above its historical average, while offering a modest yield of 3.3% that is lower than the Straits Times Index’s yield of 4%. — Chloe Lim
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time of esg taggings 0.05141934705898166
https://www.theedgesingapore.com/capital/brokers-calls/sia-engineering-preferred-proxy-ride-singapores-aviation-recovery-uobkh
UOB Kay Hian Research analyst Roy Chen has re-initiated a “buy” recommendation on SIA Engineering with a target price of $2.80, while keeping a “market weight” rating on the overall Singapore aviation sector, as he sees the recovery of the sector as being “well on track”.
See: UOB Kay Hian expects Singapore aviation sector to recover by end-2024, sees SIAEC as top pick to ride on recovery
This is in lieu of increasing flight activities at Changi Airport with the recent relaxation of international restrictions, which Chen believes will outpace the expected passenger volume recovery.
With that, the group is strategically positioned in a faster lane of recovery compared to peers whose financial performances are more geared to the relatively laggard passenger volume growth.
According to Chen, SIA Engineering is set to be the first to regain positive core net profit within the local aviation scene (excluding government grants). “We are now projecting net profit to recover to $92 million in FY2023 ending March 2023, representing 57% of its pre-Covid-19 (FY2019) level,” says the analyst, especially in light of the consistent narrowing of core net losses over the past five quarters. If SIA Engineering keeps up the trajectory, it is expected to report core net profit in the next one to two quarters.
The group is also well positioned to resume dividend payment in as early as FY2023, according to Chen. This is considering its earnings recovery and strong balance sheet, displaying $679 million in net cash. “We do not rule out the possibility of a special payout by FY2024, given its major shareholder Singapore Airlines’ (SIA) cash needs for mandatory convertible bond (MCB) redemption,” Chen says.
Moreover, SIA Engineering engine and components’ joint ventures are set for positive recovery, after also demonstrating resilience during the Covid-19 pandemic, working with airlines and engine original equipment manufacturers (OEMs) to bring forward service volume with the impending heightened demand with full recovery of the aviation industry.
This has been made possible with SIA Engineering’s strong business development foundation, especially with regard to strengthening relationships with global leading engine OEMs for the group to expand its existing engineering capabilities. A prime example would be its acquisition of Malaysia-based SR Technics Malaysia for SIA Engineering to optimise its maintenance, repair and operations (MRO) business.
Some risks the analyst notes include events that disrupt the sector’s recovery and increase competition for SIA Engineering’s MRO business.
As at 10.42am, shares in SIA Engineering are trading flat at $2.47 at an FY2022 P/B ratio of 1.6x on March 30.
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time of esg taggings 0.029766948893666267
https://www.theedgesingapore.com/news/aviation-engineering/sia-reports-highest-ever-cargo-revenue-135-bil-3qfy20212022-cargo-business
Singapore Airlines (SIA) has reported a record cargo revenue of $1.35 billion for the 3QFY2021/2022.
In its update on its cargo business on March 15, the group says this is the first time its revenue for its cargo business has surpassed the $1 billion mark.
During the 3QFY2021/2022, the airlines also reported revenue of $832.8 million for its pax flown segment, and revenue of $132.2 million for its engineering services, other pax and others segment.
In that quarter, the airlines saw cargo yields increase 26.9% y-o-y to 81.5 cents per load tonne-kilometres (LTK).
In its outlook statement, the airline is less buoyant on its figures for the 4QFY2021/2022, saying that it expects overall air cargo demand to ease on the back of the record peak period in the 3QFY2021/2022.
This is in line with seasonal fluctuations, and the traditional slowdown in exports during the Lunar New Year holiday period, says the airline.
Nonetheless, both air and sea freight capacities are expected to remain tight during the quarter, supporting loads and yields, it adds.
In its business update, SIA revealed that it has ordered seven A350F freighters to replace its existing fleet of seven Boeing 747-400F. Deliveries will begin in the four quarter of 2025. According to the airline, the new fleet will reduce its carbon emissions by 400,000 tonnes annually as the A350F burns up to 40% less fuel on similar missions.
As at March 1, SIA flies to 97 destinations on its cargo route network. It has a 36:64 freighter and bellyhold split as at the date, compared to the 21:79 split in the FY2019/2020, pre-Covid-19.
Shares in SIA closed at $5.03 on March 14.
Photo: SIA
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time of esg taggings 0.03180138487368822
https://www.theedgesingapore.com/capital/results/sia-engineering-says-pace-revenue-recovery-uncertain
In a business update, SIA Engineering says with international flight activities continuing to recover with progressive relaxation of border restrictions and establishment of bilateral travel arrangements, the number of flights handled at the Group’s Singapore base was 65% higher year-on-year and 17% higher quarter-on-quarter. While this volume of flights handled is only at 31% of pre-pandemic volume, the continuing recovery trend is encouraging, the company says.
According to the company, with this recovery, demand for transit services and aircraft return-to-service work increased while demand for aircraft preservation work reduced as more aircraft return to service. At Base Maintenance, more aircraft maintenance checks were performed during the quarter as compared to last year, but the work content of these checks was lighter as a higher proportion of the checks performed were for young new-generation aircraft. The Engine Services Division formed at the start of the financial year is making progress in growing its suite of engine-related capabilities. Its new facility to provide quick turn maintenance on CFM LEAP engines will start operations towards the end of this financial year.
During the three months to Dec 31, 2021, longterm contracts were signed to provide CFM LEAP engine testing services to Safran Aircraft Engines and expanded on-wing services for Rolls-Royce Trent engines. Preparations to strengthen these capabilities are in progress before the engine maintenance activities commence and will gradually pick up in the next financial year. With higher flying activities, business volume at SIA Engineering's joint venture companies is also gradually recovering. Total engine inductions and shipments at our engine JVs is about 25% below the pre pandemic level.
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time of esg taggings 0.030279495054855943
https://www.theedgesingapore.com/news/aviation-engineering/sia-first-world-operate-new-a350f-variant-after-finalising-order-airbus
Singapore Airlines (SIA) has finalised a purchase agreement with Airbus for seven A350F freighter aircraft to replace its existing 747-400F fleet, with an option for five more.
Back in December 2021, SIA had revealed it signed a provisional agreement to buy the freighters, and with this deal, the airline becomes the first in the world to operate the new variant when deliveries complete in 20225
The deal was signed at the Singapore Airshow between SIA CEO Goh Choon Phong, and Airbus Chief Commercial Officer and Head of International Christian Scherer.
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https://www.theedgesingapore.com/news/aviation-engineering/singapore-airlines-signs-377-bil-contract-general-electric-22-ge9x-engines
Singapore Airlines (SIA) has inked a contract valued at US$2.8 billion ($3.77 billion) with General Electric (GE) on Feb 16.
The contract is for an additional order for 22 of GE’s GE9X engines to power the airline’s fleet of Boeing 777-9 aircraft.
The contract also includes an order for GE’s TrueChoice services for 12 years.
article_here
https://www.theedgesingapore.com/news/company-news/sia-engineering-sets-new-unit-grow-component-repair-business
SIA Engineering Company Limited has set up the new Component Services Division (CSD) to grow its component maintenance, repair and overhaul (MRO) business.
Effective from April 1, all existing component repair and fleet management services, which include inventory technical management services, will be consolidated under CSD.
CSD will focus on growth through acquisition and development of new capabilities, thereby broadening the company’s range of service offerings to airline customers and deepening its partnerships with original equipment manufacturer (OEMs), reads a Feb 11 press release.
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time of esg taggings 0.03682866203598678
https://www.theedgesingapore.com/news/aviation-engineering/sia-engineering-signs-10-year-line-maintenance-and-field-services
SIA Engineering Company (SIAEC) has signed a 10-year agreement with Rolls-Royce to provide line maintenance and in-field services for Rolls-Royce Trent 7000, 1000, 900, 800, 700, 500 and XWB engines.
In an announcement, SIAEC said it will provide in-field services at its facilities for Rolls-Royce customers in Singapore including Singapore Airlines, supported by solutions through its global line maintenance network.
The new agreement is an extension of SIAEC’s existing on-wing care services with Rolls-Royce, covering On-Wing Support, Borescope Inspections, Engine Changes and Engine Build-Up services for the Rolls-Royce Trent 1000, 900, 800 and 700 engines. It will be expanded to include new capabilities for the Trent 7000 and Trent XWB engines.
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time of esg taggings 0.02549043414182961
https://www.theedgesingapore.com/news/aviation-engineering/sia-issues-us600-mil-worth-notes-3375-pa-coupon
Singapore Airlines (SIA) has launched and priced US$600 million ($809.3 million) worth of Series 010 notes on Jan 13.
The USD-denominated notes will be issued at an issue price of 99.273% of their principal amount. They will come in denominations of US$200,000 and in integral multiples of US$1,000.
The notes will bear interest at a fixed rate of 3.375% per annum, payable semi-annually in arrear.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/uobkh-adds-mm2-siaec-and-venture-its-alpha-picks-takes-profit-brc-asia-and
UOB Kay Hian has added MM2, SIA Engineering Company (SIAEC) and Venture Corporation to its alpha picks portfolio for the month of April.
To the analysts, MM2 should benefit from seeing higher capacities at its cinemas and live performances on the back of the relaxed measures, while SIAEC is leveraged to the airlines’ increased activity at Changi Airport in the wake of easing travel rules.
Venture was always chosen for its “robust demand outlook” as well as its attractive valuations.
On the other hand, counters such as BRC Asia and Yangzijiang (YZJ) have been removed from the alpha portfolio as the team has chosen to take profit on them.
BRC Asia, which has seen its share price increase by 11.4% since its inclusion in the portfolio, saw its shares re-rate after it released its results for the 1QFY2022 ended December.
“While we remain bullish on BRC for the long term, we remain cautious due to short-term headwinds such as rising steel prices,” says the team in its April 4 report.
YZJ has also seen its shares increase some 52.5% since its inclusion in the brokerage’s alpha picks.
“While we continue to like YZJ, we believe that near-term catalysts remain scarce and would look to re-enter at lower levels,” the team adds.
Overall, the brokerage’s alpha picks portfolio rose 6.3% m-o-m and outperformed the benchmark Straits Times Index (STI), which rose 5.1% m-o-m.
Key stocks that outperformed were Sembcorp Marine (SembMarine), YZJ and Ascott Residence Trust (ART), which rose 18%, 11% and 10% m-o-m respectively.
However, the portfolio underperformed on a quarterly basis, with it being up 5.3% in the 1QFY2022, compared to the STI’s 9.1% q-o-q growth. The STI was the performing Asian index during the same quarter.
The analysts have given “buy” calls on MM2, SIAEC and Venture Corp with target prices of 12 cents for MM2, $2.80 for SIAEC and $22.80 for Venture Corp.
They are also keeping “buy” on BRC Asia and YZJ.
The STI closed 2.14 points lower or 0.06% down at 3,416.97 points on April 4.
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time of esg taggings 0.028400206938385963
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-brc-asia-ifast-corp-digital-core-reit
BRC Asia
Price target:
CGS-CIMB “add” $2.10
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time of esg taggings 0.023387209977954626
https://www.theedgesingapore.com/capital/brokers-calls/brc-asia-sees-strong-start-fy2022-phillip-securities
Analysts from CGS-CIMB Research and Phillip Securities Research have maintained their 'add' or 'buy’ ratings on steel supplier BRC Asia after the company exceeded expectations with its results for the 1QFY2022 ended December.
On Feb 10, BRC Asia reported a profit after tax of $13.3 million in its business update for the quarter.
On this, CGS-CIMB Research analysts Ong Khang Chuen and Kenneth Tan have kept their target price unchanged at $2.10. Phillip Securities analyst Terence Chua has, too, kept his target price at $1.84.
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time of esg taggings 0.024584237951785326
https://www.theedgesingapore.com/capital/results/brc-asia-reports-profit-after-tax-133-mil-1qfy2022
In its business update, BRC Asia has reported profit after tax (PAT) of $13.3 million in the 1QFY2022 ended December.
During the quarter, the steel supplier recorded revenue of $357.4 million.
Gross profit for the 1QFY2022 stood at $26.3 million.
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time of esg taggings 0.02898019179701805
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-del-monte-cordlife-comfortdelgro-megachem-rex-international
Del Monte Price target: PhillipCapital “buy” 63 cents
Price upgrade on higher earnings expectations
PhillipCapital analyst Vivian Ye has maintained her “buy” recommendation on Del Monte Pacific with a higher target price of 63 cents from 62 cents previously.
Ye’s recommendation on March 15 comes as the dual-listed F&B company saw earnings of US$25.9 million ($35.3 million) for the 3QFY2022 ended January, which exceeded her expectations at 29% of her full-year forecasts.
The quarter’s gross profit, however, came in lower than expected due to inflationary pressures, writes Ye.
On this, Ye has upped her patmi estimates for the FY2022 by 7.5% as she lowers her forecasts for operating and interest expenses in line with the trend seen in Del Monte’s 9MFY2022 results.
Her revised target price is now pegged to 12x FY2022 P/E, down from 13x.
Looking ahead, Ye expects margins for Del Monte Foods (DMFI), the US subsidiary of Del Monte to recover in the 4QFY2022.
“DMFI has continued to increase its market share in the US in various categories, through expanding distribution channels, and building the Del Monte brand”, writes Ye in her report.
“This ensures its pricing power, which protects the bottomline, especially in the current inflationary environment ... DMFI would also continue its emphasis on innovation, with items launched in the past three years on track to reach 8.5% of DMFI’s total sales in FY2023,” she adds.
In addition, Ye is also positive on Del Monte Philippines (DMPI) as remains market leaders in key categories such as canned vegetable, canned fruit, canned tomato and fruit cup snack.
“DMPI is continuing to strengthen its competitive position of the brands and drive core category growth in key channels and segments,” she continues. — Felicia Tan
Cordlife Price target: Soochow CSSD Capital Markets “buy” 47 cents
“Interesting target to be privatised”
Soochow CSSD Capital Markets analyst Simeon Ang is maintaining his “buy” recommendation on Cordlife Group with an unchanged target price of 47 cents after its FY2021 results surpassed Ang’s lowered expectations.
For the FY2021 ended December 2021, Cordlife’s revenue and NPAT stood at 103% and 132% of Ang’s trimmed expectations on the back of a h-o-h growth in its overall performance.
During the 2HFY2021, Cordlife’s revenue grew 3.3% y-o-y to $29.4 million as contributions from its banking and diagnostics segments increased.
“While we believe that FY2022 may continue to be a start-stop year for Cordlife, [its] FY2022 revenue [and] earnings per share (EPS) should continue its recovery with 15% [and] 1% growth [respectively],” writes Ang in his March 15 report.
In his report, Ang posits Cordlife as an interesting target to be privatised given the low net-investment outlay of less than $40 million, which includes a takeover premium of around 20% at its current prices.
“While management continues to explore strategic opportunities with other cord blood banks, we believe that mergers and acquisition (M&A) activities may focus on diagnostics, which would be in-line with management’s organic expansion plans,” writes Ang.
He adds that it would make sense for the group to list in Hong Kong instead, following the inclusion of Yiu Ming Yiu, who took up a board seat in Cordlife after TransGlobal’s acquisition of 71.5 million shares at 52 cents apiece.
Yiu is the son of TransGlobal’s principals.
Ang’s current target price values the group at an undemanding FY2022 ex-cash P/E of 5.5x.
“Our valuation takes into consideration the lifetime value of $118.15 per client, derived from implied average selling prices (ASPs) and expected acquisition costs/client,” he explains.
“Our FY2022 forecasted cash and near-cash assets amounts to $89.6 million or [around] 95% of [Cordlife’s] current market cap,” he adds.
Potential catalysts, according to Ang, include potential mergers and acquisitions (M&A) and, or the possibility of privatisation.
“A key risk to our forecasts would be further lockdowns across key markets, affecting both parents’ willingness to have babies and reducing marketing channels,” says Ang. — Felicia Tan
ComfortDelGro Price target: Maybank Securities “buy” $1.76
FY2021 marks beginning of stronger recovery
Maybank Securities analyst Eric Ong has kept “buy” on ComfortDelGro (CDG) as he sees the transport operator of buses, trains and taxis, remaining as a good proxy to the reopening of borders and the rising economic activity.
“In our view, FY2021 marks the beginning of a stronger recovery as [CDG’s] public transport services continue its sequential improvement, while its taxi business has also turned around in 4QFY2021,” Ong writes in his March 10 report. The company has a December year-end.
“The group has a rock-solid balance sheet with a net cash position of $519.8 million at end December 2021. The group just declared a final DPS of 2.1 cents, taking FY2021 DPS to 4.2 cents (from FY2020’s 1.43 cents), which translates into a sustainable payout ratio of 70%.”
Ong also believes CDG’s position will improve further as rail ridership in Singapore, as well as its bus charter services in Australia and coach services in the UK, continue to recover in tandem with the higher social mobility. “The taxi segment should also perform better on lower rental rebates as driver incomes are likely to improve on easing Covid-19 restrictions and resumption of international travel.”
On Feb 8, CDG announced that it would be raising its taxi fares in Singapore from March 1. Flagdown fares across its fleet of taxis will increase by 20 cents, while distance-timed rates will see a two-cent increase for every 400m, or 350m after 10km. There will also be a two-cent increase for every 45 seconds of waiting time for normal taxis.
However, Ong’s target price has been lowered to $1.76 from $1.88 previously on the back of lowered EPS estimates for the FY2022 to FY2024. Following the fare hike, the analyst has also lowered his EPS estimates to factor in the increments, from 11.2 cents for the FY2022 as at Maybank’s last report on Aug 15, 2021, to 8.6 cents in this report.
The updated EPS estimates will also take into consideration the tapering of government reliefs as well as more conservative Ebit margins due to higher energy and staff costs, says Ong. He also says that a quicker-than-expected stabilisation in the taxi industry is an upside for CDG. An overseas acquisition that is accretive to the transport operator’s earnings, as well as higher-than-expected passenger numbers for Singapore rails on the North-East Line and Downtown Line or new bids for railway lines under contract model are also upside factors.
Meanwhile, one downside identified include the higher-than-expected operating cost given the current inflationary pressures. “A decline in taxi utilisation or heightened competition (fares and for drivers) from ride-hailing players [and] slower-than-expected recovery in ridership for its public transport services [are also downsides to CDG].” — Felicia Tan
Megachem Price target: SAC Capital “buy” 58 cents
Higher target price on better sales
SAC Capital analyst Lam Wang Kwan remains positive on Megachem with a “buy” call after the chemicals company saw a record year.
For its FY2021 ended December, Megachem’s revenue increased by 32% y-o-y to $140.3 million, while its bottom line was up 52% y-o-y to $8 million, surpassing Lam’s full-year forecasts by 5.4% and 25% respectively.
Going into FY2022, Lam has raised his topline estimates for the year by 4.4% as he expects sales to remain elevated, driven by demand. Lam also expects the chemicals company’s growth momentum to sustain into 2HFY2022 driven by backlog as customers are restocking their inventories that were depleted during the pandemic. The surge in demand for chemicals as economic activities pick up across the world are another growth factor, he writes in his March 11 report. The analyst has also upped his target price estimate to 58 cents from 55 cents previously, as he expects Megachem’s growth momentum to sustain albeit at lower margins.
“Global economic growth is estimated to be at [around] 4.4% and growth in emerging and developing Asia is at [around] 5.9% for 2022. However, we expect the exceptional operating margins to moderate to [an estimated] 5.7% in FY2022 and normalise further to 5.1% in FY2023,” writes the analyst in his March 11 report.
“Overall, our FY2022 bottom line estimates still increased by 23%,” he adds. Lam’s higher target price translates into an FY2022 10.3x P/E and 1.2x P/B.
In addition to the continuous tailwinds, Lam sees Megachem as being adaptable to changing demand. “Megachem supplies a wide range of specialty chemicals used in many industries, and this insulates it from the vagaries of any single sector.”
The chemicals company benefitted from a surge in demand for specialty chemicals driven by cleaning and disinfection, technology and healthcare sectors in the FY2020.
In FY2021, Megachem saw growth coming from the flavours, fragrance, construction and electronics sectors, says Lam. “Through its diversified sector and geographical coverage, Megachem has demonstrated that it is able to make quick adjustments to meet changing demand and supply to industries that are experiencing growth. The new Malaysia warehouse, which is near completion, will further expand Megachem’s capability. We believe the new warehouse can ride on the semiconductor sector growth in Malaysia.” — Felicia Tan
Rex International Price target: KGI Securities “outperform” 54 cents
‘Rolling like the good old times’
Analysts from KGI Securities are maintaining their “outperform” stand on oil explorer and producer Rex International with a significantly higher target price of 54 cents from 40 cents earlier, analysts Joel Ng and Chen Guangzhi write in a research note.
Their move comes as Rex International is seen to be “rolling like the good old times,” as oil prices tend upwards. For FY2021 ended Dec 31, Rex reported earnings of US$78.9 million ($107.6 million), with oil prices averaging at US$67 per barrel. In contrast, Rex was US$15.2 million in the red for FY2020, when oil averaged at US$34 per barrel.
Rex International is in the business of oil production and exploration and has concessions in Norway and Oman. “Brent is now trading at the levels when oil & gas companies were partying like there was no tomorrow, in 2012 and 2014,” observe Ng and Chen, referring to recent prices of as high as US$130.
While the price of oil when demand destruction starts to set in is quite varied, market estimates put it between US$120 to US$150. Ng and Chen reckon that US$90 to US$110 per barrel is “the sweet spot to maintain healthy dynamics in the sector”.
Meanwhile, Rex International is set to enjoy higher production soon once upgrading works at its site in Yumna are complete. The site was shut for 24 days in Feb and Mar for the changing of the floating storage tanker.
While the replacement is only likely to increase production from 2HFY2022, Ng and Chen say it will have some impact on the company’s revenue and earnings in the ongoing 1HFY2022.
The analysts add that any impact from the downtime during the upgrading works will be offset by higher average oil sales prices, revenue and profits from the Barge field in FY2022 ending in December.
Additionally, contributions are also expected to come from the company’s acquisition of a 33.84% stake in the oil producing Barge Field in Norway.
“Beginning January 2022, revenue and profits will be fully recognised by Rex in its profit and loss statement, which we have factored into our FY2022 to 2024 forecast,” the analysts write.
Going forward, the company will have two production sharing contracts in offshore Malaysia. This will be its maiden oil field project in Asia and will provide a great opportunity for the company to expand its oil reserves and diversify its source of cash flows, say Ng and Chen.
For now, the duo have not factored in the Malaysian production sharing contracts into their valuation for they are awaiting more visibility on Rex International’s exploration plans. — Amala Balakrishner
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time of esg taggings 0.061435255920514464
https://www.theedgesingapore.com/capital/brokers-calls/sac-capital-lifts-megachems-tp-58-cents-elevated-sales-due-higher-demand
SAC Capital analyst Lam Wang Kwan is remaining buoyant on Megachem with a “buy” call after the chemicals company saw a record year.
For the FY2021 ended December, Megachem saw its topline grow 32.0% y-o-y to $140.3 million, while its bottom line surged 52.0% y-o-y to $8.0 million, surpassing Lam’s full-year forecasts by 5.4% and 25.0% respectively.
Going into FY2022, Lam has raised his topline estimates for the year by 4.4% as he expects sales to remain elevated, driven by demand.
He expects the chemicals company’s growth momentum to sustain into 2HFY2022 driven by backlog as customers are restocking their inventories that were depleted during the pandemic. The surge in demand for chemicals as economic activities pick up across the world are another growth factor, writes Lam in his March 11 report.
As such, the analyst has upped his target price estimate to 58 cents from 55 cents previously, as he expects Megachem’s growth momentum to sustain albeit at lower margins.
“Global economic growth is estimated to be at [around] 4.4% and growth in emerging and developing Asia is at [around] 5.9% for 2022. However, we expect the exceptional operating margins to moderate to [an estimated] 5.7% in FY2022 and normalise further to 5.1% in FY2023,” writes the analyst in his March 11 report.
“Overall, our FY2022 bottom line estimates still increased by 23.0%,” he adds. Lam’s higher target price translates into an FY2022 P/E of 10.3x and P/B of 1.2x.
An adaptable business
In addition to the continuous tailwinds, Lam sees Megachem as being adaptable to changing demand.
“Megachem supplies a wide range of specialty chemicals used in many industries, and this insulates it from the vagaries of any single sector,” writes the analyst.
To be sure, the chemicals company benefitted from a surge in demand for specialty chemicals driven by cleaning and disinfection, technology and healthcare sectors in the FY2020. In FY2021, Megachem saw growth coming from the flavours, fragrance, construction and electronics sectors, notes Lam.
“Through its diversified sector and geographical coverage, Megachem has demonstrated that it is able to make quick adjustment to meet changing demand and supply to industries that are experiencing growth. The new Malaysia warehouse, which is near completion, will further expand Megachem’s capability. We believe the new warehouse can ride on the semiconductor sector growth in Malaysia,” he adds.
Shares in Megachem closed flat at 48 cents on March 14.
Photo: Stock image
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time of esg taggings 0.037277662893757224
https://www.theedgesingapore.com/capital/results/megachem-reports-2hfy2021-earnings-4-mil-645-y-o-y
Chemicals company Megachem has reported earnings of $4 million for 2HFY2021 ended Dec 2021, up 64.5% y-o-y. Revenue in the same period was up 37.1% y-o-y to $73 million.
For the whole of FY2021, earnings grew by 51.4% y-o-y to $7.76 million, on the back of 32% increase in revenue to $138.9 million.
The company attributes the higher numbers to both a higher volume of chemicals sold, as well as higher selling prices.
Megachem plans to pay a final dividend of 1.2 cents per share, bringing full year FY2021 payout to 2 cents. For FY2020, the company paid 1.5 cents in total.
Sidney Chew, the company’s managing director is upbeat about this year’s business.
We believe 2022 is the dawn of a new growth cycle for the chemicals industry that will provide many opportunities to elevate our business further, barring any unforeseen headwinds to the global economic recovery,” he says.
“We will continue building on our strong foundations to capitalise on opportunities and realise our potential,” he adds.
Megachem shares last traded at 43 cents.
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article_here
time of esg taggings 0.028728325152769685
https://www.theedgesingapore.com/capital/insider-moves/largest-shareholder-appt-sees-stake-rise-megachem-md-chew-buys-more
Dai Yung Huei, the largest shareholder of Asian Pay TV Trust (APPT), has seen his stake in the business trust rise via a series of open market purchases since late last year.
The most recent acquisitions were made on Jan 18 when Araedis Investment, which Dai and his wife Wang Hsueh-Mei controls, acquired 200,000 units at 13.8 cents each and another 740,000 units at 13.9 cents.
With the purchases, Dai and Wang have a deemed stake of nearly 328.1 million units, equivalent to 18.163%. Based on the series of filings made by the company, Araedis has been actively buying since late last year.
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https://www.theedgesingapore.com/capital/results/okps-net-profit-halves-revenue-rises-293-fy2021
OKP Holdings reported a 29.3% increase in revenue to $90.0 million for FY2021, for the year to Dec 31, compared to $69.6 million in FY2020, mainly due to higher contributions from the construction and maintenance segments as well as an increase in rental income. However, net profit more than halved to $1.5 million in FY2021, from $3.3 million in FY2020. The overall increase in the Group’s revenue in FY2021 was largely due to increases of 22.8% and 53.1% in revenue from the construction segment and maintenance segment respectively, as well as a 11.9% increase in rental income. The increases in the construction and maintenance segments’ revenue to $56.5 million and $26.4 million respectively, were mainly due to the higher percentage of revenue recognised from a number of existing and newly awarded construction and maintenance projects during FY2021, a clear sign of recovery from lower activities in FY2020 due to temporary cessation of construction activities in compliance with the government’s COVID-19 measures. The construction and maintenance segments are the major contributors to the Group’s revenue, representing 62.8% and 29.3% of the Group’s FY2021 revenue, respectively.
The Group’s rental income from investment properties continued to see positive growth, improving 11.9% to S$7.1 million in FY2021 as compared to $6.3 million in FY2020. Overall, the Group’s rental income contributed 7.9% to the Group’s total revenue in FY2021. The increase in rental income generated from investment properties was due mainly to rental income generated from the property at 6-8 Bennett Street, East Perth, Western Australia, as well as rental income from the newly acquired investment properties at 35 Kreta Ayer Road, and 69 and 71 Kampung Bahru Road.
OKP's gross profit dipped by 7.9% to $6.8 million in FY2021 from S$7.4 million in FY2020 whilst gross profit margin decreased by 3.1 percentage points to 7.5%. The lower gross profit margin for FY2021 was largely due to lower profit margins for new and current construction and maintenance projects as a result of the increase in overheads, prices of materials and rising manpower costs. Other gains had decreased by $3.0 million to $7.7 million in FY2021, from $10.7 million in FY2020. The decrease was mainly due to the decrease in receipt of payouts and rebates from the government, a one-off reversal of impairment allowance following the disposal of a former associated company in FY2020 which did not recur in FY2021, a decrease in interest income and a decrease in the gain on foreign exchange, partially offset by an increase in net fair value gain.
article_here
time of esg taggings 0.029298882000148296
https://www.theedgesingapore.com/news/company-news/pavillon-holdings-raises-429-mil-share-placement-hotel-management-and-investment
Pavillon Holdings has entered into a subscription agreement with New Development Hotel Management on March 9, where the latter will subscribe for $42.94 million or RMB200 million worth of new ordinary shares in the former.
Under the agreement, Pavillon Holdings will issue some 1.047 billion new shares at the subscription price of 4.1 cents apiece.
The amount will be paid in RMB, and will be used to fund the operations of Fengchi IOT Management, including the payment of suppliers as well as creditors of Fengchi IOT.
New Development Hotel Management, a Singapore-incorporated company, is primarily in the business of hotel management. It is also an investment holding company. It also has a 100% stake in a real estate development subsidiary incorporated in the US.
Its sole shareholder and director is Shanghai-based investor, Ding Furu.
Ding has investments in various industries, including property development and hotel ownership and development. Through his investments, he has majority interest in a public company listed on the Shanghai Stock Exchange, Vohringer Home Technology and is also the owner of various hotel properties in the PRC including Courtyard by Marriott Shanghai Fengxian, The JW Marriott Hotel Shanghai Changfeng Park and Fairfield by Marriott Shanghai Jing’an.
As at March 9, Ding holds a 0.05% stake – or 190,200 ordinary shares – in Pavillon Holdings. He is also a shareholder of Fengchi IOT through Jinmao.
Fengchi IOT is a joint venture (JV) between Pavillon Holdings’ subsidiary, Pavillon Financial Leasing, and Ding through Jinmao. Pavillon, through its subsidiary, owns a 49% stake in the JV, while Jing owns the remaining 51% through Jinmao.
Shares in Pavillon last traded at 2.2 cents before its trading halt on the morning of March 7.
article_here
time of esg taggings 0.02814215887337923
https://www.theedgesingapore.com/news/company-news/former-metal-component-engineering-ventures-healthcare-metaverse
Metal Component Engineering (MCE) is venturing into the healthcare metaverse after acquiring a host of new businesses and attracting new investors. To signal its entry into the patient aftercare business, MCE has also changed its name to Meta Health.
Last July, MCE announced the acquisition of an 85.07% stake in healthcare and pharmaceutical e-commerce firm Gainhealth for $4.25 million. Meta Health also acquired a 70% stake in Gaido Digital Medika, 10% stake in MedTel Healthcare and 17.28% stake in social commerce company Adazal. It also started a joint venture with MNR Food for the development and distribution of clinical nutrition products.
“The thing about the healthcare industry is that it is huge. We don’t have any real limit to the number of companies that can be in this industry because the size of it is just very big,” says Dr Vas Metupalle, chief medical officer of the company’s healthcare arm 5Digital, in an interview with The Edge Singapore.
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time of esg taggings 0.02625683695077896
https://www.theedgesingapore.com/capital/restructuring/metal-component-engineering-changes-name-meta-health-changes-focus-healthcare
Catalist-listed Metal Component Engineering announced that its shareholders have approved the company’s proposed name change to Meta Health Limited, following the company’s extraordinary general meeting held on Jan 17. This name change will come into effect from Jan 17.
This move is in line with the company shifting its business direction towards the healthcare and e-commerce industry. Its diversification started in 2021, where it took steps to diversify its business offerings beyond mechanical manufacturing solution and invested actively in target companies operating in the health and wellness sectors, as well as e-commerce business.
In response to its new focus, the group is also welcoming the appointment of Dr Bernard Ng Kee Huat as an executive director of 5Digital, the group’s digital health platform.
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time of esg taggings 0.027269253972917795
https://www.theedgesingapore.com/news/equity-raising/adventus-holdings-raise-31-million-placement
Adventus Holdings plans to raise net proceeds of nearly $3.1 million by placing out 501 million new shares at 0.63 cents each.
The company wants to increase its working capital so that it can better support its existing projects in Vietnam.
The placement price is a 10% discount off its volume weighted average price of 0.7 cents on March 30.
Upon completion of the placement, the company’s share base increase by around a quarter to 2.45 billion shares.
The placement is managed by SAC Capital.
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time of esg taggings 0.046355484053492546
https://www.theedgesingapore.com/news/ma/aei-corp-changes-name-ascent-bridge-fully-acquire-mtbl-global-169-mil
AEI Corp has received shareholders' approval to change its name to Ascent Bridge, following its extraordinary general meeting (EGM) held on March 3.
This is to better reflect the company’s focus on its new business, diversifying into the production, sale and distribution of food and beverages (F&B). The company had previously struggled with its aluminium parts business.
In the recent EGM, Ascent Bridge had also received shareholders' approval to acquire 100% shareholding interest in MTBL Global for an aggregate consideration of $16,965,000.
MTBL is principally engaged in the promotion, sale and distribution of Moutai Bulao 125ml liquor products outside of Mainland China. Moutai Bulao is a 53° Baijiu famously used for toasts at Chinese state banquets, the company said.
It is produced by Guizhou Moutai Winery (Group) Health Wine Co, a wholly-owned subsidiary of China Guizhou Moutai Wine Factory Co (GZMT Group) in China’s Guizhou province.
GZMT Group is the controlling shareholder of Kweichow Moutai Co, one of the world’s most valuable spirits brands, according to valuation consultancy Brand Finance.
Aside from distributing the Moutai Bulao 125ml liquor products wholesale to liquor stores, MTBL also develops and manages liquor distribution and sales channels.
MTBL has been stepping up its efforts to expand its presence in the overseas market by signing distribution agreements to appoint local distributors of Moutai Bulao in Singapore, Malaysia, Cambodia, Laos, Saipan, Macau and Hong Kong.
Ascent Bridge chairman and CEO Sun Quan said Chinese Baijiu is experiencing growing demand in the overseas market and there is huge potential for growth. “Our brand identity puts us in an advantageous position to benefit from this positive trend. Going forward, we are driven to grow the new business and make it a success to deliver sustainable long term shareholder value,” said Quan.
MTBL intends to establish up to 16 cultural centres and experience centres in major cities worldwide with an aim to create awareness for Moutai Bulao and the Chinese Baijiu drinking culture and build the appreciation of Baijiu among the consumers.
These centres will provide consumers with a deeper understanding of how Chinese Baijiu and Moutai Bulao liquor are made through the demonstration of the unique distillation and fermentation processes.
Currently, MTBL operates one cultural centre in Singapore established in 2019 — the first MTBL cultural centre outside China.
MTBL also plans on tapping its smart vending machines to sell its products in F&B establishments to further penetrate the Baijiu market.
By leveraging the data collected by the smart vending machines, MTBL plans to implement a smart logistics supply chain to automatically order supplies when stocks run low based on real-time sales updates. It seeks to streamline and enhance its liquor distribution channels worldwide by using this data-driven digital platform to optimise its shipping, freight allocation and central order planning.
MTBL has deployed 42 smart vending machines in Singapore. The company is actively pursuing its plans to introduce the smart vending machines in Singapore and overseas Chinese restaurants.
As part of its expansion plans, MTBL plans to establish liquor distribution channels in up to 39 cities in the coming five years and is currently building distribution channels in Singapore, Hong Kong, Macau, Saipan, Laos, Cambodia and the US.
Shares in Ascent Bridge traded flat on March 16 at $1.
Photo: Albert Chua/The Edge Singapore
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https://www.theedgesingapore.com/news/equity-raising/eneco-energy-aims-raise-157-mil-placement
Eneco Energy, which used to be called Ramba Energy, plans to raise some $15.7 million in net proceeds to pay debt and fund new growth.
Under the proposed placement, the company plans to issue up to 1.66 billion new shares at 0.9 cents each and up to 1.66 billion detachable, transferrable warrants at 0.1 cents each.
The placement price of the new shares is a discount of 66% off the company’s volume-weighted average price of 2.65 cents on Feb 28, which was the last market day before trading suspension was called.
As Ramba Energy, the company’s focus was focused on oil exploration. As Eneco Energy, its new focus is in logistics.
The placement is managed by SAC Capital.
According to Eneco Energy, the discount was given to account for factors including the “negative market sentiment and perception” of the company since it was placed on the watch list by SGX on Dec 4 2019.
The discount was also because of the ongoing Russia-Ukraine war which has adversely impacted the global economy and investors’ sentiments, as well as the company’s operations from rising fuel price.
On March 8, Eneco Energy sold a subsidiary called Ramba Energy Investments to Indonusa oil for US$1.
For FY2021 ended Dec 31 2021, the company reported earnings of $1.56 million, down 87.7% from the preceding FY2020.
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time of esg taggings 0.026230569928884506
https://www.theedgesingapore.com/capital/global-stocks/kicking-our-2022-top-10-global-portfolio
The 2022 global portfolio of The Edge Singapore features 10 stocks that were extensively and thoroughly filtered to suit varying investor profiles, distinguished by the level of risk.
To recap, our portfolio of 10 stocks was incepted on Jan 24, 2020, which returned 98.1% for the year ( See Issue 917 ). These 10 stocks were equally allocated to a US$100,000 ($134,437.50) virtual portfolio and were sold on Jan 25, 2021, following which on Feb 18, 2021, our 10 stock picks for 2021 were added to the portfolio ( See Issue 972 ). The 10 stocks in our 2021 portfolio were sold on Jan 26 ( See Issue 1020 ), of which the 2021 portfolio included a few transactions of relatively short-term stocks.
Our 2022 portfolio this year started on Feb 7 with US$224,115, as mentioned in the previous issue. Table 1 shows the allocation for the 10 stocks for our virtual portfolio, which we have attempted to equally allocate, using closing prices from Feb 7. It is to note that as per our previous portfolios, we will not account for transaction costs and exchange rate fluctuations in tracking the performance of our portfolio. Dividends and capital changes to the stocks, on the other hand, will be accounted for in tracking the performance of the portfolio.
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https://www.theedgesingapore.com/issues/global-stocks/our-top-10-global-stocks-2022
Even as economies recover amid the pandemic, markets are signalling loud and clear that the easy gains are behind. Here’s our 10 global stock picks for this year
A s part of our annual tradition for the Lunar New Year, we have picked 10 stocks for our virtual global portfolio outside Singapore. The Edge Singapore’s virtual global portfolio of 10 stocks was created in 2020, in which the portfolio averaged 98.1% returns for that year, strongly outperforming comparable benchmarks. In 2021, this portfolio returned 13.1% and although it was not the best performer, it was still ahead of most comparable benchmarks. Since its inception, this global portfolio is well ahead of comparable benchmarks as illustrated in Chart 1 .
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https://www.theedgesingapore.com/capital/global-markets/here-are-markets-top-trades-after-hawkish-powell
From favouring Asian stocks and quality small-cap shares to betting on flatter yield curves, strategists are mapping out their best trade ideas after Federal Reserve Chair Jerome Powell set the stage for raising interest rates to combat the highest inflation since 1982.
Some warned of further volatility ahead for global equities, especially high-priced technology shares, while others called for a stronger dollar and higher bond yields. US stocks surrendered gains and Treasury yields surged as markets perceived Powell’s comments as hawkish.
Here are selected comments on what’s next for global markets following the Fed:
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https://www.theedgesingapore.com/capital/deals-joint-ventures-alliances/place-holdings-and-smrts-stellar-lifestyle-collaborate
The Place Holdings has entered into a non-binding memorandum of understanding (MOU) with Stellar Lifestyle, a business arm of SMRT Corporation, to jointly collaborate to shape the future of digital media and tap new opportunities in the digital economy.
Stellar Lifestyle is the largest managing agent of retail and advertising spaces in Singapore’s rail network.
As part of the collaboration, both parties aim to build Singapore’s first Sky Screen, a suspended video screen. The Sky Screen is envisaged to be a new attraction in Singapore that will be integrated with smart digital technology system and immersive media, boosting new business vibrancy and creating new possibilities in digital media solutions.
The idea of the Sky Screen is inspired by the iconic Shimao Tianjie Sky Screen, which is one of the largest sky screens in Asia. It has established a strong brand and continues to be a popular platform for various events, advertisements and media.
This deal comes on the back of The Place Holdings entering into a separate MOU to undertake two acquisitions that includes the licensing of the intellectual property rights for the use in the operation and management of Shimao Tianjie Sky Screen and the acquisition of certain assets and businesses relating to Shimao Tianjie Sky Screen.
Ji Zenghe, executive chairman of The Place Holdings says: “Through this strategic collaboration, we aim to combine our unique complementary strengths in enhancing smart commuting and creating innovative digital media solutions within this ecosystem.”
“With the Sky Screen’s visual extravaganza and technology features, we aim to contribute to the vibrancy and diversity of Singapore’s retail and tourism landscape by creating unique and engaging experiences. Together with Stellar Lifestyle’s extensive touchpoints across Singapore, there are significant opportunities to continuously improve our service offerings and experience to targeted audiences and to redefine the future of digital media solutions,” he adds.
Meanwhile, Seah Moon Ming, chairman of SMRT Corporation says: “As a financial, aviation and technology hub, Singapore is one of the most connected countries in the world. It is a good springboard for The Place Holdings and Stellar Lifestyle to showcase the convergence of 5G, new technologies and media concepts to bring greater value to businesses and consumers.”
Shares in The Place Holdings closed flat at 8.3 cents on March 31.
Photo: The Place Holdings
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time of esg taggings 0.04993613110855222
https://www.theedgesingapore.com/news/deals-joint-ventures-alliances/starhub-partners-f-secure-launch-cybersecurity-app
StarHub has launched CyberProtect, an all-in-one online protection service which integrates antivirus, virtual private network (VPN) access, and advanced parental controls in a single app. Delivering on its DARE+ strategy of enhancing customers' digital lives with enriching services, StarHub is building a bubble of safety for customers to be entertained and productive online.
In partnership with global cybersecurity company F-Secure, CyberProtect can be installed on multiple devices, such as smartphones, tablets, and PCs belonging to individuals and families to protect them against viruses, ransomware, and other harmful apps that steal users’ personal data.
Traditional antiviruses rely on reactive scans often initiated by users when their devices are already infected with malware, while CyberProtect goes a step further to detect and remove malware automatically. This cutting-edge behaviour-based protection technology of CyberProtect accelerates responses to new threats on customers’ devices, quickly eliminating dangerous programmes behind the scenes.
CyberProtect also provides access to VPN, providing users with an encrypted connection to surf, stream, and network online in privacy.
“The greatest challenge for customers in cybersecurity is no longer failing to recognise that they are vulnerable targets, but not knowing what to do about it. Every time a new form of online threat surfaces, a fresh burden weighs on the minds of customers, and their online experience becomes riddled with worries,” said Johan Buse, StarHub’s chief of consumer business group.
“With CyberProtect, our goal is to simplify cybersecurity for customers, giving them peace of mind when they go online. We are eliminating the need for multiple apps to defend customers against different types of online threats, and providing a comprehensive service that will deliver both security and privacy. While there is no silver bullet in cybersecurity, this is a solution that works in tandem with sensible practices, to deliver an effective layer of protection that keeps customers safe,” he adds.
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time of esg taggings 0.02826228179037571
https://www.theedgesingapore.com/capital/insider-moves/geo-energy-shareholder-cuts-stake-starhub-and-silverlake-axis-buy-back-shares
Lenny Limanto, a substantial shareholder of Geo Energy Resources, saw a significant cut in her stake in the coal miner. On Jan 27, Cheng Xin Investment, which holds Limanto’s stake, sold 20 million shares for $7.14 million, which works out to an average price of 35.7 cents for each unit.
On Feb 18, Cheng Xin Investment sold another tranche of nearly 11.6 million shares for $4.64 million. The price works out to around 40.1 cents for each unit. With the sales, Limanto’s deemed stake has been cut from nearly 123.8 million shares or 8.79% to just over 92.2 million shares or 6.55%.
In contrast, Geo Energy on Dec 15, 2021, started a share buyback programme as a buoyant coal market flushed its balance sheet with cash. The most recent purchase was on Jan 20 when the company bought back 100,000 shares at 33 cents each, bringing the total number of shares bought back to 11.9 million units.
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https://www.theedgesingapore.com/news/telecommunications/starhub-enters-new-six-year-deal-premier-league
On Feb 21, StarHub announced it has entered into a new six-year deal with The Premier League, broadcasting all 380 matches in the upcoming season.
To welcome Premier League fans back on the Green network, StarHub will be rolling out open, agile and flexible access to all customers, and making the matches more accessible and affordable to Singaporeans, across StarHub TV+, mobile and broadband offerings. Full pricing details will be announced in June 2022.
All 380 matches will be shown in HD quality, allowing fans to be virtually transported to the exciting and boisterous stands of the Premier League stadiums.
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time of esg taggings 0.025437731062993407
https://www.theedgesingapore.com/capital/investing-ideas/starhub-still-investment-mode-expects-reap-profits-fy2023
Local telco StarHub has announced earnings of $149.3 million in its latest FY2021 ended December 2021. This is some 5.5% lower than its earnings of $157.9 million in FY2020.
The drop in earnings was mainly due to lower wage subsidies from the government to help all Singapore-based companies tide over the pandemic. Excluding the Job Support Scheme, as the subsidy is called, StarHub would have recorded earnings growth of 17% from $126.7 million to $148.3 million.
For the full year, revenue was largely unchanged at $2.04 billion, up 0.7% from $2.03 billion recorded in FY2020. While StarHub enjoyed more revenue from its broadband and enterprise business, the topline was offset by lower revenue from mobile, entertainment and sale of equipment.
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time of esg taggings 0.027683969121426344
https://www.theedgesingapore.com/capital/brokers-calls/analysts-keep-neutral-starhub-they-wait-growth
Analysts have largely kept their "neutral" calls on StarHub following its FY2021 earnings that dipped slightly, but with positive guidance for the current FY and next.
On Feb 11, the telco reported earnings of $149.3 million for the year ended Dec 31 2021, down 5.5% y-o-y, as it booked lower government subsidies. Excluding the payouts meant to help Singapore based companies cope with the pandemic, StarHub would have reported earnings of $148.3 million, up 17% y-o-y.
FY2021 revenue was largely unchanged at 0.7% higher y-o-y to $2.04 billion, mainly due to higher contributions from broadband and enterprise business, partially offset by lower revenues from mobile, entertainment and sales of equipment.
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time of esg taggings 0.046507070073857903
https://www.theedgesingapore.com/capital/results/starhub-posts-55-drop-fy2021-earnings-1493-mil-guides-better-fy2022-and-fy2023
Local telco group StarHub announced that its latest FY2021 ended December 2021 earnings have come in at $149.3 million, some 5.5% lower y-o-y than $157.9 million in FY2020.
The drop in earnings was mainly due lower lower payouts from the government in the form of the Job Support Scheme (JSS). Excluding the JSS, the group would have recorded earnings growth of 17.0% y-o-y from $126.7 million to $148.3 million.
Revenue for the full year was 0.7% higher y-o-y at $2.04 billion, compared to $2.03 billion last year, mainly due to higher contributions from broadband and enterprise business, partially offset by lower revenues from mobile, entertainment and sales of equipment.
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time of esg taggings 0.024745526956394315
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-yanlord-land-group-gke-corp-isoteam-starhub
Yanlord Land Group Price target: OCBC “hold” $1.16
Weaker outlook for the year ahead
The team at OCBC Investment Research has kept its “hold” rating on Yanlord Land Group with a lower fair value estimate of $1.16, from $1.20 due to a weaker contracted sales outlook.
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https://www.theedgesingapore.com/capital/brokers-calls/hold-starhub-future-earnings-expected-improve-uobkh
UOB Kay Hian is keeping its “hold” call on StarHub with a target price of $1.30, as it believes that the stock is currently on stable footing and has a frontload capex to drive its future earnings.
Starhub continues to experience improvement on its operational parameters amid rational competition and increased 5G network rollout. Recent updates from StarHub’s management suggests continued improvements across all segments.
On the mobile front, prepaid competition remains rational while postpaid likely benefitted from the onset of 5G network rollout. “This, we believe, will help to partly address average revenue per user (ARPU) dilution from SIM-only plans as postpaid ARPUs have been stable since 1QFY2021. We also expect higher take-up of 5G mobile plans (5G ARPUs are estimated to be 1.2 times higher than 4G ARPUs),” says analysts Chong Lee Len and Chloe Tan Jie Ying in a Jan 25 report.
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time of esg taggings 0.05545517313294113
https://www.theedgesingapore.com/digitaledge/news/starhub-help-singapore-firms-better-defend-against-ransomware
Ransomware is no doubt a growing threat to businesses. According to the Cyber Security Agency of Singapore, 89 local ransomware cases were reported in 2020, a 154% increase from the previous year.
To help enterprises strengthen their cyber defence, StarHub has teamed up with Ensign InfoSecurity, Palo Alto Networks, and Veeam to deliver a one-stop security solution.
The StarHub CyberSecure Business Solution is a managed service that provides a suite of cyber defences for enterprises, securing network frontlines and back-end systems. It integrates crisis and incident response management, digital forensics, cloud-delivered threat detection for every system and device, and secure data backup and recovery services.
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time of esg taggings 0.023925176123157144
https://www.theedgesingapore.com/capital/deals-joint-ventures-alliances/starhub-collaborates-h2i-pub-pilot-rainfall-monitoring-system
Hydroinformatics Institute (H2i) will tap StarHub’s ubiquitous network of mobile base stations as “opportunistic” rainfall sensors, creating a cost-effective rainfall monitoring system in a pilot by the Public Utilities Board (PUB), which is expected to be launched in the second quarter of the year.
The idea was among four PUB Global Innovation Challenge winners, picked for its potential to drive operational excellence and address Singapore’s future water needs through the application of digital solutions and smart technologies. The idea, which won the “Cost-effective Rainfall Monitoring” challenge, was chosen from some 57 applicants across four challenges. The team will receive mentorship, test-bedding opportunities, and support from PUB to further commercialise and scale the idea.
The H2i-StarHub team will be commissioned for a Proof-of-Concept (PoC) in Singapore’s southwestern district. If the pilot is successful, the project could be extended to the Proof-of-Value stage and cover more of the island, and eventually lead to a full national roll-out. This is the first time that such a system is being trialled in Singapore.
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time of esg taggings 0.026173672173172235
https://www.theedgesingapore.com/news/kopi-c-company-brew/beng-kuang-marine-charts-transformation-journey
Convinced that the best is yet to come, banking and finance veteran Yong Jiunn Run has made it his life’s goal to achieve his optimal potential.
“Psychologist Abraham Maslow’s theory of self-actualisation argues that individuals are motivated to maximise their personal development and growth, and this concept lies at the top of the Maslow hierarchy of needs,” says the CEO of oil and gas solutions provider, Beng Kuang Marine.
“For myself, I continue to strive to become everything that I am capable of becoming. As Maslow said, ‘One’s only failure is failing to live up to one’s own possibilities.’ I believe I’ve not realised my full potential yet,” he says.
article_here
time of esg taggings 0.04556566686369479
https://www.theedgesingapore.com/capital/results/vicplas-internationals-1hfy2022-earnings-inch-06-50-mil
Vicplas International has reported earnings of $5.02 million for the 1HFY2022 ended January, 0.6% higher than earnings of $4.99 million in the corresponding period a year ago.
The earnings growth was attributable to a growth in the half-year revenue and offset by the higher costs in energy and raw material, as well as the absence of Covid-19 grants from the government.
This translates to earnings per share (EPS) of 0.97 cent, up from the previous half-year period’s 0.96 cent on a fully diluted basis.
Revenue for the 1HFY2022 grew 11.9% y-o-y to $63.2 million due to higher revenue from both Vicplas’ medical devices as well as its pipes and pipe fittings segments.
Revenue for medical devices grew 11.0% y-o-y to $45 million due to higher customer orders, while revenue from the pipes and pipe fittings segment grew 14.1% y-o-y to $18.3 million from a gradual recovery in Singapore’s construction industry on the back of the easing Covid-19 disruptions.
Other income during the half-year period fell 4.0% y-o-y to $2.7 million as there were no Covid-19 related government subsidies.
In the 1HFY2022, raw materials and consumables used increased by 18.3% y-o-y to $31.0 million, mainly due to the higher cost of raw materials.
Employee benefits expense for the half-year period rose by 15.5% y-o-y to $19.9 million due to increased headcount and overtime, especially in the medical devices segment, on the back of the higher revenue.
Other operating expenses increased by 16.1% y-o-y mainly due to the rise in electricity tariff as well as higher tooling expenses and repairs and maintenance.
No dividends were declared for the period.
As at end-January, cash and cash equivalents stood at $5.5 million.
Looking ahead, the group says it expects its revenue to continue growing for the rest of the year ending July, although the rate of growth can be expected to moderate due to the effect of a higher base.
It adds that it is cautiously optimistic about its revenue growth over the remainder of FY2022, while keeping an eye on the impact of increasing operating costs, disruptions or slowdown in the logistics or supply chain and higher development and expansion costs.
“The medical device segment’s positive revenue momentum is expected to continue, albeit with some headwinds and higher costs that we have to mitigate. We have continued to expand our manufacturing capacity and our capability to provide attractive solutions to our growing customer base and focused on delivering operational excellence initiatives that can keep our manufacturing footprints competitive,” says Walter Tarca, deputy CEO of the group.
He adds, “Our Changzhou plant extension is on track for opening in the second half of this financial year and will provide needed space for new projects and increase in production. The pipe and pipe fittings segment is also recovering alongside Singapore’s construction sector, and is well-positioned in light of increased public housing launches over the next two years. All in all, we are cautiously optimistic given the current international trading conditions and geopolitical uncertainties.”
As at 11.07am, shares in Vicplas are trading 0.6 cent higher or 3.02% up at 20.5 cents.
Photo: Vicplas
article_here
time of esg taggings 0.027484510093927383
https://www.theedgesingapore.com/capital/brokers-calls/s-reit-dpus-expected-grow-12-y-o-y-fy2022-office-reits-preferred-maybank
Maybank Securities analyst Chua Su Tye is remaining “positive” on the Singapore REITs (S-REITs) sector, as he sees evidence of a broad-based recovery in FY2022.
According to Chua, the buoyant outlook is based on the REITs being underpinned by resilient occupancies and improving leasing momentum.
“We see the earnings outlook strengthening amid firmer macro fundamentals and re-opening efforts,” he writes in his report dated March 3.
On this, Chua expects distributions per unit (DPU) amongst the sector to increase by 12% y-o-y in FY2022 on the back of the absence of rental waivers, rising rents from the normalisation of businesses, as well as contributions from acquisitions.
To him, the sector remains “under-owned, in our view, as risks of higher interest rates have kept investors on the sidelines”.
“S-REITs have underperformed and are now 7% below November 2021 peaks, but with short-term bond yields rising in anticipation of rate hikes, we see lower risk of further yield curve steepening ahead,” says Chua.
“With the sector yield spread of 3.7% 1 standard deviation above their five-year historical average, we think higher rates are largely priced in,” he adds. “The interest rate outlook remains a key risk, but we see DPUs cushioned by strong balance sheets, while our sensitivities suggest limited downside to estimates and target prices.”
Office REITs and large-cap industrial names preferred
Amongst the REITs, Chua prefers office REITs and large-cap industrial names with an exposure to the new economy.
“The office sector saw a short-lived downcycle and is recovering on stronger-than-expected demand, led by tech occupier expansion, a ‘flight-to-quality’ and an easing of work-from-home mandates,” writes Chua.
“With supply constrained, pricing power has returned to office landlords. We forecast rents to rise 12% through 2023 and see a more active physical market and increasing inorganic growth opportunities for REITs, especially as cost of capital improves,” he adds.
Within the office sub-sector, Chua has lifted his DPU estimates for Keppel REIT and Suntec REIT by 2%-3% with higher target prices of 14%-16% “on stronger rental growth for Singapore office assets, and lower cost of equity assumptions”.
Chua is also remaining upbeat on the industrial sub-sector due to the rising contributions from the REITs’ overseas properties, as well as growth in assets under management (AUM) that is underpinned by the concentration in new economy segments.
“Having scaled up acquisitions, industrial REITs remain well-placed to capitalise on compressing cap rates and rising asset values. We expect to see acceleration of recycling plans supplementing inorganic growth initiatives,” says Chua, who adds that he sees catalysts from accretive acquisitions, and strengthening rents, led by logistics, and business park space.
Top picks
Amongst the REITs, Chua has identified his top picks as being Ascendas REIT (A-REIT), CapitaLand Integrated Commercial Trust (CICT), Mapletree Industrial Trust (MINT) and Suntec REIT.
According to him, these names are expected to deliver higher total return potential with a dividend yield range of 5.5%-6.0%, and a DPU compound annual growth rate (CAGR) of 4.5%-5.5%.
Chua has upgraded his recommendation on Suntec REIT to “buy” from “hold” with a target price of $1.80 based on its leverage to Singapore’s reopening. He has also given A-REIT, CICT and MINT “buy” calls with target prices of $3.65, $2.55 and $3.35 respectively.
Chua has rated Keppel REIT at “hold” with a target price of $1.20.
Units in A-REIT, CICT and MINT closed at $2.87, $2.16 and $2.63 respectively on March 11. Units in Suntec REIT and Keppel REIT closed $1.69 and $1.20 respectively on the same day.
Photo: Bloomberg
article_here
time of esg taggings 0.03200105600990355
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-suntec-reit-tps-least-145
Analysts are generally positive on Suntec REIT with strong FY2021 results led by newly acquired and completed assets. With the exception of Maybank Securities’ “hold” recommendation, analysts from DBS Group Research and RHB Group Research have kept their “buy” calls on the REIT.
Suntec REIT, on Jan 26, reported a distribution per unit (DPU) of 4.512 cents for the 2HFY2021 ended December, up 9.8% y-o-y. The higher DPU was helped by contributions from its new UK properties and higher income from Suntec City mall.
In addition to his “buy” rating, RHB analyst Vijay Natarajan has given the REIT a higher target price of $1.77 from $1.72.
article_here
time of esg taggings 0.031172953080385923
https://www.theedgesingapore.com/capital/results/suntec-reit-reports-dpu-4512-cents-2hfy2021-98-y-o-y
The manager of Suntec REIT has reported a distribution per unit (DPU) of 4.512 cents for the 2HFY2021 ended Dec 31, 2021, 9.8% higher than the DPU of 4.109 cents in the corresponding period the year before.
The higher DPU was due to the higher distribution income from operations, which increased 21.6% y-o-y to $129.0 million on the back of the two new acquisitions made in London, UK.
For the 2HFY2021, distribution income from operations rose 21.6% y-o-y to $129.0 million.
article_here
time of esg taggings 0.024021873017773032
https://www.theedgesingapore.com/capital/results/olam-international-back-black-earnings-2649-mil-2hfy2021-declares-second-interim
OIam International has swung to profitability in the 2HFY2021 ended December with earnings of $264.9 million, compared to a loss of $87.0 million in the corresponding period the year before.
The higher earnings were due to improved operating profit and lower exceptional losses, says the group in its statement on Feb 28.
Earnings for the FY2021 surged 179.4% y-o-y to $686.4 million, from FY2020’s earnings of $245.7 million, making it a record high for the group.
article_here
https://www.theedgesingapore.com/news/reits/mapletree-logistics-trust-acquires-south-koreas-baeksa-logistics-centre-1003-mil
The manager of Mapletree Logistics Trust (MLT) has proposed to acquire Baeksa Logistics Centre in South Korea for a consideration of 88.5 billion won ($100.3 million).
“This acquisition, with its modern specifications and 100% occupancy underpinned by a leading e-commerce company, is expected to be yield-accretive to MLT,” says Ng Kiat, CEO of the manager.
The property was independently valued by Chestertons Research Co., Ltd. at KRW91.5 billion as at Dec 21, 2021.
article_here
time of esg taggings 0.02491916692815721
https://www.theedgesingapore.com/news/reits/mapletree-logistics-trust-buys-land-parcels-subang-jaya-rm656-mil
Mapletree Logistics Trust plans to buy two industrial land parcels in Selangor for RM65.6 million ($21 million), with an eye to combine them with two other adjacent properties it already owns.
Specifically, MLT aims to build the first modern ramp-up warehouse in Subang Jaya, where the land parcels are site. “This is in line with our strategy to optimise MLT’s portfolio and future-proof our assets through asset rejuvenation,” says Ng Kiat, CEO of MLT’s manager.
The two land parcels cover 257,000 square feet. They are 20 minutes’ drive from MLT’s other nearby assets – Mapletree Shah Alam Logistics Park and Mapletree Logistics Hub - Shah Alam.
article_here
time of esg taggings 0.027983002131804824
https://www.theedgesingapore.com/capital/results/mapletree-logistics-trust-posts-58-growth-3qfy2022-dpu-2185-cents
The manager of Mapletree Logistics Trust (MLT) announced that the trust’s DPU for the 3QFY2022 ended December 2021 came in at 2.185 cents, 5.8% higher than 2.065 cents the previous year, on an enlarged unit base following the equity fund raising during the same period.
The amount distributable to unitholders increased by 14.5% y-o-y to $96.7 million.
Gross revenue for the third quarter was $166.9 million, an increase of 19.3% from $139.9 million a year ago. This brought net property income (NPI) to $146.4 million, 17.4% higher than $124.7 million last year. This growth in revenue and NPI was driven by higher revenue contribution from existing properties, contributions from accretive acquisitions completed in 9MFY2022 and FY2021, as well as lower rental rebates granted to eligible tenants impacted by Covid-19.
article_here
time of esg taggings 0.025449143955484033
https://www.theedgesingapore.com/news/ma/mapletree-logistics-trust-completes-acquisition-12-logistics-assets-china
The manager of Mapletree Logistics Trust (MLT) has announced the acquisition completion for 12 out of the 13 logistics assets it has proposed to acquire in China.
Approximately $675.5 million, or 97.5% of the gross proceeds of the equity fund raising it raised in Nov 2021 has been used to partially fund the acquisition, it said in a filing.
The remaining 2.5% of the gross proceeds or approximately $17.3 million will be used to pay the professional and other fees and expenses incurred by MLT in connection with the acquisitions and the equity fund raising.
article_here
time of esg taggings 0.025698001962155104
https://www.theedgesingapore.com/capital/sgx-research-series-10-10/spac-ial-edition-10-10
In light of market developments, increased interest and potential M&A opportunities in the Asia Pacific, Singapore Exchange (SGX) has launched the Special Purpose Acquisition Companies Framework to introduce a new listing vehicle to the Singapore market. SGX believes that the introduction of spacs will generate benefits to capital market participants and become a viable alternative to traditional IPOs for fundraising in Singapore and the region. This special edition of SGX research series: 10 in 10 provides an introduction on spacs and its typical lifecycle.
1. What are special purpose acquisition companies (spacs)?
Spacs are formed to raise capital through initial public offerings (IPOs) for the sole purpose of acquiring operating businesses or assets. Such acquisitions may be in the form of a merger, share exchange or other similar business combination (BC) methods. Prior to an initial BC, spacs are listed investment vehicles with no prior operating history and revenue-generating business or asset at IPO.
article_here
https://www.theedgesingapore.com/capital/results/koh-brothers-eco-engineering-reports-2hfy2021-earnings-836000
Koh Brothers Eco Engineering has reported earnings of $836,000 for 2HFY2021 ended Dec 2021, down 55% y-o-y.
Revenue in the same period was $71.1 million, down 41% y-o-y.
For the full FY2021 ended Dec 2021, the company reported earnings of $2.04 million, reversing from a loss of $11.8 million. Revenue was down 1% to $180.6 million.
article_here
time of esg taggings 0.02752108289860189
https://www.theedgesingapore.com/capital/results/ascott-residence-trust-reports-2hfy2021-dps-227-cents-14-one-divestment-gain
The manager of Ascott Residence Trust (ART) has reported a distribution per stapled security (DPS) of 2.27 cents for the 2HFY2021, up 14% y-o-y. This brings DPS for the FY2021 to 4.32 cents, up 43% y-o-y.
Excluding the divestment gains distributed in both FY2021 and FY2020, ART’s DPS was up 85% y-o-y.
Distribution income for the 2HFY2021 rose 19% y-o-y to $73.5 million, which includes a one-off divestment gain of $25.0 million to share divestment gains with the REIT’s stapled securityholders. The move was also made to replace income loss from divestment assets and mitigate the impact of Covid-19, says ART in a Jan 28 statement.
article_here
time of esg taggings 0.03161684889346361
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-yanlord-land-group-gke-corp-isoteam-starhub
Yanlord Land Group Price target: OCBC “hold” $1.16
Weaker outlook for the year ahead
The team at OCBC Investment Research has kept its “hold” rating on Yanlord Land Group with a lower fair value estimate of $1.16, from $1.20 due to a weaker contracted sales outlook.
article_here
time of esg taggings 0.023764422861859202
https://www.theedgesingapore.com/capital/brokers-calls/ocbc-lowers-yanlord-land-groups-tp-116-weaker-contracted-sales-outlook
The team at OCBC Investment Research has kept its “hold” rating on Yanlord Land Group with a lower fair value estimate of $1.16 from $1.20 due to a weaker contracted sales outlook.
“We factor in Yanlord’s actual FY2021 contracted sales in our model, and also assume a 5% contraction for FY2022,” writes the team in its Jan 14 report.
To be sure, Yanlord’s contracted sales for FY2021 ended December fell 24.0% y-o-y to RMB59.6 billion ($12.63 billion), due to a decline in both contracted gross floor area (GFA) and average selling price (ASP) of 12.7% and 13.0% y-o-y to 1.87 million sqm and RMB31,889 per sqm respectively.
article_here
time of esg taggings 0.04733987711369991
https://www.theedgesingapore.com/news/brokers-calls/phillipcapital-lowers-frasers-centrepoint-trusts-tp-264-reduced-dpu-estimates-and
PhillipCapital analyst Natalie Ong has reiterated her “buy” call on Frasers Centrepoint Trust (FCT) with a lower target price of $2.64 from $2.83 previously.
In a Jan 30 note, Ong has lowered her FY22 to FY26 DPU estimates by 3% to 5.3% due to the anticipated rising cost of borrowing. The lower target price is also attributed to higher cost of equity assumption at 6.48% from the previous 6.38%.
Ong notes FCT recorded a 2.1% higher occupancy y-o-y in 1Q22, with six out of nine malls achieving occupancies between 97% to 100%.
article_here
time of esg taggings 0.04792050295509398
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-frasers-centrepoint-trust-light-improving-outlook
Analysts from CGS-CIMB and Maybank Securities are optimistic about Frasers Centrepoint Trust (FCT) as the REIT’s portfolio saw resilient operating metrics – including its portfolio occupancy – during its business update for the 1QFY2022 ended December.
CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee have maintained ‘add’ on FCT, with a lower target price of $2.73 from $2.92, as they raise their cost of equity (COE) assumption to reflect the rising rate environment.
During the REIT’s management briefing, Eing and Lock note that management sounded “more optimistic” as Singapore moves towards normalisation.
article_here
time of esg taggings 0.02418025187216699
https://www.theedgesingapore.com/news/reits/cdl-hospitality-trusts-makes-accretive-acquisition-hotel-brooklyn-uk-438-mil
The manager of CDL Hospitality Trusts (CDLHT) says it has completed the indirect acquisition of Hotel Brooklyn in the UK, on Feb 22.
Hotel Brooklyn is a newly-opened upscale four-style hotel in Manchester, on 57 and 59 Portland Street. It has a total of 189 keys.
The acquisition was made by CDL Hospitality REIT’s wholly-owned subsidiary, CDL HREIT Investments (II), who entered into a share purchase agreement (SPA) with the RAHoldingsUK on the same day.
article_here
time of esg taggings 0.04172928701154888
https://www.theedgesingapore.com/capital/palm-oil/cdl-hospitality-trusts-reports-110-lower-dps-306-cents-2hfy2021
CDL Hospitality Trusts (CDLHT) reported a distribution per stapled security (DPS) of 3.06 cents for the 2HFY2021 ended December, down 11.0% y-o-y.
This brings total DPS for the FY2021 to 4.27 cents, which fell 13.7% y-o-y.
2HFY2021 revenue improved 39.7% y-o-y to $91.5 million amid the recovery of lodging demand on the back of the relaxation of travel restrictions and the broader distribution of vaccines.
article_here
time of esg taggings 0.04562697699293494
https://www.theedgesingapore.com/capital/reits/kits-manager-proposes-raise-base-fee-10-times
Business trusts just have not taken hold of investors’ imagination — and their pockets — in the way that REITs have. The most pertinent question ahead of an EGM to be held on April 19 is: Will unitholders of Keppel Infrastructure Trust (KIT) vote for a new fee structure where they are likely to pay the manager higher fees?
The old base fee was $2 million a year with some adjustment for inflation. The new proposed base fee is 10% of distributable income, which in FY2021 was $192.2 million, taking the new base fee to $19 million if the new formula is used. If approved, the new fees will be implemented in stages as such a large jump immediately this year would impact distributions.
The rationale, according to KIT’s manager, is to have a greater alignment between KIT, the manager and unitholder. The manager also needs to increase bench strength as it outlines its new growth strategy.
article_here
time of esg taggings 0.02737885806709528
https://www.theedgesingapore.com/news/company-news/keppel-infra-trust-appoint-financial-adviser-its-strategic-review-ixom
The trustee-manager of Keppel Infrastructure Trust (KIT), on March 24, announced that it is currently undertaking a strategic review of its 100% stake in Ixom Holdings in a bid to grow the business.
A financial adviser will also be appointed in connection with the review. In addition, KIT has indicated that it may, through the adviser, undertake preliminary discussions with various parties to evaluate the viability of options available.
The exercise is part of KIT’s regular asset review process in line with its refreshed strategy following the strategic review conducted at the end of 2021.
There is no assurance that any transaction will materialise from such a strategic review or that any definitive or binding agreement will be reached, says the trustee-manager in its statement.
Ixom was acquired by KIT in 2019. It is among the leading industrial infrastructure businesses in Australia and New Zealand. It supplies and distributes critical water treatment chemicals and industrial and speciality chemicals which are key to fundamental industries.
Ixom is also the sole manufacturer of liquefied chlorine, as well as the leading manufacturer of caustic soda in Australia. The chemicals manufactured and distributed by Ixom are components used in a range of industries including the water treatment, dairy, agriculture, mining and construction sectors.
Shares in KIT closed 0.5 cent higher or 0.91% up at 55.5 cents on March 23.
article_here
time of esg taggings 0.04295353498309851
https://www.theedgesingapore.com/news/ma/keppel-infrastructure-trust-invest-us250-mil-alongside-investors-aramco-gas-pipelines
Keppel Infrastructure Trust (KIT) says it is seeking to invest in Aramco Gas Pipelines Company, an entity with cash flows derived from the gas pipelines network of Saudi Arabian Oil Company (Aramco).
KIT, on Feb 8, had entered into a subscription agreement as well as a limited partnership agreement to invest in Aramco’s gas pipelines business, Aramco Gas Pipelines Company.
Aramco Gas Pipelines Company is a newly-formed subsidiary of Aramco, which is one of the world’s largest integrated energy and chemicals companies.
article_here
time of esg taggings 0.024940850911661983
https://www.theedgesingapore.com/capital/results/keppel-infrastructure-trust-posts-16-growth-fy2021-dpu-378-cents
Keppel Infrastructure Trust (KIT) announced that its DPU for FY2021 ended December 2021 came in at 3.78 cents, a first-time increase of 1.6% from the annual payout of 3.73 cents since 2016.
On the back of this, the group achieved a 5.1% y-o-y increase in revenue to $1.6 billion, compared to $1.5 billion in the previous year, largely driven by higher contribution from City Energy and Ixom.
Overall, the group saw an increase in costs and expenses, which includes a 33.9% y-o-y increase in fuel and electricity cost to $135.6 million, a 15.7% increase in staff costs to $165.2 million and a 10.6% increase in other operating expenses to $108.6 million.
article_here
time of esg taggings 0.0250845099799335
https://www.theedgesingapore.com/news/reits/ascendas-india-trust-acquire-phase-2-warehouse-navi-mumbai-387-mil
The manager of Ascendas India Trust (a-iTrust) has, through its wholly-owned subsidiary, Ascendas Property Fund (India) Pte Ltd (APFI), entered into definitive agreements for the proposed acquisition of the entire issued share capital of Anomalous Infra Private Limited.
Anomalous Infra Private Limited owns a warehouse with a total leasable area of 0.33 million sq ft, located at the Arshiya Free Trade Warehousing Zone, Panvel, Navi Mumbai.
The gross consideration for the warehouse is around 2.15 billion rupees ($38.7 million). The sum comprises an upfront payment of 1.94 billion rupees and an additional deferred consideration of up to 0.21 billion rupees. The additional deferred consideration is to be paid over the next four years, upon the achievement of certain performance milestones.
The warehouse has been recently constructed and is operational. It is being acquired from the Arshiya group as part of the forward purchase agreement executed in July 2019.
The REIT had previously already acquired six operating warehouses from the Arshiya group with a total leasable area of 0.83 million square feet in February 2018.
Similar to these six warehouses, the seventh warehouse will also be leased and operated by a subsidiary of the group for a period of six years. The acquisition of this warehouse is expected to be completed shortly.
“The acquisition enables a-iTrust to further expand its presence in the logistics sector. Given the unique benefits offered by the free trade warehousing zone (FTWZ) logistics segment, we are seeing growing demand in this space and this acquisition puts us in a good position to capitalise on this growth,” says Sanjeev Dasgupta, CEO of the manager.
Units in a-iTrust closed 2 cents lower or 1.63% down at $1.21 on March 23.
article_here
time of esg taggings 0.027732654009014368
https://www.theedgesingapore.com/capital/results/ascendas-india-trust-sees-14-lower-dpu-360-cents-2hfy2021
Ascendas India Trust (a-iTrust) has reported a distribution per unit (DPU) of 3.60 cents for the 2HFY2021 ended December, 14% lower than the 4.19 cents posted in the 2HFY2020.
This brings FY2021 DPU to 7.80 cents, which is 11% lower than FY2020’s DPU of 8.83 cents.
According to the REIT manager, the FY2021 decline was due to the higher DPU in FY2020 on the back of a one-off reversal of dividend distribution tax provision.
article_here
time of esg taggings 0.02919936482794583
https://www.theedgesingapore.com/capital/brokers-calls/dbs-expecting-centurion-come-back-dividend-play
DBS Group Research analysts Woon Bing Yong and Lee Keng Ling have kept a “hold” rating on Centurion Corporation with an increased target price to 42 cents from 38 cents. DBS will also be suspending coverage on the stock as it reallocates research resources.
In light of increased global opening as restrictions due to the Covid-19 pandemic ease, Singapore’s purpose-built worker accommodation (PBWA) occupancies are expected to improve progressively over FY2022 ending December 2022 and FY2023. According to a senior government official, this comes at a point where the foreign labour crunch is targeted to be resolved in the next few months as well.
At the same time, a new academic year coupled with the relaxation of border restrictions in Australia and the UK should mark a point of recovery for student arrivals and thereby purpose built student accommodation (PBSA) occupancies, the analysts expect.
The analysts foresee Centurion to return as a dividend play, underpinned by improved occupancies across its PBSA and PBWA segments. FY2022 and FY2023 dividend per share (DPS) are projected to come in at 1.5 cents and 2 cents respectively, representing a yield of 4.2% and 5.6% respectively.
On the other hand, the analysts are wary about the group’s capex moving forward due to new regulations for workers’ dormitories set by the government, which includes an expected reduction in capacity at the group’s worker dorms.
Although the analysts claiming that early information resulting in rental rates steady, the group is expected to incur additional capex to adapt the dormitories to the new standards. Instead of an upfront lump sum capex, Woon and Ling believe that this will likely be something that will take place over a period of time.
Some key risks the analysts note include unfavourable changes in regulatory environment, foreign exchange volatility, sustained deterioration in economic outlook for Singapore and Malaysia affecting foreign worker demand and possible re-implementation of border restrictions.
As at 3.29pm, shares in Centurion are trading at 1 cent higher and 2.82% higher at 36 cents at a FY2022 P/B ratio of 0.4x and 4.2% dividend yield.
article_here
time of esg taggings 0.028595529031008482
https://www.theedgesingapore.com/capital/brokers-calls/dbs-remains-neutral-japfa-it-expects-its-near-term-outlook-remain-subdued
DBS Group Research analyst Cheria Christi Widjaja has kept “hold” on Japfa as she sees the group’s near-term outlook to remain subdued due to the limited room for margin improvements in FY2022.
“We foresee cost pressure lingering in 2022, as raw material and logistics costs stay elevated,” says Widjaja. This is in light of the recent Russia-Ukraine crisis, which has impacted a variety of commodity prices such that materials including soybean meal and corn skyrocketed recently. The analyst notes how this stands to limit margin improvements from demand recovery amid gradual reopening.
Moreover, in light of the resurgence of the African Swine Flu (ASF) outbreak, the analyst believes that there is a weak near-term outlook for Japfa’s Vietnam swine operation. This is compounded by existing Covid-19 movement restrictions that influenced softer swine prices.
However, Widjaja remains positive on certain aspects of Japfa’s business, such as strong broiler prices in Indonesia with the upcoming Ramadhan season and favourable raw milk prices in China.
Some risks include a surge in Covid-19 infections, higher-than-expected raw material costs, weaker-than-expected consumer demand, and greater or continued outbreak of diseases that would lead to price volatility.
In her report dated March 24, Widjaja has kept her target price unchanged at 67 cents, as she has kept her EBITDA forecasts for the FY2022/FY2023 the same following Japfa’s FY2021 results.
“We used a sum-of-the-parts valuation and pegged our valuation of Animal Protein Indonesia to our target price for Japfa Comfeed Indonesia (JPFA) at 2,060 rupiah (19.46 cents), while valuations of its Animal Protein Others and Dairy segments are based on FY2022 EV/EBITDA,” she writes.
“Our target price implies a 7.9x FY2022 P/E. Japfa currently trades at an FY2022 EV/EBITDA of 5x and an FY2022 P/E of 7x, which is lower compared to the average of its regional peers in the animal protein and dairy sector, which is at an FY2022 EV/EBITDA of 10x and an FY2022 P/E of 14x,” she continues.
As at 11.19am, shares in Japfa are trading at 1.5 cents up or 2.36% higher at 65 cents at an FY2022 P/B of 0.6x and dividend yield of 1.6%.
article_here
time of esg taggings 0.028167146956548095
https://www.theedgesingapore.com/news/brokers-calls/dbs-lifts-first-resources-tp-250-strong-cpo-price-and-earnings-prospect
DBS Group Research analyst William Simadiputra has kept his “buy” call for First Resources, citing rising earnings prospects on strong crude palm oil (CPO) price outlook and production volume growth.
In his March 21 report, Simadiputra believes there is room for the share price to further perform this year, as First Resources’ P/E multiple is still below its 5-year average of 15x. To this end, he raises his target price to $2.50 and lifts his earnings forecast for FY2022 by 33% to US$194 million.
The plantation company's CPO yield will continue to perform above its peers in 2022, adds Simadiputra. "First Resources could deliver stronger earnings this year due to its unhedged sales volume amid rising CPO prices. Last year, FR’s earnings performance underperformed its peers due to hedged CPO selling prices and we only saw a meaningful improvement in 4Q21," he says.
In 2022 and 2023, DBS’s CPO benchmark price assumption is US$1,125 per metric tonne while the selling price assumption is US$850 per metric tonne. With this, Simadiputra forecasts First Resources to achieve US$48 million earnings per quarter in 2022.
This is a conservative estimate, he explains, considering that First Resources had booked earnings of US$63 million and US$53 million in 4Q2021 and 3Q2021 respectively.
“Back then, CPO benchmark price had averaged US$1,215 per metric tonne and US$1,064 per metric tonne respectively. Despite the outlook for higher CPO selling prices, we anticipate higher cash cost per ton for nucleus CPO on higher fertiliser cost. However, we believe First Resources can weather rising costs on strong yield performance which will keep the cost per hectare low,” he adds.
As at 12.08pm, shares in First Resources are trading 1 cent higher or 0.47% up at $2.12.
article_here
time of esg taggings 0.02760131796821952
https://www.theedgesingapore.com/capital/brokers-calls/bhg-retail-reit-expected-see-stable-growth-moving-forward
Analysts from PhillipCapital and DBS Group Research believe that the worst is over for BHG Retail REIT. The REIT is also expected to see growth from here on.
In its latest FY2021 ended December 2021 results, BHG Retail REIT reported an 11.3% y-o-y increase in distribution per unit (DPU) to 2.17 cents. This came on the back of a 16.6% y-o-y increase in gross revenue to $70.6 million and a 14.9% growth in net property income (NPI) to $70.6 million.
Following this, DBS Group Research analysts Woon Bing Yong and Derek Tan are keeping their “hold” recommendation on the REIT with a target price of 57 cents.
“While FY2020 was undoubtedly the bottom of BHG REIT’s three-year declining DPU trend, its recovery is expected to be slower, as FY2021 DPU numbers did not bounce back as quickly as anticipated,” say Woon and Tan. “Still, we maintain our FY2022 estimates, as Hefei Mengchenglu is set to make a bigger contribution this year following disruptions from its asset enhancement initiatives (AEI) in FY2021.”
Additionally, the analysts note that the REIT has exposure to three properties located in Hefei and Chengdu, where urban disposable income grew at five-year compound annual growth rates (CAGRs) of 8.5% and 7.9%, respectively, outpacing Beijing’s 7.2%. “Correspondingly, retail spending in Hefei and Chengdu grew at faster five-year CAGRs of 16.6% and 7.3%, versus 5.7% in Beijing,” say Woon and Tan. “With the ongoing tenancy remix, we believe BHG REIT’s assets in Hefei and Chengdu have the potential to deliver strong organic growth in the medium term.”
However, Woon and Tan note that their estimates for the FY2022 are on the conservative side, as they are the only brokerage covering the counter.
Meanwhile, BHG Retail REIT has also caught the attention of PhillipCapital.
In an unrated report dated Mar 2, analyst Vivian Ye observes how the recovery in its gross revenue and property income has been underpinned by healthy occupancy. “The main contributor to the increase was Beijing Wanliu mall, with gross revenue increasing 19% to $20 million,” says Ye. “No rental rebates were given in 2HFY2021. Rents for new and renewed leases continued to recover.”
However, Ye also pointed out higher property operating expenses with BHG Retail REIT. “Property operating expenses increased 17.3% y-o-y, due to the gradual resumption of malls’ normal operations and absence of Covid-19 subsidies from the government,” Ye says.
On a whole, BHG Retail REIT’s portfolio has proved its resilience, says the analyst, with continued recovery in portfolio occupancy and higher gross revenue, despite the Covid-19 Omicron wave in 2HFY2021. “Gearing remained healthy at 34.1%, providing comfortable debt headroom to pursue M&A growth opportunities,” she adds.
As at 3.20pm, share price in BHG Retail REIT is trading flat at 54 cents.
Photo: BHG Retail REIT
article_here
time of esg taggings 0.029750338988378644
https://www.theedgesingapore.com/capital/brokers-calls/shopee-16-regions-dbs-group-research-sees-95-upside-sea
Sea Limited (Sea) offers higher e-commerce growth than its peers. Combined with its businesses in gaming, FinTech and food delivery, DBS Group Research analyst Sachin Mittal has renewed faith in its growth strategy.
In a Feb 21 note, Mittal is maintaining “buy” on Nasdaq-listed Sea with a lowered target price of US$272 ($367.99), down from $278 previously. The new target price represents a 95% upside.
Sea engages in the digital entertainment, e-commerce, and digital financial service businesses primarily in seven countries across Greater Southeast Asia.
article_here
time of esg taggings 0.025622075889259577
https://www.theedgesingapore.com/capital/brokers-calls/analysts-positive-sasseur-reit-following-strong-4q21-results
Analysts are positive on Sasseur REIT’s growth prospects after the REIT reported its 4QFY21 results on Feb 18.
CGS-CIMB, Maybank Securities and DBS Group Research analysts have kept their “add” and “buy” calls, with target prices of $1.06, $1.10 and $1.15, respectively. The REIT’s FY21 DPU, which reached a new high of 7.104 cents, surpassed the analysts’ and consensus estimates.
Sasseur REIT reported entrusted manager agreement (EMA) rental income of $35.4 million in 4QFY21. Its income available for distribution expanded 8.4% y-o-y to $25.3 million, underpinned by higher fixed component of the EMA rental income, a stronger renminbi, as well as interest cost savings, note CGS-CIMB analysts Lock Mun Yee and Eing Kar Mei.
article_here
time of esg taggings 0.025199220050126314
https://www.theedgesingapore.com/capital/brokers-calls/aztech-global-strong-buy-given-natural-advantage-iot-dbs
DBS Group Research is maintaining its “buy” call on integrated solutions provider Aztech Global at a lower target price of $1.54.
This is down 13 cents from the previous $1.67 call and is expected to give the counter a 67% upside from its 92-cent price on Feb 15, analyst Ling Lee Keng writes in a research note.
“Our new target price is pegged to a lower FY2022 peer average of 12x (vs 13x previously) due to the de-rating of tech stocks globally on FY2022 earnings,” she explains.
article_here
time of esg taggings 0.033390054013580084
https://www.theedgesingapore.com/capital/brokers-calls/dbs-positive-sembcorp-industries-amidst-its-green-transformation
DBS Group Research analyst Ho Pei Hwa has maintained a ‘buy’ rating on Sembcorp Industries (Sembcorp) with an increased target price to $3 from $2.40, based on a higher price-to-book value (P/BV) multiple of 1.4 times (from 1.2 times previously). The higher target price is also based on a rolled over valuation to FY2022 (from blended FY2021/2022), against 9-10% normalised return on equity (ROE).
“Successful execution of [Sembcorp’s] renewable energy plan, translating into earnings growth, would further lift valuations, writes Ho in his Feb 15 report.
In May 2021, Sembcorp unveiled its strategy to transform its portfolio from brown to green, by focusing on growing renewables and integrated urban solutions businesses. It set quantitative targets to quadruple its renewable portfolio to 10GW by 2025, from 2.6GW of wind and solar capacity in Southeast Asia, India, and China as of end-2020, according to Ho.
article_here
time of esg taggings 0.05527686886489391
https://www.theedgesingapore.com/capital/brokers-calls/dbs-dividend-payout-not-impacted-supervisory-action-rhb
The Singapore research team at RHB Group Research has maintained its ‘buy’ rating on DBS with an unchanged target price of $40.40 after the bank was asked to set aside an additional $930 million in regulatory capital by the Monetary Authority of Singapore (MAS).
The imposition by the central bank was due to the disruption of its digital banking services in November 2021.
DBS has been asked to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk. “MAS has also directed DBS to appoint an independent expert to conduct a comprehensive review of the incident, including the bank’s recovery actions, where DBS must rectify all shortcomings identified,” write the analysts.
article_here
time of esg taggings 0.02439405396580696
https://www.theedgesingapore.com/issues/stocks-watch/dbs-group-holdings-higher-interest-rates-china-buy-and-slew-digital-assets-bode
Last year, DBS Group Holdings outperformed the Straits Times Index and the market by rising more than 30%. It was also the best performer among the three local banks. Since the start of this year, the bank’s share price is up 8.5%. We reckon that DBS will continue to perform this year. This is why.
First, interest rates are trending up this year, with the US Federal Reserve indicating three to four likely hikes this year. Assuming four rounds of 25 basis points each, that is a 1% hike, which will lift the net interest income of DBS by as much as $2 billion, estimates RHB Group Research. In contrast, the same hike will give Oversea-Chinese Banking Corp (OCBC) an $800 million boost whereas United Overseas Bank (UOB) might see between $500 million and $600 million.
With 9MFY2021 already at $5.41 billion, DBS might record a fullyear FY2021 ended December 2021 earnings of $7 billion, versus FY2020’s $4.7 billion. Besides the lift from higher rates, DBS in FY2022 is likely to enjoy contributions from its recent acquisition: A 13% stake in Shenzhen Rural Commercial Bank for $1.079 billion or 1.01 times net asset value. DBS group CEO Piyush Gupta said this deal was immediately EPS accretive.
article_here
time of esg taggings 0.04769461997784674
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-keppel-dc-reit-trimmed-tps
CGS-CIMB and DBS Group Research analysts observe upbeat FY2021 earnings reported by Keppel DC REIT (KDC), driven by acquisitions, AEIs, and higher occupancy rate.
However, for CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee, they’ve lowered their target price on this stock to $2.70 from $2.78 previously, to take into account higher cost of equity assumptions in view of the increasing interest rate environment.
The analysts, who are keeping their “add” call on KDC, noted that its FY2021 revenue increased 2.1% y-o-y to $271.1 million, driven by asset enhancement initiative contributions from Dublin and Singapore assets, full-year contribution from Kelsterbach and Amsterdam DC, as well as the acquisitions of Eindhoven and Guangdong DC.
article_here
time of esg taggings 0.02736603980883956
https://www.theedgesingapore.com/capital/brokers-calls/dbs-proceeds-buy-rating-ihh-amidst-ongoing-lawsuit
DBS Group Research analyst Rachel Tan has kept her ‘buy’ rating on IHH with an increased target price of $2.32 from $2.00 previously.
IHH is currently trading at a very attractive FY2022 EV/EBITDA of 14 times, close to -2 standard deviation of its historical range and is positioned to ride on the strong pent-up demand from foreign patients when borders reopen, says Tan.
Earlier on Jan 5, IHH announced that it has been in legal tussles with US fund Emqore Envesecure Private Capital Trust since June 2020.
article_here
time of esg taggings 0.024910690961405635
https://www.theedgesingapore.com/capital/brokers-calls/dbs-starts-grab-holdings-buy-tp-us9
DBS Group Research has initiated “buy” on Grab Holdings with a 12-month target price of US$9 ($12.19), representing a 25% upside to its last-traded price of US$7.22 on Jan 3.
The target price also translates to 6.5 times of FY2023’s adjusted revenue.
“We assign a 30% premium to Grab for its multi-sector leadership, cross-selling synergies and higher growth potential compared to DoorDash, Uber and PayPal in their respective sectors,” writes analyst Sachin Mittal on Jan 4.
article_here
time of esg taggings 0.021665189880877733
https://www.theedgesingapore.com/capital/brokers-calls/dbs-says-capitaland-investment-born-fly-tp-400
DBS Group Research analysts Derek Tan and Rachel Tan have re-initiated a ‘buy’ rating on CapitaLand Investment (CLI) with a target price of $4.00, offering a 20% upside.
The analysts expect the catalysts that emerge to be the launch of new fund products and REIT acquisitions, with an aim to grow funds under management (FUM) to $100 billion by 2024, up 19% from 2021, and a rebound in operational performance from its lodging business.
“These are expected to drive a three-year net profit compound annual growth rate by 12% during FY2021-FY2024,” say the analysts.
article_here
time of esg taggings 0.03803509217686951
https://www.theedgesingapore.com/capital/brokers-calls/dbs-sees-breakout-month-s-reits-warns-focus-may-soon-shift-results-and-rates
Singapore REITs (S-REITs) experienced a “breakout month” on news of domestic relaxation and border reopening trends in Singapore, with the FTSE ST Real Estate Investment Trusts Index (FSTREI) climbing 5.5% m-o-m, beating the STI’s rise of 5.1% m-o-m.
In a flash note on April 1, DBS Group Research’s Geraldine Wong and Derek Tan says catalysts for the sector were “a mixed bag”. But there was a lift-off from January and February, when many stocks reached a 52-week low.
They add that while sentiment continues to be mixed given the risk of geopolitical uncertainties, potentially more US Federal Reserve rate hikes in the pipeline and inflation risks, domestic catalysts were a breakthrough for the S-REITs sector.
These include the fact that Singapore will transit to a “new normal reopening stance” under the Vaccinated Travel Framework (VTF) that commenced on April 1.
Major domestic relaxation protocols, such as a 75% return to office and a doubling of dine-in cap to 10 people per group have also propelled major moves within the reopening trade sectors of office, retail and hospitality, the analysts point out.
This coincided with the top-performing sectors for the month, namely hospitality, office and healthcare REITs, which saw gains of 14.4%, 5.8% and 5.1% m-o-m respectively.
The growth momentum remains intact as reopening trades see “a breath of fresh air” and the analysts expect an 8% CAGR in distribution per unit (DPU) growth for the sector in FY2022-2023.
Describing the market sentiment as “strong” in March, Wong and Tan says they think that in 2Q2022, share prices of S-REITs may trade sideways.
This is as market attention will likely rotate towards near term results and absorb the impact of inflation (such as utilities and maintenance costs) on distributions.
“In addition, the possibility of an even sharper interest rate hike by the Fed of 50 basis points (bps), as opposed to the initial 25 bps expected by the market, is an event that we are watching keenly,” they say.
Furthermore, they write that while safe-haven asset classes such as the S-REITs may be a temporary shelter for investors, the reversal of geopolitical tensions may also see investments flow out of the sector.
Wong and Tan expect positive news on both the border opening and relaxed measures, which should start to show in metrics come 1H2022. However, there is some lag time in the interim, mostly in 2Q2022, say the analysts.
They have given a positive rating to the office, retail and hospitality sectors, with their top picks being Capitaland Integrated Commercial Trust (CICT), Suntec REIT, Fraser’s Centerpoint Trust (FCT) and Ascott Residence Trust (ART).
article_here
time of esg taggings 0.029594131046906114
https://www.theedgesingapore.com/news/cryptocurrency/fresh-block-dbs-abandons-retail-crypto-plans-axie-infinity-launch-delayed-and
DBS is not extending its crypto trading services to retail clients by the end of 2022, its CEO Piyush Gupta said at an annual general meeting on March 31, contrary to its earlier plans.
In a response to shareholder’s query, Gupta highlighted that regulatory bodies are “rightfully concerned” about retail access to cryptocurrencies. DBS’s members-only DBS Digital Exchange — available to accredited and institutional investors — recorded over $1.1 billion in trading value in the FY2021 ended December.
Meanwhile, Ukraine has raised over US$54.7 million in cryptoasset donations that will be given to the Ukrainian government and Come Back Alive, an NGO providing support to the military, according to new data from blockchain analytics firm Elliptic .
The spike in donations comes with notable contributions from Gavin Wood, founder of Polkadot, a cryptocurrency, of US$5.8 million and an anonymous donation of US$1 million in Tether.
Several donations have also come in the form of NFTs, according to a report by CNBC, with one CryptoPunk NFT worth over US$200,000 sent to the Ukrainian government’s Ethereum account and UkraineDAO auctioning off an NFT of the Ukrainian flag for US$6.5 million in ethereum (ETH). According to Elliptic, the proceeds of the sales will be donated to Come Back Alive.
Axie Infinity is delaying the launch of its “Origin” upgrade from March 30 to April 7, following hackers stealing US$625 million from the underlying Ronin blockchain earlier last week, according to a report by CoinDesk .
“While the game is ready for soft launch, we have decided to give the engineering and security team an additional window of time to deeply investigate all implications of the breach, before asking for their full attention to support Origin’s release,” Axie Infinity developer Sky Mavis wrote on its Substack.
The hack may be one of the largest exploits in DeFi history, with losses including 173,600 ETH and US$25.5 million in USD Coin (USDC). Sky Mavis, however, has promised to reimburse players who lost funds due to the hack.
Photo: Getty
article_here
time of esg taggings 0.05277363210916519
https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-downgrades-sph-reit-hold-recovery-already-priced-other-analysts
CGS-CIMB Research analysts Eing Kar Mei and Lock Mun Yee have downgraded SPH REIT to “hold” from “add” previously as they deem the market to have already priced in the REIT's recovery at its current unit price.
Eing and Lock have kept their target price on SPH REIT at 95 cents.
“The REIT has one of the lowest gearing levels (30.1% in 2QFY2022 ended February) among Singapore REITs (S-REITs) which gives it ample firepower for acquisitions,” they write in their report on April 1.
“However, it is trading at [a] 5.4% distribution per unit (DPU) yield, near its 5-year average of 5.3%. This is also lower than retail REITs’ average yield of 5.6%,” they add.
The analysts’ report comes after the REIT reported stronger numbers for the 1HFY2022, which came in line with their full-year forecast.
For the period, SPH REIT reported a distribution per unit (DPU) of 2.68 cents, up 9.8% y-o-y.
The REIT’s DPU for the 1QFY2022 and 2QFY2022 came in at 1.24 cents and 1.44 cents respectively.
As at end-February, the REIT’s portfolio occupancy rate remained high at 98.4%.
Tenant sales during the 1HFY2022 increased 1% y-o-y.
On this, Eing and Lock say they see tenant sales to improve going forward, due to the relaxed restriction measures and as consumers adapt to living with Covid-19 as an endemic.
In addition, the analysts are expecting rental pressures to ease this year due to fewer Covid-19 restrictions compared to that in 2021. The REIT’s Paragon Mall in Orchard Road is also a prime beneficiary of easing border measures.
To them, any accretive acquisitions are upside risks to the REIT, while weaker-than-expected rental reversions, as well as a worse-than-expected impact from higher operating expenses are downside risks to the counter.
The team at DBS Group Research has kept “hold” on SPH REIT with a target price of 96.4 cents that’s tagged to the cash offer made by Cuscaden Peak.
In an update dated April 4, the team also noted that the REIT’s topline and DPU stood in line with their full-year estimates.
That said, the REIT seems to be seeing the first sign of higher utility costs as its operational metrics stood at an inflexion point.
Its Singapore portfolio reported higher operating expenses with a 30% increase in utilities, as opposed to 1.5% of gross rental income (GRI).
“Local utility rates are generally floating in nature, while other expenses such as cleaning & maintenance continue to be largely fixed in nature,” writes the team. “On the other hand, higher utility costs in Australia are largely sheltered on fixed terms.”
Like the analysts at CGS-CIMB, the DBS team also sees favourable catalysts for Paragon Mall as borders reopen.
“Paragon Mall saw some uptick in medical tourist, with borders reopened with Indonesia, a key market for medical tourists. Amongst trade sectors, watches & jewellery was amongst the best performers, while luxury products continue to feel the heat from the lack of tourists,” writes the team.
“The reopening of atrium sales, alongside reopening of borders, will be key catalysts for Paragon in the coming quarters as a key luxury mall along Orchard Road,” they add.
Maybank Securities analyst Chua Su Tye has also kept his "hold" call on SPH REIT with an unchanged target price of 95 cents.
While he notes that the REIT's metrics for the 1HFY2022 are "healthy" and in line with his full-year estimates, acquisition visibility remains low.
"Clementi Mall’s resilience however reinforces our preference for suburban retail. As a result, we prefer Frasers Centrepoint Trust (FCT) for its concentrated suburban mall portfolio," he adds.
Chua has given FCT a "buy" call with a target price of $2.90.
That said, the analyst expects Seletar Mall to be a priority acquisition target. The mall is currently owned by the REIT's sponsor, SPH. In this case, a fully debt-funded acquisition would lift his DPU target for the FY2022 by around 8%, says Chua.
"However, with [the] restructuring of its sponsor likely to be a priority, inorganic growth is likely to take a back-seat," he adds.
To this end, Chua sees SPH REIT trading sideways in the near term as it is bound by a chain offer from SPH's ongoing privatisation exercise.
As at 10.15am, units in SPH REIT are trading flat at 97 cents, or an FY2022 P/B of 1.07x and dividend yield of 5.44%, according to CGS-CIMB’s estimates.
article_here
time of esg taggings 0.0336251650005579
https://www.theedgesingapore.com/capital/brokers-calls/dbs-expecting-centurion-come-back-dividend-play
DBS Group Research analysts Woon Bing Yong and Lee Keng Ling have kept a “hold” rating on Centurion Corporation with an increased target price to 42 cents from 38 cents. DBS will also be suspending coverage on the stock as it reallocates research resources.
In light of increased global opening as restrictions due to the Covid-19 pandemic ease, Singapore’s purpose-built worker accommodation (PBWA) occupancies are expected to improve progressively over FY2022 ending December 2022 and FY2023. According to a senior government official, this comes at a point where the foreign labour crunch is targeted to be resolved in the next few months as well.
At the same time, a new academic year coupled with the relaxation of border restrictions in Australia and the UK should mark a point of recovery for student arrivals and thereby purpose built student accommodation (PBSA) occupancies, the analysts expect.
The analysts foresee Centurion to return as a dividend play, underpinned by improved occupancies across its PBSA and PBWA segments. FY2022 and FY2023 dividend per share (DPS) are projected to come in at 1.5 cents and 2 cents respectively, representing a yield of 4.2% and 5.6% respectively.
On the other hand, the analysts are wary about the group’s capex moving forward due to new regulations for workers’ dormitories set by the government, which includes an expected reduction in capacity at the group’s worker dorms.
Although the analysts claiming that early information resulting in rental rates steady, the group is expected to incur additional capex to adapt the dormitories to the new standards. Instead of an upfront lump sum capex, Woon and Ling believe that this will likely be something that will take place over a period of time.
Some key risks the analysts note include unfavourable changes in regulatory environment, foreign exchange volatility, sustained deterioration in economic outlook for Singapore and Malaysia affecting foreign worker demand and possible re-implementation of border restrictions.
As at 3.29pm, shares in Centurion are trading at 1 cent higher and 2.82% higher at 36 cents at a FY2022 P/B ratio of 0.4x and 4.2% dividend yield.
article_here
time of esg taggings 0.030196087900549173
https://www.theedgesingapore.com/capital/us-economy/higher-yields-seen-headwinds-investors-fomcs-hawkish-stance-could-intensify
The US Federal Reserve’s move to raise interest rates by 25 basis points during the Federal Open Market Committee (FOMC) meeting on March 15 came as no surprise to analysts.
At the meeting, one of the members, St. Louis Fed president James Bullard, even voted for a 50 basis point rate hike, which chairman Jerome Powell did not rule out.
If core inflation, which is currently above 6% of the consumer price index (CPI) does not return to the Fed’s goal of 2%, a 50-basis point rate hike is likely, notes Bank of Singapore’s (BoS) chief economist Mansoor Mohi-uddin.
On March 21, Powell continued to turn more hawkish, warning that interest rates may need to see a further increase at upcoming Fed meetings.
To Mohi-uddin, Powell’s remarks thus “add upside risk to our forecast that the Fed will stick with 25bps rate increases at each remaining meeting of the year when raising the fed funds rate to 1.75-2.00%”.
Powell had also hinted that the Fed could begin quantitative tightening (QT) in May to ease inflationary pressures.
Given the Fed’s resolve to cut inflation, Mohi-uddin is now expecting seven rate hikes this year from five increases before. He has, however, kept his estimates of seeing four rate hikes in 2023, the same.
"This implies [that] we see the fed funds interest rate reaching 2.75-3.00% by the end of next year, a steeper path of tightening to our previous forecasts,” writes the analyst in his March 17 report
It also implies that his 10-year treasury yield forecast at 2.35% over the next 12 months is likely to be hit earlier,” he adds.
Under Mohi-uddin’s estimates, he also sees higher yields being headwinds for investors, although the 10-year treasures would need to breach 2.80% to 3.00% for the decades-long downtrend in yields to reverse to the detriment of risk assets.
In addition, yield curves are likely to flatten further and may invert temporarily but reopening from the pandemic will keep US growth firm and reduce the risks of stagflation this year.
“Lastly, the USD will benefit from the Fed hiking faster compared to other central banks”, says the economist.
Fed rates to raise increase at every meeting in 2022: DBS
To DBS Group Research’s chief economist Taimur Baig and senior rates strategist Eugene Leow, the developments at the FOMC meeting were “unsurprising” to global markets.
However, the analysts estimate headwinds may materialize for emerging markets (EMs) from a hawkish Fed, as has already been the case.
“But most Asian economies have undergone repeated stress tests with capital flow volatility in the past years, and have shown that their relatively improved reserves and external account position can handle episodes of risk on and off. As long as China’s macro risks are contained, Asia can navigate the Fed’s path,” they write in their March 17 report.
The way they see it, the FOMC’s statement was “focused on price pressures and yet comfortable that higher interest rates and quantitative tightening won’t undermine the economic outlook materially”.
“The Fed’s statement and actions reflect no concern about stagflation, period,” write the analysts, who note that the Fed now expects the policy rate to be at 2.88% in 2023 and 2024.
“[This implies] restrictive monetary settings compared to the neutral of 2.375% (downwardly revised from 2.50%),” they add.
Furthermore, the median projections made by the members of the FOMC are “constructive” for the medium term, note the analysts from DBS.
“Real GDP growth of over 2% (i.e., above potential) is expected through 2024, with no worsening of labour market conditions and core inflation heading toward 2%. Are these reasonable? We think so, especially if inflation expectations remain anchored, which has been the case so far,” they write.
“The continued stability of inflation expectation would be a function of wage and goods price pressure to dissipate as pandemic related disruptions fade,” they continue. “These two developments will make or break US economic outlook in the coming quarters, and will make the difference between the Fed making steady progress toward normalisation or playing catch-up that will un-nerve the markets.”
To this end, Baig and Leow are expecting the Fed to raise their rates in every meeting this year, which is six times, and then four more times in 2023. This would take the Fed funds rate to 2% by end-2022 and 3% by end-2023.
“The improved balance sheet of the households and corporates, we think the US economy is capable of absorbing these hikes. An economy that is growing by over 2% in real terms should be able to live with a real positive interest rate of around 1%,” they write.
“These hikes will come with some risks for those with high leverage, will likely strengthen the growth-to-value narrative in the equity markets, and some degree of spread widening in the credit market is likely,” they add. “The cyclical strength of the economy is substantial though, from balance sheet to the jobs outlook. As reflected in the FOMC statement, these developments need not cause major dislocation to wealth, investment, or consumption.”
Finally, DBS’s Baig and Leow are neutral on rates, noting that the Fed and the market are in agreement on rates out to 2023.
“It would be more interesting to fade extremes (in either direction) when they do occur. We are somewhat wary on duration (10-year onwards) and think that the market may be underestimating QT (we think QT will start in the immediate two meetings) and the eventual selling of mortgage-backed securities or MBS (possible in 2023),” they write.
“We think that the curve might be overly flat in the short term and there is scope for modest steepening. However, in the medium term, a very flat (to inverted curve) towards the tail end of tightening (2H2023) is probably hard to avoid,” they add.
Cumulative basis point increases expected in 2022: UOB
UOB’s senior economist Alvin Liew says the FOMC meeting on March 15 to 16 was “visibly hawkish” as the Fed raised its rates by 25 basis points.
The Fed had also signalled that more rate hikes will follow with its focus on bringing inflation down.
“Given the explicit hawkish trajectory spelt out in the March FOMC, we now expect faster Fed Funds Target rate (FFTR) hikes by clips of 25 basis points in every remaining meeting of this year,” writes Liew in his March 17 report.
This implies a cumulative increase of 175 basis points in 2022, bringing the FFTR higher to the range of 1.75% to 2.00% by end of 2022, up from Liew’s previous forecast of 150 basis points in hikes to 1.50% to 1.75% by the end of the year.
“We also see a risk that the Fed could still surprise with a more aggressive 50-basis point hike in May, especially if March’s CPI inflation (due on April 12) prints well above 8% y-o-y,” he adds.
Liew has also projected three more rate hikes of 25 basis points in 2023 before the Fed concludes its current rate hike cycle.
“[This is estimated to bring] the terminal FFTR to 2.50%-2.75% by 3Q2023 (from the previous terminal rate forecast) [of] 2.25-2.50% by early 2024,” he says.
On the outlook for QT, the UOB economist expects the Fed to “issue the addendum to the Policy Normalization Principles and Plans in the upcoming May 2022 FOMC, followed by the formal announcement of QT to be made in the June 2022 FOMC and to start in July 2022”.
“[This is a] much shorter time gap between quantitative easing (QE) taper and the first policy rate hike when compared to the 2017-2019 episode which was three years apart,” he says.
Other analysts say…
The hike at the FOMC meeting in March was more hawkish than expected by investors, as well as the market, say analysts at Amundi Asset Management, Jonathan Duensing, Timothy Rowe and Paresh Upadhyaya.
The way they see it, the short end of the US yield curve is “more appropriately priced now that the market has discounted a more aggressive tightening cycle”.
“The long end of the US yield curve will potentially be influenced by geopolitics, growth prospects and inflation expectations,” they add.
“Should US inflation expectations become unanchored, the Fed has expressed a willingness to adjust policy more aggressively. For risky assets, the Fed’s general affirmation of market expectations is supportive, as near-term policy uncertainty wanes.”
According to the team at DWS, the impact of higher US interest rates will be limited for US real estate and private infrastructure.
“In a potential stagflation scenario in Europe, core-RAB regulated infrastructure may outperform in the medium-term, but diversification across core plus and value-added strategies would arguably still be preferable from a long-term investment perspective,” the team writes.
“Similarly, in US real estate, higher short-term rates will not necessarily drive longer-term rates higher. To the extent that longer-term rates are rising, it is largely due to rising inflation, which is positive for real estate. Real (inflation-adjusted) interest rates are still deeply negative. Real estate yields continue to offer an attractive spread against real rates on inflation protected government bonds,” they add.
Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International is keeping his expectations of a rate hike of three or four times this year, following Powell’s intention of bringing back price stability at the meeting.
“But the ensuing tightening conditions from a very hawkish Fed will damage growth,” he says.
“All in all, given our stagflationary baseline which got exacerbated by the Russia/Ukraine war, it appears that the Fed’s focus will weigh more on inflation fighting despite the uncertainty created by the situation in Ukraine based on the meeting [on March 15],” he adds.
“This creates further headwinds for asset markets as the central bank put remains further out of money in this cycle. From an asset allocation perspective, we remain cautious on both equities and credit,” he continues.
Allison Boxer, an economist at PIMCO says she expects the Fed to focus on the higher inflation as well as concerns on inflation expectations, compared to downside risks to growth in the next few months.
“As a result, our baseline forecast remains that there will be rate hikes at consecutive Fed meetings and a meaningful further tightening of policy throughout the year. This faster pace of tightening raises the risk of a hard landing further down the road and suggests a higher risk of a recession over the next two years,” she writes.
article_here
time of esg taggings 0.04773152293637395
https://www.theedgesingapore.com/capital/brokers-calls/maybank-securities-starts-grab-holdings-buy-tp-us432
Maybank Securities analyst Lai Gene Lih has initiated a “buy” call on Grab Holdings with a target price of US$4.32 ($5.88). The target price offers a potential upside of 30% to Grab’s last-closed share price of US$3.32 as at March 25.
Lai’s report on March 28 comes after the NASDAQ-listed counter saw its shares fall some 70% since its Spac merger in December 2021.
According to the analyst, Grab’s risk-reward is deemed “attractive” in the next 24 months as it strives for profitability.
On Dec 2, 2021 , shares in Grab made its debut on the NASDAQ, opening at US$13.06. The counter ended the day with its shares trading at US$8.75, down more than 20%.
The way Lai sees it, Grab, which is a regional superapp with businesses in ride-hailing, online food delivery and e-wallets, is a beneficiary of the economic digitisation and rising affluence in Southeast Asia.
Its superapp model also drives strong retention among its users.
According to Lai, the one-year retention of users who use over three offerings stands at a retention rate of 86% compared to the 37% of users who use just one offering.
“This makes Grab more efficient with incentives, which we see as key to its ability to achieve profitability over time,” the analyst writes.
Grab has given a total of US$80 in incentives per monthly transacting users in 2019; US$74 in 2021 and is expected to give US$65 in 2025.
Grab’s strong hyperlocal executive across Southeast Asia’s diverse countries, which allows it to scale its user base, is another positive.
“Grab has localised ‘boots-on-the ground’/ app-features/ transport modes, and even has its own proprietary maps and mapping technology to boost transit efficiency,” adds Lai.
In addition, Grab’s mobility offerings reduce travel time for its users compared to public transportation. For instance, it has reduced travel time for 20% of its users in Thailand and 70% in the Philippines.
On this, Lai expects the region’s economic reopening to drive the recovery of Grab’s mobility segment.
“Southeast Asia is witnessing a surge in increasingly affluent dual-income households, many with little time to cook at home and this is fuelling the food delivery and mobility businesses,” says Lai.
“Despite loosening restrictions, Grab observes deliveries becoming integral to daily life (average order value +41%/ transactions per monthly transaction user or MTU +28% vs. pre-Covid),” he continues.
As such, Lai has projected a mobility gross merchandise value (GMV) compound annual growth rate (CAGR) of 27% for the FY2021 to FY2025. He has also estimated normalised deliveries GMV CAGR of 28% for the same period. Normalised deliveries in FY2021 saw a 56% y-o-y increase, he notes.
However, any price wars from Grab’s competitors, or higher-than-estimated incentives may hurt Grab’s profitability, warns Lai.
“Rising inflation and/or regulatory changes that require pension contributions by Grab to driver-partners could also hurt its path to profitability,” he adds.
Furthermore, a resurgence of Covid-19 related lockdowns is a risk for mobility. Finally, co-founder Mr. Anthony Tan has 63% of voting rights (and owns 6%), which may create risks for minority shareholders who may find it difficult to exercise control over the company’s direction, says Lai.
To this end, Lai has forecast GMV and net revenue CAGR of 27% and 31% over FY2021 to FY2025 respectively.
“We are projecting Grab to deliver adjusted EBITDA/PATMI break-even by FY2024 and FY2025, respectively,” he says.
“As regional economies reopen, stronger than expected mobility segment recovery may be a catalyst,” he adds.
Shares in Grab closed 14 US cents higher or 4.24% up at US$3.44 on March 28 (US time).
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https://www.theedgesingapore.com/capital/brokers-calls/analysts-see-yangzijiangs-shares-re-rate-upon-successful-spin-estimated-tps
Analysts from Citi Research and DBS Group Research have kept their “buy” calls on Yangzijiang (YZJ) after the Mainboard-listed group announced that it had increased the share capital of its proposed investment business to $4.3 billion.
The analysts also believe that the group’s share price will re-rate following the successful completion of the proposed spin-off.
On March 25, YZJ said that it had increased the share capital of Yangzijiang Financial Holding (YZJFH), the entity that will soon be spun off from YZJ, to $4.3 billion comprising 3.95 billion shares, or $1.08 per share.
The amount is exactly the same as guided by YZJ’s management during the recent FY2021 results and doesn’t come as a surprise, notes Citi analyst Jame Osman.
“More importantly, we believe the move is an affirmation of YZJ’s intent to crystallize value via the spin-off, given that its core shipbuilding business is currently trading at a deep valuation discount, in our view,” the analyst writes in his report on March 27.
The spin-off is expected to be completed around the third quarter of 2022.
The way Osman sees it, a successful spin-off of the business is positive for YZJ’s main business.
“As we previously flagged, at YZJ’s current valuation, the market is essentially assigning almost zero residual value for YZJ’s core shipbuilding business vs its past 10-year through-the-cycle mean of 5.4x P/E,” the analyst writes.
“Even if we ascribe a more conservative value of 0.5x P/B multiple to its financial assets, it would yield an implied FY2022 P/E of 7x for its shipbuilding business,” he adds. “We continue to believe that a successful spin-off of its investment arm could drive a potential re-rating of YZJ on the basis of improved earnings quality and attract investors seeking more direct exposure to the company’s core shipbuilding business.”
So far, the valuation of the proposed entity has been the main concern for investors with the distribution of the shares of the new entity in specie to existing YZJ shareholders, in which some investors are concerned of a potential sell-off and valuation de-rating.
“We think these concerns may be overdone, considering that 90% of YZJ’s financial assets currently are liquid; classified under current assets. Management had flagged that it is targeting a potential valuation of 1x P/B. Ultimately, the shares of YZJFH could trade on a yield basis,” says Osman.
“Little is known at this stage in terms of [its] potential income distribution, although management has outlined broad plans for the asset management business and its structure,” he adds.
To Osman, YZJ has strong medium-term earnings visibility and momentum, with its record order book and delivery slots filled till 2024. The group also has a positive near-term industry outlook; the potential spin-off of its debt business is a key catalyst to its share price re-rating.
Osman has given YZJ a target price estimate of $1.98 based on a sum of the parts (SOTP) valuation methodology.
“Debt investments currently account for about 30% of the group’s total assets. We have accorded a 13x P/E multiple, a slight discount to +1 standard deviation historical mean, to YZJ’s shipyard operations given lower expected earnings volatility going forward as the shipping industry recovers; and also taking into account that: we expect the group to remain profitable, with respectable ROEs or return on equities (in excess of its peers); and to recognize significant strides the group has made in market share gains,” he writes.
“We value the group’s debt investments at 0.5x book, a slight discount to trading valuations of Chinese banks (0.7x) taking into account YZJ’s less developed credit controls when compared to banks,” he continues.
In his report, Osman sees weaker-than-expected margins from orders secured during the downturn disappointing contract-win quantum/or significant number of order cancellations; and the execution risk of projects as key downside risks to YZJ’s share price performance.
In a note dated March 27, DBS Group Research has given YZJ a target price estimate of $2.15, which values YZJFH at 0.7x P/B of 77 cents. The remaining shipbuilding-related business is valued at $1.38.
“Assuming fair value of YZJFH at 77 cents, Yangzijiang’s current share price of $1.46, only value shipbuilding-related business at 69 cents per share, implying unwarrantedly low valuation of 0.8x P/B and [an estimated] 6x P/E despite 13% ROE and potential upside to 4% dividend yield,” says the brokerage.
In its note, the brokerage believes that YZJ is set to re-rate closer to its target price of $2.15 following the completion of the spin-off.
If all goes to plan, the listing of YZJFH could be completed by end-April or early May this year, says the brokerage.
As at 4.53pm, shares in YZJ are trading 3 cents higher or 2.055% up at $1.49.
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time of esg taggings 0.03455827618017793
https://www.theedgesingapore.com/capital/brokers-calls/dbs-says-sti-reaching-near-term-cap-reveals-inflationary-environment-picks
As the optimism on the reopening of Singapore lifts the benchmark Straits Times Index (STI) to slightly above a 13.6x 12-month forward P/E, DBS analysts Yeo Kee Yan and Woon Bing Yong note that the index may be close to a near-term cap of 3,450 points.
While April tends to be a “benign month” for the market as stocks hold their prices ahead of ex-dividend dates, the analysts note that the current global factors may cause a cap on the index’s near-term upside.
Factors identified in the analysts’ report on March 28 include the inflation outlook, supply chain disruptions because of the Russia-Ukraine war and China’s zero-Covid strategy, and a general caution ahead of the size of the rate hike at the US Federal Reserve’s May Federal Open Market Committee (FOMC) meeting.
On this, the analysts have highlighted the following stocks as their picks to hedge against the inflationary environment.
These are: UOB and OCBC for banks; SATS, SIA Engineering, and Genting Singapore for aviation and tourism recovery; and AEM and UMS for semiconductor stocks; and Bumitama for crude palm oil (CPO) planters.
These counters were selected as they fit the following criteria: They are favourable sectors in the current inflationary environment, like banks, upstream commodity producers, and those riding on the aviation and tourism sectors’ recovery.
Furthermore, these stocks ride on structural changes and the sustainability trend, are less likely to be affected by supply chain disruptions, and are in a net cash position.
Border reopening beneficiaries
On March 24, the Singapore government announced that it was significantly reducing international and domestic restrictions, a move which has coincided with the wider Asean reopening.
Further to their inflationary picks, the analysts have also identified counters that will benefit from the recent relaxation of international and domestic measures.
They are: SATS, CDL Hospitality Trusts (CDLHT) and Far East Hospitality Trust (FEHT). Genting Singapore was also included for the gaming sector.
In addition, ComfortDelGro (CDG) and Kimly will benefit from the increase in the number of group sizes, the higher number of employees being allowed to return to the office, as well as the resumption of nightlife activities.
Finally, retail REITs such as Frasers Centrepoint Trust (FCT) and CapitaLand Integrated Commercial Trust (CICT), should also benefit from the reopening with their central mall exposure.
Suntec REIT could also see increased MICE (or meetings, incentives, conferences, and exhibitions) activity following the increase in the capacity limit for large events to 75%.
On the other hand, they warn that China’s zero-Covid policy amid the Omicron outbreak should result in more city lockdowns in the weeks ahead.
What this means is that manufacturers like Valuetronics, Aztech, and Nanofilm are vulnerable, as their major factories are situated in China.
Furthermore, Covid-19 restrictions in the country may also impact footfall in malls and mobility, which affects China retail REITs Capitaland China Trust (CLCT) and BHG REIT. Other stocks that could experience a negative impact include port operator Hutchison Port Holdings Trust (HPHT) and jet fuel supplier China Aviation Oil (CAO).
As at 12.58pm, the STI is trading at 3425.82 points, up 12.13 points or 3.56% higher compared to its previous close.
article_here
time of esg taggings 0.057231488870456815
https://www.theedgesingapore.com/capital/brokers-calls/dbs-remains-neutral-japfa-it-expects-its-near-term-outlook-remain-subdued
DBS Group Research analyst Cheria Christi Widjaja has kept “hold” on Japfa as she sees the group’s near-term outlook to remain subdued due to the limited room for margin improvements in FY2022.
“We foresee cost pressure lingering in 2022, as raw material and logistics costs stay elevated,” says Widjaja. This is in light of the recent Russia-Ukraine crisis, which has impacted a variety of commodity prices such that materials including soybean meal and corn skyrocketed recently. The analyst notes how this stands to limit margin improvements from demand recovery amid gradual reopening.
Moreover, in light of the resurgence of the African Swine Flu (ASF) outbreak, the analyst believes that there is a weak near-term outlook for Japfa’s Vietnam swine operation. This is compounded by existing Covid-19 movement restrictions that influenced softer swine prices.
However, Widjaja remains positive on certain aspects of Japfa’s business, such as strong broiler prices in Indonesia with the upcoming Ramadhan season and favourable raw milk prices in China.
Some risks include a surge in Covid-19 infections, higher-than-expected raw material costs, weaker-than-expected consumer demand, and greater or continued outbreak of diseases that would lead to price volatility.
In her report dated March 24, Widjaja has kept her target price unchanged at 67 cents, as she has kept her EBITDA forecasts for the FY2022/FY2023 the same following Japfa’s FY2021 results.
“We used a sum-of-the-parts valuation and pegged our valuation of Animal Protein Indonesia to our target price for Japfa Comfeed Indonesia (JPFA) at 2,060 rupiah (19.46 cents), while valuations of its Animal Protein Others and Dairy segments are based on FY2022 EV/EBITDA,” she writes.
“Our target price implies a 7.9x FY2022 P/E. Japfa currently trades at an FY2022 EV/EBITDA of 5x and an FY2022 P/E of 7x, which is lower compared to the average of its regional peers in the animal protein and dairy sector, which is at an FY2022 EV/EBITDA of 10x and an FY2022 P/E of 14x,” she continues.
As at 11.19am, shares in Japfa are trading at 1.5 cents up or 2.36% higher at 65 cents at an FY2022 P/B of 0.6x and dividend yield of 1.6%.
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time of esg taggings 0.028437340166419744
https://www.theedgesingapore.com/capital/brokers-calls/dbs-ups-bumitama-agris-tp-1-it-sees-strong-earnings-prospects-fy2022
DBS Group Research analyst William Simadiputra is keeping his “buy” call on Bumitama Agri Limited (BAL) with a higher target price of $1 from 75 cents previously as he sees the company’s strong earnings trend continuing in FY2022.
Furthermore, the counter is currently trading at an undemanding FY2022 P/E of 7.8x, which is well below its average P/E multiple of 9.7x.
“We believe BAL’s positive 2022 earnings prospects are not priced in yet, as it is still trading at a single-digit P/E multiple,” writes the analyst in his March 21 report.
In addition to his higher target price estimate, Simadiputra has also raised his price forecast for crude palm oil (CPO) to US$850 ($1,153.82) per metric tonne (MT) for FY2022 and FY2023, bringing BAL’s earnings estimates to 1.90 trillion rupiah ($179.7 million) for the FY2022 and 2.06 trillion rupiah for the FY2023.
In his report, the analyst notes that the company will be able to manage rising costs this year on the back of efficient operations and strong profitability on its decent nucleus estates CPO yield despite the rising costs of fertiliser.
BAL’s estates are in the prime-age cycle with an average age of just 13 years old, he adds.
That said, the company may face risks in the form of a reversal in the prices of CPO, where prices could decline on the back of stronger-than-expected pressure from soybean price or higher-than-expected CPO output, both in Indonesia and Malaysia in 2022.
As at 3.54pm, shares in BAL are trading 0.5 cent lower or 0.66% down at 75.5 cents.
article_here
time of esg taggings 0.039181489031761885
https://www.theedgesingapore.com/capital/brokers-calls/dbs-slashes-medtecs-target-price-225-cents-possible-losses-fy2022
DBS Group Research analysts Woon Bing Yong and Ling Lee Keng have maintained their “hold” call on Medtecs International as the company saw an 87% y-o-y decline in earnings of US$17.3 million ($23.5 million) for the FY2021 ended December.
The lower earnings were attributable to the lowered demand amid the improving Covid-19 situation.
“The continued performance decline in 2HFY2021 has brought about concerns on the longer-term sustainability of Medtecs’ earnings. Despite elevated demand for personal protective equipment (PPE) deliveries in England, revenue for Medtecs did not appear to increase. This could hint at a potential loss of market share, possibly to domestic PPE producers,” write the analysts in their March 23 report.
As it is, Medtecs missed the analysts’ previous estimates due to lower global demand and lower average selling prices (ASPs) for their PPEs and face masks.
There did not seem to be additional demand in spite of the emergence of new Covid-19 variants, they note.
“Going forward, we see continued uncertainty for the stock, even as it expands its manufacturing capacity. We are suspending coverage of Medtecs due to a reallocation of coverage resources,” they write.
DBS is the only house covering the stock, with the analysts identifying three different scenarios based on different levels of post-Covid PPE stockpiling demand.
Based on the current trajectory, Woon and Ling are expecting Medtecs to report losses in the FY2022.
“As such, we have shifted our valuation methodology from a P/E multiple basis to a discounted cash flow (DCF) basis,” they add.
To this end, Woon and Ling have slashed their target price estimate on the counter to 22.5 cents from 92 cents previously.
Furthermore, key risks to Medtecs’ share price include the quicker-than-expected vaccine distribution progress, low levels of post-pandemic stockpiling, competition from domestic suppliers, and higher raw material prices.
As at 3.52pm, shares in Medtecs are trading 0.5 cent higher or 2.08% up at 24.5 cents, or an FY2022 P/B of 0.5x with no dividend yield.
article_here
time of esg taggings 0.032381617929786444
https://www.theedgesingapore.com/news/brokers-calls/dbs-lifts-first-resources-tp-250-strong-cpo-price-and-earnings-prospect
DBS Group Research analyst William Simadiputra has kept his “buy” call for First Resources, citing rising earnings prospects on strong crude palm oil (CPO) price outlook and production volume growth.
In his March 21 report, Simadiputra believes there is room for the share price to further perform this year, as First Resources’ P/E multiple is still below its 5-year average of 15x. To this end, he raises his target price to $2.50 and lifts his earnings forecast for FY2022 by 33% to US$194 million.
The plantation company's CPO yield will continue to perform above its peers in 2022, adds Simadiputra. "First Resources could deliver stronger earnings this year due to its unhedged sales volume amid rising CPO prices. Last year, FR’s earnings performance underperformed its peers due to hedged CPO selling prices and we only saw a meaningful improvement in 4Q21," he says.
In 2022 and 2023, DBS’s CPO benchmark price assumption is US$1,125 per metric tonne while the selling price assumption is US$850 per metric tonne. With this, Simadiputra forecasts First Resources to achieve US$48 million earnings per quarter in 2022.
This is a conservative estimate, he explains, considering that First Resources had booked earnings of US$63 million and US$53 million in 4Q2021 and 3Q2021 respectively.
“Back then, CPO benchmark price had averaged US$1,215 per metric tonne and US$1,064 per metric tonne respectively. Despite the outlook for higher CPO selling prices, we anticipate higher cash cost per ton for nucleus CPO on higher fertiliser cost. However, we believe First Resources can weather rising costs on strong yield performance which will keep the cost per hectare low,” he adds.
As at 12.08pm, shares in First Resources are trading 1 cent higher or 0.47% up at $2.12.
article_here
time of esg taggings 0.02900254586711526
https://www.theedgesingapore.com/news/brokers-calls/wilmar-deserves-trade-premium-plantation-peers-pe-multiples-dbs
With minimal earnings downside risk, Wilmar International deserves to trade at a premium to its plantation peers’ PE multiples, says DBS Group Research analyst William Simadiputra.
In his March 21 report, Simadiputra says Wilmar’s packaged consumer products’ margins and earnings can help to buffer its earnings performance when commodity prices reverse.
“The consumer downstream business should continue to bear good margins and ROE in the future, especially when Wilmar’s consumer products division’s performance recovers from higher cost pressure via efficiencies or price hikes,” says Simadiputra.
Wilmar is trading at around 11x FY2022 P/E. The company deserves a higher valuation multiple considering its earnings track record and position as one of the leading tropical oil refiners and food processors in Asia, on top of its expansion to branded consumer goods and central kitchens, Simadiputra elaborates.
On the back of the high commodity price environment this year, Simadiputra assumes the earnings split of Wilmar’s China and non-China operations in 2022 to be 30% and 70%, versus its previous assumption of 40% and 60%.
DBS values the China operations at 20x FY2022 P/E while its operations outside of China is pegged to 15.0x FY2022 P/E. Simadiputra believes the P/E multiple for Wilmar’s Chinese subsidiary Yihai Kerry Arawana (YKA) is fair, considering YKA is currently trading at 40x FY2022 consensus P/E.
“Thus, our implied equity value of YKA is only US$11 billion ($14.93 billion_ versus the current market capitalisation of US$38 billion, further upside risk to Wilmar’s valuation,” says Simadiputra.
Outside of China, Wilmar’s branded consumer goods division has a leading presence in India and Indonesia given its sizable edible oil refining capacity in both regions as well as 240,000 hectares of palm oil plantation assets. “Wilmar’s operations beyond China consists of consumer-branded goods such as Sania in Indonesia, which enables it to move further into the downstream consumer market segment in the country.”
Wilmar is one of RHB Group Research analyst Hoe Lee Leng’s top picks as one of the Indonesian planters with downstream exposure. This is amid the flip-flop move by the Indonesian government, which may lead to slightly negative impact to pure planters with Indonesian exposure.
The Indonesian government made several changes last week, starting with removing the IDR14,000 per liter price ceiling for packaged cooking oil while keeping the price subsidy for bulk cooking oil. Subsequently, it revoked the 30% domestic market obligation (DMO) just a week after raising it from 20%.
Additionally, the Indonesian government also raised the export tax and levies on crude palm oil (CPO) to US$575 per tonne limit if price exceeds US$1,500 per tonne.
Concurring with Hoe, UOB Kay Hian Research analysts Leow Huey Chuen and ​​Jacquelyn Yow note that the Indonesian upstream players would suffer the most impact as they are the ones who bear the export tax and levy. “Based on our estimation, the CPO reference price for April will be closer at US$1,700 per tonne or higher and hence the maximum duty and levy will be US$575 per tonne,” they add.
Raising its FY2022 earnings estimate by 16% to US$1.89 billion, DBS believes Wilmar should be able to maintain its strong performance this year. Acknowledging the forecast to be above consensus, Simadiputra says he believes Wilmar’s operations will be able to offset the impact of rising commodity prices.
DBS, UOB Kay Hian and RHB have all kept their “buy” calls for Wilmar at a target price of $6.67, $5.50 and $5.30 respectively.
As at 10.37am, shares in Wilmar are trading 8 cents higher or 1.7% up at $4.77.
Photo: Bloomberg
article_here
time of esg taggings 0.03206570399925113
https://www.theedgesingapore.com/capital/brokers-calls/stick-s-reits-growth-sectors-amid-inflation-and-high-oil-prices-dbs
Amid persistently high inflation rates coupled with rising oil prices, businesses are now looking at higher utilities and petrol costs, as well as labour costs. Landlords, too, will have to face higher utility and maintenance costs when their contracts are rolled over to the 2HFY2022 and FY2023.
With most Singapore REITs (S-REITs) as landlords, operational costs in maintaining the common areas, will have to be borne as well.
While some of these costs can be defrayed through service charges, landlords will still have to bear some of the burden going forward, note DBS Group Research analysts Derek Tan, Rachel Tan, Dale Lai and Geraldine Wong.
“In the most recent meetings, we see more questions surrounding the impact of higher utilities and maintenance contracts on net operating income and distributions,” they write in their report dated March 18.
“In our analysis and engagement with various companies, the spike in utilities and maintenance will indeed be an overhang but overall impact is varied and manageable,” they add. “We believe that the ability to continue growing revenues strongly at [around] 20% in FY2022 will be a key mitigator to the rise in operational costs.”
Potential impact on margins
However, the analysts believe that a part of the price increases, such as oil, may be temporary due to the current geopolitical crisis and supply disruption.
“Therefore, the impact of these higher costs may be spread out over several years, depending on the timing of the expiry of the current maintenance and utility contracts”, they write.
Should utilities rise 100% and maintenance costs go up by 10%, however, the analysts have estimated that net property income (NPI) margins may be lowered by 0.8 percentage points to -3.7%, with a larger decline seen industrial-focused S-REITs due to their bigger exposure to both maintenance and utilities.
The lower NPIs translate to a possible drop in distributions per unit (DPUs) of around 1.8% to 6.7%, with the warehouse sector seeing the lowest declines of c.1.8%.
Warehouse sector least affected by rise in operational costs
To this end, the analysts have identified the warehouse sector – mainly ambient warehouses – as one that will be most shielded from the rise in operational costs.
This is given the sector’s efficient footprint, in which the analysts see the least downside to earnings on the back of rising costs.
Potential impact by S-REIT sub-sectors
Within the office sub-sector, majority of the utility costs are borne by tenants, while utility costs for common areas are reimbursed via a service charge to tenants. Some office landlords could have locked in a utility rate for one to two years to mitigate the rising rates, note the analysts.
Green buildings with energy-saving features may also help reduce utility costs, they add.
Within the retail sub-sector, the REITs’ utility contracts help to hedge the effect of utility hikes for up to one to two years. Furthermore, the service charge paid by tenants can be used to defray costs incurred for common areas.
In the industrial sub-sector, most utility costs are recoverable from tenants in general industrial buildings such as business parks. However, these buildings generally has more common space and services compared to other industrial property types, and will be most impacted by the rising costs.
Logistics-focused industrial S-REITs such as ambient warehouses have minimal impact as they are very space efficient and have minimal common spaces. However, climate-controlled warehouses may be impacted if utility charges are set on a fixed rate.
Data centres will also face minimal impact, as leases are either triple-net or utility costs are charged directly to tenants.
Finally, within the hospitality sub-sector, the impact is not material as they are mainly borne by the master lessor.
That said, the hike in utility costs will be more visible in S-REITs’ European and US portfolios.
“Similar to the other subsectors, some properties have secured fixed rates with energy brokers to mitigate the impact of a utility cost hike,” write the analysts. “Longer stay lodging assets typically come with a cap on utility usage whereby guests will pay if they exceed the utility cap.”
S-REITs to still be able to deliver two-year DPU CAGR of 7.4%
In their report, the analysts estimate that the S-REIT sector is still able to deliver a DPU growth compound annual growth rate (CAGR) of 7.4% (compared to 8.0%) before, with sector yields still attractive at an estimated 6.0% despite the rising cost pressures.
“Assuming the highest 3.0% cut in margins for other sectors (overseas-focused REITs, healthcare, and hospitality), we find that the growth trajectory for the sector is potentially marginally reset lower by 30 basis points, to 7.7% (ranging 2.8% to 28.0%) from 8% (ranging 3% to 30%),” write the analysts.
“As such, we remain comforted that the S-REITs’ growth trajectory remains intact for most sectors, despite the worrying trend of higher operational costs remaining an overhang for the sector in the near term,” they add. “Based on our sensitivity analysis, every 100% hike in utilities, in our estimates, will cut our DPU by 4.0% and growth trajectory by 40 basis points.”
Stick with ‘growth sectors’
On this, the analysts have recommended investors to “stick with ‘growth sectors’, given their ability to deliver higher distributions per unit (DPUs) despite these costs pressures”.
“In addition, we have added Mapletree Logistics Trust (MLT) to our top eight names.”
As at 2.53pm, the iEdge S-REIT Index, Singapore’s S-REIT benchmark, is trading 6.97 points higher or 0.528% up at 1,328.22 points.
Photo: MLT
article_here
time of esg taggings 0.03672464797273278
https://www.theedgesingapore.com/news/banking-finance/mas-slaps-10-year-prohibition-orders-against-former-dbs-wealth-planning-manager
The Monetary Authority of Singapore (MAS) has issued 10-year prohibition orders (POs) to Marcus Loh Thim Mun, a former wealth planning manager with DBS Bank.
The orders took effect on March 16
They were issued following Loh’s convictions in the state for offences involving fraud or dishonesty, namely cheating, forgery and using the benefits of his criminal conduct.
Under the orders, Loh is not allowed to provide any financial advisory services, or take part in the management of, acting as a director of, or becoming a substantial shareholder of any financial advisory firm under the Financial Advisers Act 2001.
He is also prohibited from performing any regulated activity or from taking part in the management, acting as a director, or becoming a substantial shareholder of any capital markets services firm under the Securities and Futures Act 2001.
Between October and November 2018, Loh, as a representative of DBS, deceived seven clients into transferring a total of $490,000 to his personal bank account.
According to MAS, Loh had falsely informed some of these clients that their monies were being placed in fixed deposit accounts with DBS. Then former wealth planning manager had also told a client that he could participate in a DBS share ownership scheme through him and forged a letter confirming the placement of the client’s monies in the scheme. The monies were used by Loh to purchase virtual credits on an unlawful gambling site.
Loh was charged with cheating and forgery on Jan 6, 2021, under the Penal Code. He was also charged of using the benefits of his criminal conduct under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. He was sentenced to 33 months imprisonment.
“Loh’s actions have given MAS reason to believe that he will not perform financial advisory and capital markets services honestly. While Loh is no longer an appointed representative in Singapore, the prohibition orders were issued against him to safeguard the integrity of Singapore’s financial sector,” reads the statement by MAS released on March 18.
Photo: Bloomberg
article_here
time of esg taggings 0.050140514969825745
https://www.theedgesingapore.com/news/sustainability/climate-impact-x-launches-global-carbon-marketplace-appoints-directors
Climate Impact X (CIX) has announced the launch of Project Marketplace, a Singapore-based digital platform for businesses and carbon project suppliers to list, discover, compare, buy and retire quality carbon credits.
According to CIX, the marketplace will remove barriers for companies to access quality credits, enabling businesses of all sizes to participate in the voluntary carbon market.
"The platform will offer robust information on projects, along with third-party ratings and satellite monitoring technology to facilitate the growing interest, and create greater trust, in the voluntary carbon market," reads a March 16 press release.
One project on offer is the Tambopata-Bahuaja Biodiversity Reserve in Peru. The project creates an economic buffer zone around a 573,299-hectare forest that is critical habitat to 30 threatened species including the Giant Otter, Blue-Headed Macaw and Giant Armadillo. It also helps smallholder farmers transition to sustainable cocoa production, restores degraded land and helps relieve deforestation pressures by working with local and indigenous communities, says CIX.
Project Marketplace currently offers credits from nature-based projects, and aims to expand into other credits later this year.
Jointly established by DBS Bank, Singapore Exchange (SGX), Standard Chartered and Temasek, CIX is a global marketplace and exchange for high-quality carbon credits.
CIX also announced today the members of its board of directors. They include Mikkel Larsen, CEO of CIX; Piyush Gupta, CEO of DBS; Loh Boon Chye, CEO of SGX; Bill Winters, group CEO of Standard Chartered; Dilhan Pillay Sandrasegara, executive director and CEO of Temasek Holdings; and Claire O’Neill, co-chair of the World Business Council for Sustainable Development Imperatives Advisory Board.
The board will support the company as it drives investments in the voluntary carbon market and help connect CIX with relevant and influential knowledge and technology partners, says CIX.
“We are excited to have appointed a Board that brings both breadth of expertise and a global outlook,"  says Larsen. "Our board represents not just the strength of commitment from our shareholders but diverse views from beyond the corporate sector, all of which serves to enrich what we do. I have great confidence that the strengths of our individual board members will enable us to closely align our market strategy with our purpose and vision."
CIX will adopt a rotational chairperson system, with Gupta as the first chairperson of the board.
Also by CIX is the Auction, launching in 1H2022, a specialised digital venue for discovering prices of unique projects and standardised products.
CIX's Exchange, launching in 4Q2022, enables two-way spot trade of high-quality credits through standardised contracts. It will host meaningful liquidity and provide the market with clearer price transparency and risk management solutions.
Photo: Bloomberg
article_here
time of esg taggings 0.030392561806365848
https://www.theedgesingapore.com/news/new-appointments/dbs-promotes-current-deputy-ceo-dbs-china-new-country-ceo
DBS, on March 16, announced that it will be appointing Ginger Cheng as its new country CEO for DBS China.
Cheng’s appointment will be effective April 1.
She is currently the deputy CEO of DBS China and is the head of the bank’s institutional banking group (IBG) within the country.
Following her appointment, Cheng will be part of DBS’s group management committee.
In her 20-year career in DBS since 2001, Cheng has held progressively senior roles in IBG in both Hong Kong and China.
In October 2019, she was appointed Head of IBG China, and her remit was expanded to include the DBS China Deputy CEO role in September 2021. Under her leadership, DBS’ IBG business in China has grown exponentially, with increased connectivity across the region, says the bank.
Cheng will succeed outgoing CEO Neil Ge, who will be retiring from the bank in end-June, 10 years after he was appointed to the role.
As CEO of DBS China since June 2012, Go oversaw repositioning of DBS China’s consumer and SME business. He was also in charge of the sharpening of the institutional investors strategy and the establishment of a capital markets franchise.
During his tenure, DBS was one of the first banks to join China’s cross-border interbank payment system. It was also the first foreign bank in China to forge an alliance with the Shanghai International Energy Exchange.
“Under Neil’s leadership, DBS today has a growing franchise in China which we will continue to build on. It is testament to our deep bench strength and commitment to grooming talent that we have been able to appoint his successor from our slate of internal candidates. I am particularly delighted that we will further add to DBS’s already strong set of female leaders in top management,” says DBS CEO Piyush Gupta.
Shares in DBS closed at $33.87 on March 15.
Photo: Bloomberg
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time of esg taggings 0.027850810904055834
https://www.theedgesingapore.com/capital/brokers-calls/dbs-starts-hour-glass-buy-back-anticipated-record-fy2022-earnings
DBS Group Research has initiated “buy” on The Hour Glass with a target price of $2.62, which offers a potential upside of 30%.
The Hour Glass, which opened its doors in 1979, is mainly in the business of the sales and distribution of luxury and speciality watches. Today, it is one of the region’s leading speciality luxury watch retailers, with 53 retail boutiques in Singapore, Malaysia, Thailand, Vietnam, Hong Kong, Japan, Australia, and New Zealand.
In his March 15 report, analyst Paul Yong says he anticipates the luxury watch retailer to report record earnings in the FY2022 ending March 31.
According to the analyst, the record earnings are likely to be driven by the V-shaped recovery in the luxury goods industry in 2021.
In the 1HFY2022 ended September, the group saw record earnings with revenue and net profit rising 63% and 110% y-o-y respectively.
“We believe this is supported by the bullish stock market in 2021, which drove consumer sentiment, and the shift in domestic spending from travel towards luxury goods. We anticipate this trend to continue in 2HFY2022 on the back of seasonal demand and as consumption on luxury goods stays firm,” writes Yong.
“Over the longer term, we estimate the group to add six retail boutiques, which should drive a firm earnings growth of 12% by FY2025,” he adds.
That said, Yong sees a potential moderation of sales in the FY2023 due to the volatile stock market, though the “frontloading of spending ahead of GST hikes could lend some support”, he says.
That said, the longer-term industry uptrend looks to remain intact, thanks to the growing number of wealthy individuals in Asia.
“We observe a positive correlation of 0.67 between the number of high-net-worth individuals (HNWIs) in Asia and the group’s sales; that Asia’s wealthy are growing should bode well for the luxury goods players, including Hour Glass,” says Yong.
Shares in The Hour Glass closed 5 cents higher or 2.5% up at $2.05 on March 15.
article_here
time of esg taggings 0.05569352302700281
https://www.theedgesingapore.com/capital/brokers-calls/uob-yangzijiang-st-engineering-capitaland-investment-among-dbss-picks-hedge
Amid the uncertainties due to the ongoing war in Ukraine, DBS Group Research analysts Yeo Kee Yan and Janice Chua have identified seven counters that investors can use as a hedge.
These are: UOB, Yangzijiang, Singapore Technologies Engineering (ST Engineering), CapitaLand Investment (CLI), AEM, CapitaLand Integrated Commercial Trust (CICT), and Far East Hospitality Trust (FEHT).
“We pick companies that meet these criteria: Benefits from the inflationary environment, structural trend or in a recovery industry able to ride out current uncertainties, positive corporate developments, no direct negative impact from rising oil/commodity prices, no severe impact from supply chain disruption, and less than 20% revenue exposure to Europe,” they write in their report dated March 15.
The analysts have also kept their year-end Straits Times Index (STI) target of 3,550 points.
The target is pegged to slightly below a 13.2x average FY2023 P/E.
The way Yeo and Chua see it, the three Singapore banks, which are index heavyweights with a combined 42% within the STI will benefit from improving net interest margins (NIMs) in a rising rate environment.
“Singapore Telecommunications or SingTel (6.5% weight) is resilient to current uncertainties,” write the analysts. Singapore Airlines (SIA) and ComfortDelgro (CDG), which are negatively affected by the oil price, have small index weights of 2.3% and 0.6%, respectively, they add.
To date, companies under the brokerage’s coverage have seen a 1.8% downward revision to their FY2022 earnings.
“The anticipated delay of China’s reopening timeline till end-2022 affected Genting Singapore and China Aviation Oil (CAO). The industrial sector was impacted by lower Covid-19 relief and higher energy cost for CDG,” note the analysts. “This was offset by positive revisions for banks UOB and OCBC, on an accelerated rate hike cycle.”
Despite the cut in the brokerage's earnings estimates, earnings growth for the constituents under the STI remain strong at 10% for the FY2022, accelerating to 13% for the FY2023, say the analysts.
“Earnings recovered to 98% (ex-property) of the pre-pandemic level in end-2021 and could rise 9.5% above FY2019 results by year end,” they estimate.
To this end, Yeo and Chua expect strong earnings per share (EPS) and distribution per unit (DPU) growth for beneficiaries on the reopening. Counters mentioned include Genting Singapore, SATS, SIA Engineering, CDG, CDL Hospitality Trusts (CDLHT) and Ascott Residence Trust (ART).
“AEM leads the technology sector’s double-digit EPS growth over the next two years, but healthcare’s EPS contraction will come from Riverstone’s lower average selling price (ASP) assumption and delayed expansion plans,” add the analysts.
In their report, the analysts note that the recent 4QFY2021 results season had not factored in the rising prices in oil and commodities, as well as supply chain disruptions due to the Ukraine war.
“If uncertainties are prolonged, transport-related stocks such as SIA, CDG, Hutchison Port Holdings Trust (HPHT) and SBS Transit are vulnerable to oil prices that stay high for longer,” they write.
“Technology could see supply disruptions, e.g., a possible palladium impact on Frencken and Valuetronics. REITs with all-Europe exposure e.g., Cromwell European REIT and IREIT Global may also be affected. Resilient sectors are telcos, healthcare and consumer staples,” they add.
As at 3.57pm, the STI is trading 0.58 points lower or 0.02% down at 3,231.45 points.
Photo: Stock image
article_here
time of esg taggings 0.037491609109565616
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-sees-strong-support-dbs-and-ocbc-30-and-11-respectively-amid
UOB Kay Hian analyst Jonathan Koh has maintained his “overweight” recommendation on the Singapore banking sector as the banks’ exposures to Europe and Russia are minimal.
With the sanctions levelled against Russia, Koh writes that systemic risk to the sector is “elevated” but remains below the levels seen during past crises. “[This is because] Russia is not well integrated into the global financial system,” says Koh in his March 10 report.
“Financial linkages with other countries have been reduced since the European Union first imposed sanctions after Russia annexed Crimea and Sevastopol in 2014. Foreign central banks have not tapped on swap lines and repo facilities established by the Fed, indicating most countries didn’t experience dislocation in their financial systems,” he adds.
So far, the sanctions have had a “crippling impact” on Russia’s financial system with the rouble losing 43% of its value year-to-date (y-t-d) against the US dollar. This has led the Bank of Russia to hike its key interest rate from 9.5% to 20% to defend the rouble, notes Koh.
“The picture is vastly different outside of Russia. The FRA-OIS spread, a measure of dollar funding stress, inched higher by 27 basis points (bps) y-t-d to 34 bps. The deterioration is modest compared to previous crises, such as Europe’s Sovereign Debt Crisis (peaked at 59 bps in December 2011) and the Covid-19 pandemic (peaked at 79 bps in March 2020). Financial markets are under stress but remain functional,” he writes.
FRA-OIS, which represents the US forward rate agreement (FRA) and overnight index swap (OIS) market, is used as a metric of potential stress in banking. It takes the difference between the three-month London interbank offered rate (LIBOR) and the overnight index rate.
Buy into Singapore banks during share price weakness
With the current uncertainties, Koh has estimated a potential downside of 30%-42% in DBS’s share price, a downside of 1%-13% for OCBC, and a downside of 15%-22% for shares in UOB.
These figures were based on the numbers from the past three crises – Europe’s sovereign debt crisis, the crash in oil and gas, as well as the Covid-19 pandemic – as a gauge, says Koh.
“Direction for share prices of banks depends on the progress of peace talks to end the Russia-Ukraine war,” he writes.
“We see opportunities for bargain hunting in current weakness. Technically, we see strong support for DBS at $30 and for OCBC at $11,” he adds.
Koh has kept his “buy” call on DBS with a target price of $35.80.
In FY2022, Koh has pegged a total dividend of $1.44, which represents a dividend payout of 54.8%.
For the FY2023, he has cut his earnings estimates by 6%to $7.06 billion, with an expected total dividend of $1.48, or a payout of 54.7%. During the same year, Koh says he expects the bank’s net interest margin (NIM) to expand by 11 bps to 1.55%, down from his previous estimate of 1.61%.
“DBS provides [a] dividend yield of 4.5% for 2022 and 4.6% for 2023,” he writes.
Koh has also kept his “buy” recommendation on OCBC with a target price of $15.10.
In the FY2022, Koh expects the bank to distribute a total dividend of 56 cents, representing a payout of 50.6%.
In FY2023, Koh has cut his earnings estimates by 2% to $5.46 billion, with an expected total dividend of 60 cents, or a payout of 49.4%. In FY2023, Koh expects OCBC’s NIM to expand by 9 bps to 1.63% from 1.65% previously.
“OCBC provides [a] dividend yield of 4.9% for 2022 and 5.2% for 2023,” says Koh.
According to the analyst, catalysts to the sector on the whole, include the easing of Covid-19 restrictions and a recovery in the 2HFY2022 after the economy has weathered the Omicron variant wave.
Higher dividends from banks on the back of receding Covid-19 risks will also be catalysts to the sector, he adds.
Meanwhile, risks include the escalation of the Russia-Ukraine war to go beyond the invasion of Ukraine. The geopolitical tensions and trade conflicts between the US, China and Russia is also another downside risk to the sector.
On the impending rate hikes, Koh expects a series of four hikes with the Fed Funds Rate reaching 1.0% by end-2022, unchanged from his previous estimate. “We expect no hikes in 2023 (previous: four hikes),” he writes.
Shares in DBS and OCBC closed at $33.26 and $11.72 respectively, while shares in UOB closed at $30.12 on March 11.
Photo: File photo
article_here
time of esg taggings 0.03347628191113472
https://www.theedgesingapore.com/capital/brokers-calls/will-oil-prices-hit-us200-barrel-dbs-seems-think-so
As oil prices reach close to US$130 ($176.63) per barrel as at March 9, DBS Group Research analysts Suvro Sarkar, Ho Pei Hwa, Duladeth Bik and William Simadiputra are raising their base case forecasts for average Brent crude oil prices this year.
From an initial estimate of US$77 to US$82 per barrel, the DBS analysts now figure that Brent crude, the benchmark, will now hit an average of US$95 to US$100 for the whole of 2022, as hostilities in Ukraine drag on with repercussions that stood more severe than expected.
“Spikes even up to US$150 per barrel cannot be ruled out,” the analysts say.
“While oil is officially out of the sanction’s purview for now, many refiners have adopted self-imposed embargoes of Russian crude cargoes. Thus, at least between 1.5- 2.0 million barrels per day (mmbpd) of Russian oil could be out of the market for a few months. This is our base case scenario for now,” they add.
In a bear case scenario, where direct sanctions on Russian crude are imposed, as well as a lengthy conflict dragging on, the analysts have estimated an average Brent crude oil forecast of US$110 to US$115 per barrel in 2022, with peaks of around US$180 to US$200 per barrel.
The way they see it, a direct ban on Russian oil imports could impact three to four mmbpd of global oil supplies, which would be difficult to offset over any “feasible period of time” regardless of any surplus capacity from OPEC or a deal from Iran.
On March 9, US president Joe Biden announced an immediate ban on Russian oil and other energy imports.
"That means Russian oil will no longer be acceptable in US ports and the American people will deal another powerful blow to (Russian President Vladimir) Putin's war machine,” said Biden to reporters at the White House.
The way the analysts see it, the upstream and integrated oil names under their coverage are already delivering superior profits in FY2021 compared to their pre-Covid-19 levels.
Counters under their coverage include China National Offshore Oil Corp (CNOOC), Sinopec and PetroChina.
To them, profits are only going to increase on the back of the rise in oil prices.
Free cash flows have almost doubled from 2019 levels, as capex trends have remained subdued, they add.
“Despite the favourable macro backdrop and potential for superior cash flows, earnings, and dividends, stock prices are still not far from pre-Covid levels, especially CNOOC, and have not fairly reflected the rebound, in our opinion,” they write.
“We are factoring in conservative oil price assumptions in our forecasts, and at US$100/bbl average for 2022, we estimate there is a 30-70% upside potential for FY2022 earnings and dividends for our coverage,” they add.
Photo: Bloomberg
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time of esg taggings 0.05521265300922096
https://www.theedgesingapore.com/capital/brokers-calls/dbs-initiates-fully-valued-sarine-technologies-tp-45-cents
DBS Group Research has started Sarine Technologies at “fully valued” due to the headwinds in the diamond industry.
It has also pegged a target price of 45 cents, which is based on an average of the one-year forward P/E at 15.5x FY2022 earnings and a peer P/E of 15.0x FY2022 earnings.
Calling his recommendation “fully justified”, analyst Sachin Mittal says the normalisation of Sarine’s growth, as well as the time needed for downstream contributions to materialise, are also contributing factors to his call.
Despite Sarine’s exceptional growth in the FY2021, Mittal says the remarkable growth rates are unlikely to be sustained. To be sure, the rate of growth in 2021 was caused by several factors such as higher rough and polished spreads, a low base effect from 2020, lockdown-induced demand for luxury goods caused by border restrictions, and an urge for emotional gifting in tough times.
“In addition, the favourable rough and polished spreads experienced in late 2020 and early 2021 were due to the varied responses of the rough and polished markets to the pandemic,” writes the analyst in his March 11 report.
“We do not expect the same growth rates going forward… As governments worldwide cut down on stimulus payments, inflation rates soar, and travel resumes, it is likely that industry conditions in 2022-2024 will normalise and Sarine’s revenue and net income will also moderate. In fact, we have already observed some moderation in 2HFY2021,” he continues.
In addition, Mittal expects to see further weaknesses in Sarine’s revenue lasting at least till 1QFY2022 on the back of the faster growth in rough diamond prices, compared to that of polished diamonds.
“When rough prices rise faster than polished prices, the margins of midstream manufacturers are eroded. In light of weakened profits and suboptimal industry conditions, midstream manufacturers likely delay capital expenditures which, in turn, translates to lower capital equipment sales for Sarine,” writes Mittal.
“Examining Sarine’s quarterly revenue and the difference between the rough and polished indices, we see that relationship holding true. Notably, there appears to be a time lag of a few months, with the difference in the rough and polished indices being a leading indicator of Sarine’s revenue,” he adds.
Going into 2022, Mittal expects that the supply of rough diamonds will remain tight.
According to analysis from Rapaport, which does research and covers news pertaining to diamonds and diamond prices, the inventory for rough diamonds was said to have “depleted significantly” in 2021.
“This suggests that there will be fewer rough diamonds available in the market in 2022 if rough production does not increase significantly,” writes Mittal.
In his report, Mittal has estimated an FY2022 revenue of US$57.2 million ($77.7 million) as well as a net profit of US$7.78 million.
In comparison, Sarine reported total revenue of US$62.1 million for the FY2021 and net profit of US$16.3 million.
As at 12.28pm, shares in Sarine are trading flat at 51.5 cents, or an FY2022 P/B of 1.9x and dividend yield of 5.3%.
Photo: Stock image
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time of esg taggings 0.10098223201930523
https://www.theedgesingapore.com/capital/brokers-calls/dbs-analysts-see-s-reits-bottoming-out-once-fed-hikes-lift
Despite a 2% month-on-month collective increase within the Singapore REIT (S-REIT) sector, 15 of the 44 S-REITs are still trading within 5% of their 52-week lows.
However, DBS Group Research analysts Derek Tan, Dale Lai, Rachel Tan and Geraldine Wong say they see the sector bottoming out once the US Federal Reserve hikes lift off.
“Even if we assume 10-year yields will rise to 2.0% in the longer term, we are still looking at an attractive yield spread of 3.8% (in line with historical mean),” they write.
In their March 4 report, the analysts say they remain buyers with a preference for S-REITs that are beneficiaries of the re-opening theme, as well as selected high-growth industrial names, taking advantage of the current share price weakness.
As such, they have named Frasers Centrepoint Trust (FCT), CapitaLand Integrated Commercial Trust (CICT), Suntec REIT, CapitaLand China Trust (CLCT) and Ascott Residence Trust (ART) as their re-opening plays. They have also identified Frasers Logistics & Commercial Trust (FLCT) and Mapletree Industrial Trust (MINT) as their industrial picks.
As the US Federal Reserve seeks to raise its rates when it meets on March 15 to 16, the analysts deem the S-REITs as being “well-buffered” against the hikes.
As at the date of the report, S-REITs have an interest coverage ratio (ICR) of 4.9x, ranging from 3.2x to 21.0x, comfortably above the minimum 2.5x imposed by the Monetary Authority of Singapore (MAS).
“This implies that S-REITs have the flexibility to gear up towards the 50% level if they choose to, although we sense that most managers are keen to keep gearing closer to the 38%-39% level, providing headroom for opportunistic acquisitions,” says the team of analysts.
“We have stressed tested our estimates and a 1.0% hike in interest rates will see ICR ratios dip to 4.3x (ranging between 2.5x to 18.0x), implying that S-REITs are well buffered against interest rates hikes,” they add.
Asset valuations for S-REITs may also see upside, as capital rate spreads are not excessively tight, ahead of expectations say the analysts.
“We note that capital rates for various real estate classes have compressed by up to 100 basis points over the past decade. The tightest compression was seen in the industrial (logistics, business parks) and suburban retail sectors given their proven resilience throughout the Covid-19 crisis supported by increasing capital allocations from investors into these emerging asset classes,” they write.
Despite the low capital rates, the analysts note that capital rate spreads are still within historical range and not excessively compressed.
“As such, with rental growth picking up in 2022-2023, asset valuations should remain sticky or trend higher as portfolio net operating income (NOI) improves,” they add.
To this end, the analysts see the S-REIT sector’s “relatively stable” share price as “positive”.
“This highlights that investors will return to the sector at the right price,” write the analysts. “While we have seen outflows owing to tactical repositioning within and out of S-REITs in recent times, the uncertainty in the market has resulted in investors taking a reverse strategy.”
Photo: Albert Chua/The Edge Singapore
article_here
time of esg taggings 0.031080105109140277
https://www.theedgesingapore.com/capital/brokers-calls/dbs-upgrades-netlink-buy-risk-free-interest-rates-rise
DBS Group Research’s Sachin Mittal has upgraded his call on Netlink NBN Trust to “buy” with a higher target price of $1.05, up from the previous figure of $1.02.
According to Mittal in his March 9 note, the stock currently has “an attractive 5.4% yield for its low-risk profile.”
“With Singapore’s risk-free rate rising to 1.9%, NetLink’s regulatory rate is likely to be stable,” writes the analyst.
“When NetLink was listed four years ago, [its] risk-free rate was 2.1%. We project a risk-free rate of 2.1%/2.2% by the end of FY2022/FY2023,” he adds.
A higher risk-free rate means that there is a lower risk of a drop in the regulatory rate for the next review period over January 2023 to December 2027, notes the analyst.
He is referring to the outcome of Netlink’s negotiations with the Infocomm Media Development Authority (IMDA) on the interconnection offer (ICO) pricing for the next review period (2023-2027).
The ICO pricing governs the prices set for some of Netlink’s services, such as those related to residential connections, non-residential connections, NBAP and segment fibre connections, as well as ducts and manholes service revenue.
Mittal thinks that NetLink’s distribution yield spread is likely to narrow to 300 basis points (bps) to reflect its lower risk profile.
At the current 10-year bond yield of about 1.9%, NetLink is trading at a 350 bps spread vs. its own historical average of 310 bps.
As such, he thinks that it has “big room” to gear up to meet any unforeseen circumstances.
Furthermore, high inflation should not eat into distributions, as inflationary pressures on capex and opex are taken into consideration when regulatory return is determined under the Regulated Asset Base (RAB) model.
However, he does acknowledge that he is “conservative” in his valuation of Netlink, adding, “we expect annual capex to hover between $55 million to $60 million in the long term and any potential rise in capex (due to inflation) or acquisitions could be a positive surprise, not factored into our valuation.”
Despite the upgrade, Mittal warns that investors should look out for a sharp rise in risk-free rates, which could prove as a downside risk to the counter. He says if the risk-free rate rises to 2.6-2.7% vs his prediction of 2.1%, then Netlink might trade at a 300-310bps spread at a 5.7% yield, leading to a “bear case target price” of 90 cents.
As at 3.30pm, shares of Netlink were trading at 97 cents, with a price to book ratio of 1.4 and dividend yield of 5.3%.
article_here
time of esg taggings 0.029594870982691646
https://www.theedgesingapore.com/capital/brokers-calls/strong-income-visibility-following-uk-agreements-key-positive-elite-commercial
Analysts from CGS-CIMB Research and DBS Group Research are keeping “add” and “buy” on Elite Commercial REIT after the REIT announced, on February 28, that it had entered into separate agreements with The Secretary of State for Levelling Up, Housing and Communities of the United Kingdom, to re-gear certain leases of its properties occupied by the Department for Work and Pensions (DWP).
In addition, ECR has also agreed to collaborate on certain sustainability-linked investments for properties occupied by DWP.
The analysts have also kept their target prices unchanged at 76 British pence and 80 British pence for CGS-CIMB and DBS respectively.
The re-gearing of the lease will extend income visibility on the REIT’s portfolio, with the strong visibility being a “key positive” for the REIT, says DBS’s Dale Lai in his March 3 report.
“As the lease break option in 2023 was removed for almost half of the portfolio, 79% of the portfolio now has straight leases through to 2028 without lease break options,” he notes.
Further to that, Lai believes that the REIT will see a likely lift in valuations with the removal of the lease break options for 100 out of the 117 properties leased to the DWP.
The remaining 17 properties have lease break options that are undecided by the DWP for now. The leases will continue to run till 2028 unless notice is served by the end of March.
“The weighted average lease to break (WALB) is now at its longest ever at five years, which will be a critical factor for the stock to re-rate,” says Lai.
“Historically P/NAV was at 1.2x when WALB was at its longest at 4.5 years, and the stock is currently trading at just 1x P/NAV with potential revaluation gains ahead,” he adds.
“With the [UK] government’s aim to achieve sustainability goals such as net-zero carbon emissions by 2050, this sustainability collaboration by Elite Commercial REIT and DWP is timely. Achieving higher Energy Performance Certificate (EPC) ratings for the properties in the portfolio can provide a greater incentive for DWP to stay as a tenant beyond 2028, future-proofing the REIT,” he continues.
“The works could include repair, replacement or upgrading of lighting systems, heating and cooling systems, insulation and solar panels, and other initiatives. This could improve the sustainability and energy efficiency credentials of the properties occupied by DWP within the portfolio,” echo CGS-CIMB’s Lock Mun Yee and Eing Kar Mei.
In their report on March 1, Lock and Eing say they also see the impact on the REIT’s portfolio valuation as positive.
The move could also lower its gearing, which stood at 42.4% as at end-December, they note.
“At current price, Elite Commercial REIT offers an attractive FY2022 dividend yield of 7.7%,” they write.
“We like [the REIT’s] stable income portfolio, with inbuilt growth through its inflation-linked rental structure. Potential re-rating catalysts could come from rental uplifts for the majority of its portfolio in FY2023, while downside risks include tenant concentration exposure to the DWP,” they add.
Units in Elite Commercial REIT closed at 63.2 British pence on March 9.
Photo: Elite Commercial REIT
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time of esg taggings 0.03101670416072011
https://www.theedgesingapore.com/capital/brokers-calls/property-developers-remain-hungry-land-dbs
The tenders of two government land sales (GLS) sites closed on the evening of March 8 and DBS Group Research noticed that it continues to see active participation among property developers as expected.
The site at Dairy Farm Walk drew seven bids with Sim Lian as the top bidder, while an executive condominium (EC) residential site in Bukit Batok West Avenue 8 attracted nine bids, with Qingjian-Santarli joint venture (QS JV) taking the top spot.
In a March 9 report, lead analyst Derek Tan says, “Both sites were close fights in our view, with a thin margin between the highest bids and the second-highest bids as developers remain hungry to landbank.”
For the Dairy Farm Site, Sim Lian was the top bidder for the 99-year leasehold site with a bid of $347 million or $980 psf per plot ratio. This was just about 1% higher than the second-highest bidder from the United Engineers and Soilbuild Group consortium and about 9% higher than the average of the rest of the bids.
This time around, bids were fairly close, averaging at $900 psf, implying that developers are keen to bid for a site with a seemingly low “overall quantum” and “per square foot price” when compared to other potential launch prices (north of $2,000 psf) from recent GLS sites.
“We note that Sim Lian has been actively looking to landbank after its key project Treasure at Tampines (enbloc) was fully sold, but the company has not been successful till this site. We estimate that breakeven for Sim Lian is in the range of $1,650psf to $1,700 psf, implying launch prices closer to north of $1,800 psf to $1,850 psf, which is a new high,” says Tan.
Sim Lian can take heed from a nearby project, 460-unit development (first storey has commercial amenities) named Dairy Farm Residences, which obtained temporary occupation permit (TOP) in 2025. It is around 90% sold with pricing reaching a high of $1,700 psf. Launched in 2019, the GLS site was awarded to United Engineers at a bid price of $830 psf.
As for the Bukit Batok site, the QS JV is “back to its familiar haunt”, as the JV topped the bid with a record $632 psf per plot ratio. “The optimism from the QS JV bid was probably bolstered by the positive momentum seen at Qingjian’s earlier project, Le Quest (launched in 2017) nearby,” says Tan, while noting that Qingjian probably had confidence of the demand for condominium projects within the Bukit Batok – Bukit Gombak precinct, given government’s long-term push to develop the nearby Tengah estate.
“We note that this EC site will sit next to an upcoming EC site which will be called for tenders in June 2022, implying that, if awarded, QS JV will likely set the benchmark prices and will be able to launch ahead of the project next door,” adds Tan.
The JS JV’s bid is some 10% higher than the last EC site awarded to CDL-MCL at Tengah Garden Walk EC in July 2021, which was a new benchmark then at $603 psf per plot ratio.
With that, Tan estimates the breakeven for this site to be close to $1,180 to $1,220 psf, implying that launch prices should touch $1,350 onwards.
article_here
time of esg taggings 0.03650665585882962
https://www.theedgesingapore.com/news/banking-finance/dbs-ceo-receives-big-pay-hike-1358-mil-fy2021-following-record-year
DBS Group Holdings CEO Piyush Gupta has been given a big pay hike of some 48% for 2021 following a cut in the preceding year .
According to the company’s annual report published earlier this morning, Gupta received a total package of $13.58 million, the bulk of which is from shares worth more than $7.1 million.
The pay raise comes on the back of DBS’s “best year ever” in 2021 in terms of its financial performance, as well as a range of key scorecard goals, according to the report.
“With Covid-19 in the second year, global interest rates remained at rock-bottom levels. China idiosyncratic risks also increased, following moves by the government to temper exuberance in the property market. Against this backdrop, DBS’ sterling financial performance underlined the strength of our broad-based franchise and the success of multi-year transformation efforts,” reads the report.
For FY2021 ended December, the bank reported record earnings of $6.8 billion, up 44% y-o-y. During the period, the bank saw a return on equity of 12.5%, which is the second-highest in over a decade.
In contrast, for FY2020, Gupta suffered a pay cut of 24% to $9.18 million, no thanks to the pandemic.
In the report, the CEO of DBS explained the rationale behind DBS’s recent acquisitions of Lakshmi Vilas Bank, Shenzhen Rural Commercial Bank (SZRCB) and Citi Consumer Taiwan, stating that the bank needs to be “more deeply embedded” in one or more of its four markets outside of Singapore and Hong Kong.
The markets include China, India, Indonesia and Taiwan.
See also: India's central bank matchmakes troubled Lakshmi Vilas Bank with DBS, dowry of $463 million ready , DBS to acquire 13% stake in Shenzhen Rural Commercial Bank for RMB5.29 bil and DBS to pay $956 mil in premium to acquire Citi's Taiwan consumer business
“The three transactions we did over the last 18 months… will position DBS well for growth as we look out into the next decade,” declared Gupta in the report.
According to him, India remains a very attractive banking market, especially in the small- and medium-sized enterprises (SME) and retail segments.
With the Chinese market, despite the recent policy adjustments in the country, Gupta says the acquisition of the stake in SZRCB will allow DBS to accelerate its greater bay area (GBA) strategy via Shenzhen, which is the bay area’s fastest-growing city.
“We also see mutually-beneficial collaboration between SZRCB and our franchises in Hong Kong and China. While the stake is a minority one, it is the largest held by a single shareholder. We may have the opportunity to increase our shareholding in future as well,” says Gupta.
Finally, DBS’s acquisition of Citi Consumer Taiwan will accelerate DBS Taiwan’s growth by at least 10 years, making the group’s Taiwan arm the latest foreign bank by assets, reveals Gupta.
“This will provide synergies from economies of scale, including reduction of global and regional overheads. Citi Consumer Taiwan’s strong low-cost deposit base will also support the expansion of DBS Taiwan’s institutional and SME banking business,” he adds.
All three transactions will add some $1.2 billion to $1.3 billion to DBS’s revenue base and an added $0.5 billion to the bank’s bottom line, says Gupta.
In the same report, Gupta adds that cryptocurrencies will "continue to grow as a meaningful store of value, much like gold is today".
However, privately-backed coins like Bitcoin are unlikely to take over the role of state-backed money.
"While the technology used to issue these coins (blockchain) is indeed very powerful, and does form a basis for creating immutability and transparency, the truth is that it will still be a while before the common man will universally accept this when it comes to regular monetary transactions," he says.
"I also expect that regulators (and politicians) will be loath to give up control of monetary policy and economic management tools, and will therefore be very circumspect about letting private money grow," he adds.
Since the start of 2021, DBS’s share price has gained around 16%.
article_here
time of esg taggings 0.033024616073817015
https://www.theedgesingapore.com/capital/brokers-calls/turnaround-sight-sembmarine-analysts
The worst is probably over for Sembcorp Marine (SembMarine) as it reported deeper losses for the FY2021 ended December , analysts say.
On Feb 25, SembMarine reported a deeper net loss of $523.3 million for the 2HFY2021, 34.1% higher than the net loss of $390.4 million in the 2HFY2020.
The half-year results brought FY2021’s loss wider to $1.17 billion from FY2020’s loss of $582.5 million.
CGS-CIMB Research analysts Lim Siew Khee and Isabella Tan have maintained their “hold” recommendation with an unchanged target price of 9 cents.
The unchanged target price pegs SembMarine at P/BV of 0.8x for the calendar year (CY) 2022. The valuation represents a 20% discount to its three-year historical average of 1x.
To them, SembMarine’s net loss for the 2HFY2021 stood below their forecast of a $625-million loss.
In their Feb 26 report, Lim and Tan say that this will probably be the last round of major provisions as the gradual reopening of borders means an easing of labour shortage in Singapore. This will, in turn, reduce the cost of bringing in new labour.
Therefore, management does not expect further significant provisions as the current manpower level is sufficient to complete existing projects, say the analysts.
The easing of labour costs may be a key reason behind SembMarine’s guidance of a “significantly better financial performance for FY2022,” write the analysts.
In the FY2022, SembMarine’s prospects look to be shaping up. Year-to-date, the company has delivered three out of 12 projects scheduled for 2022. It is also on track to conclude negotiations on project completion terms with its key customers and is likely to see stronger revenue contribution in 1HFY2022, note the analysts.
“Management sounded positive about some contract wins by 1HFY2022 with contract size on average ranging from $500 million to $1 billion. Some of the contracts underway include the EPC contract for US$2 billion ($2.72 billion) Dorado FPSO and Antarctic support vessel for the Brazilian Navy,” they add. “Rising oil prices [as at Feb 26] could provide impetus for deferred expenditure by oil companies.”
Looking ahead, the analysts see scope “for narrower discount on consistent order win momentum, earnings recovery or clear strategy from enlarged entity with Keppel O&M. The indicative order book for both yards could reach $6.4 billion based on end-2021 reported figures”.
DBS Group Research analyst Ho Pei Hwa has also kept “hold” on SembMarine with a slightly higher target price of 9 cents from 8 cents previously.
The marginal lift in her target price is due to the smaller-than-expected losses in the FY2021, still pegged to 0.7x P/BV or 1.5 standard deviation below its mean valuation since 2014, says Ho in her Feb 28 report.
“We could raise SembMarine’s target valuation multiple on more signs of a firm recovery in orders, operational improvement, and a successful yard merger with synergy creation,” she writes.
As at end-2021, SembMarine reported a net orderbook of $1.1 billion, of which Ho estimates that it secured some $800 million in new orders in 2021.
While the figure is an improvement from the zero orders in 2020, Ho notes that the figure “remains a far cry from [SembMarine’s] breakeven revenue of $2 billion”.
As such, order wins are critical for the company.
To Ho, the pick-up in new orders in the FY2021 are “positive”.
Ho adds that “rising oil prices bode well for capex increase by oil majors, leading to potentially stronger order flows for production facilities. Growing offshore renewable orders is a strategic move for long-term growth”.
The next key event for SembMarine, says Ho, is the proposed merger between the company and Keppel O&M, which is pending details since the signing of a non-binding memorandum of understanding (MOU) in June 2021.
The way Ho sees it, the merger is “a long-term positive for SembMarine, creating revenue and cost synergies. However, in the near term, some uncertainties hover around the valuation of yards and potential integration hiccups.”
That said, key risks include sustained low oil prices, which would affect capex, and new building activities and execution risks in new product types.
UOB Kay Hian analyst Adrian Loh is the only one to keep “buy” on SembMarine. His target price at 11 cents is also the highest amongst the three houses.
The unchanged target price is “based on a target multiple of 0.88x, pegged to our 2022 estimated book value per share of 13 cents. Our target P/B multiple is a 20% discount to the company’s past-five-year average P/B of 1.1x,” writes Loh in his Feb 28 report.
“Note that we had previously applied a 30% discount but we now view a lower discount as more reasonable given the expected turnaround in the company’s fortunes. With its $1.5 billion rights issue completed, and Temasek’s mandatory general offer at 8 cents per share having lapsed in early-November 2021, we believe that much of the corporate-level risk has dissipated,” he adds.
In the same report, Loh has also upped his net profit numbers for FY2022 and FY2023 as he now expects SembMarine to see breakeven due to better guidance from the company.
Unlike the rest of the analysts, however, SembMarine’s results for the FY2021 stood larger than Loh’s expectations. That said, the company’s FY2021 revenue stood “slightly ahead” of Loh’s estimates. Loh also noted that the better sequential performance in the 2HFY2021 was also a positive for SembMarine.
To him, the key highlights from the company’s results were: the promise that 2022 would be “significantly better” than 2021, as well as the solving of the labour issues from the 4QFY2021.
Following the $1.5 billion raised, Loh notes that SembMarine is now in an improved financial position. The proceeds “can be used more ably to execute and complete the projects as well as for working capital needs for new orders and projects,” he says.
On the higher carbon taxes announced during Budget 2022, Loh says that the increase in taxes are unlikely to impact SembMarine in a major way.
“For its offshore marine customers, there may be a significant increase in taxes and thus project economics need to increase to cater for this. On the other hand, we note that renewables projects which have no carbon taxes then become more attractive to SembMarine’s customers,” writes Loh.
To him, catalysts to SembMarine’s share price includes new orders for rigs, offshore renewable installations or fabrication works as well as repairs and upgrades work for cruise ships and other commercial vessels. A merger or joint ventures (JVs) with other shipyards may also contribute to an increase in SembMarine’s share price.
Shares in SembMarine closed 0.2 cent lower or 2.08% down at 9.4 cents on March 8.
Photo: Bloomberg
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time of esg taggings 0.0701999980956316
https://www.theedgesingapore.com/capital/brokers-calls/analysts-capitaland-investment-after-strong-fy2021-results
Analysts from DBS Group Research, UOB Kay Hian and PhillipCapital say they like CapitaLand Investment (CLI) after the real estate investment manager (REIM)’s PATMI of $1.35 billion for the FY2021 ended December surpassed expectations.
DBS analysts Derek Tan and Rachel Tan have kept “buy” on the counter with an unchanged target price of $4, the lowest amongst the three brokerages.
In their report dated Feb 28, the analysts admit that their estimates are more conservative compared to their peers. However, the analysts see CLI as an “asset and capital efficient” company with scalable fee-related earnings (FRE) and fund assets under management (AUM) platforms for growth.
“CLI’s private funds and REITs complement each other in terms of acquisition strategy. With diverse real estate strategies ranging from opportunistic, value-add to core investments, we see CLI leveraging on opportunities during market upcycles and downcycles. Its REITs and private funds can be active across all real estate cycles,” write the analysts.
The recovery of CLI’s lodging business, Ascott Limited, is also underway, note the analysts.
During the year, Ascott Limited achieved a new milestone with a 10% rise in operational units to 77,000 units, with 56,000 units in the pipeline.
“With 15,000 units secured in 2021 and a pipeline of over 8,200 units, Ascott is on track to hit its target of 160,000 units by 2023,” write the analysts.
In FY2021, Ascott’s portfolio revenue per average room (RevPAR) recovered +19% y-o-y to $78/night with most markets reporting an improvement y-o-y as border restrictions relaxed, they add, noting that the outlook remains robust on the back of the easing of border restrictions.
To the analysts, catalysts to CLI’s share price are: the launch of new fund products and REIT acquisitions with an aim to grow funds under management (FUM) to $100 billion by 2024; as well as a rebound in operational performance for its lodging business.
“These are expected to drive [a] three-year net profit compound annual growth rate (CAGR) by 12% during FY2021-FY2024,” they write.
UOB Kay Hian analyst Adrian Loh has also kept “buy” on CLI with a higher target price of $4.13 from $4.02 previously.
He has also upgraded his earnings estimates for the FY2022 and FY2023 by 5% and 8% respectively to account for a slightly faster recovery in CLI’s lodging segment. The higher earnings estimates will also account for slightly better margins in its fund management business, says Loh in his Feb 28 report.
“We value CLI at $4.13/share (previously $4.02) using a sum of the parts (SOTP) methodology which comprises of: its fee-income platform where CLI earns fees from its investment management, property management and lodging management platforms; and its investment properties which CLI accounts for on its own balance sheet, as well as its various stakes in its listed REITs and its various stakes in its unlisted funds,” writes the UOB Kay Hian analyst.
Following CLI’s strong set of numbers in its maiden results, Loh expects the REIM to “continue to witness strong growth in its funds under management as well as fee income-related businesses”.
“Importantly, we expect lodging to drive earnings growth in the near term,” he adds.
Finally, PhillipCapital analyst Natalie Ong has maintained her “accumulate” recommendation on CLI. In her report on March 8, Ong has also upgraded her target price estimate to $4.05 from $4 previously.
The higher target price comes as Ong lifts her investment management PATMI estimates for the FY2022 to factor in growth in CLI’s FUM as well as higher EBITDA in its lodging segment.
“At current growth rates, CLI is on track to hitting its 2023 lodging target of 160,000 keys under management and [its] $100 billion 2024 FUM target. This will increase the proportion of fee-related earnings for CLI, which currently account for 40% of operating PATMI,” writes Ong.
She adds that as the REIM pushes to grow its private equity (PE) FUM, new funds will “adopt a traditional PE fee structure which includes an ongoing management fee based on committed capital as well as carry fees which are tied to the performance of the fund manager”.
“As CLI’s private fund business is less established compared to its track record as a manager of listed funds, CLI is prepared to take up to a 20% stake in newly incepted private funds as a show of confidence and alignment of interest with its third-party equity providers,” notes Ong.
Shares in CLI closed 1 cent higher or 0.27% up at $3.67 on March 8.
Photo: CLI
article_here
time of esg taggings 0.07172419899143279
https://www.theedgesingapore.com/capital/brokers-calls/bhg-retail-reit-expected-see-stable-growth-moving-forward
Analysts from PhillipCapital and DBS Group Research believe that the worst is over for BHG Retail REIT. The REIT is also expected to see growth from here on.
In its latest FY2021 ended December 2021 results, BHG Retail REIT reported an 11.3% y-o-y increase in distribution per unit (DPU) to 2.17 cents. This came on the back of a 16.6% y-o-y increase in gross revenue to $70.6 million and a 14.9% growth in net property income (NPI) to $70.6 million.
Following this, DBS Group Research analysts Woon Bing Yong and Derek Tan are keeping their “hold” recommendation on the REIT with a target price of 57 cents.
“While FY2020 was undoubtedly the bottom of BHG REIT’s three-year declining DPU trend, its recovery is expected to be slower, as FY2021 DPU numbers did not bounce back as quickly as anticipated,” say Woon and Tan. “Still, we maintain our FY2022 estimates, as Hefei Mengchenglu is set to make a bigger contribution this year following disruptions from its asset enhancement initiatives (AEI) in FY2021.”
Additionally, the analysts note that the REIT has exposure to three properties located in Hefei and Chengdu, where urban disposable income grew at five-year compound annual growth rates (CAGRs) of 8.5% and 7.9%, respectively, outpacing Beijing’s 7.2%. “Correspondingly, retail spending in Hefei and Chengdu grew at faster five-year CAGRs of 16.6% and 7.3%, versus 5.7% in Beijing,” say Woon and Tan. “With the ongoing tenancy remix, we believe BHG REIT’s assets in Hefei and Chengdu have the potential to deliver strong organic growth in the medium term.”
However, Woon and Tan note that their estimates for the FY2022 are on the conservative side, as they are the only brokerage covering the counter.
Meanwhile, BHG Retail REIT has also caught the attention of PhillipCapital.
In an unrated report dated Mar 2, analyst Vivian Ye observes how the recovery in its gross revenue and property income has been underpinned by healthy occupancy. “The main contributor to the increase was Beijing Wanliu mall, with gross revenue increasing 19% to $20 million,” says Ye. “No rental rebates were given in 2HFY2021. Rents for new and renewed leases continued to recover.”
However, Ye also pointed out higher property operating expenses with BHG Retail REIT. “Property operating expenses increased 17.3% y-o-y, due to the gradual resumption of malls’ normal operations and absence of Covid-19 subsidies from the government,” Ye says.
On a whole, BHG Retail REIT’s portfolio has proved its resilience, says the analyst, with continued recovery in portfolio occupancy and higher gross revenue, despite the Covid-19 Omicron wave in 2HFY2021. “Gearing remained healthy at 34.1%, providing comfortable debt headroom to pursue M&A growth opportunities,” she adds.
As at 3.20pm, share price in BHG Retail REIT is trading flat at 54 cents.
Photo: BHG Retail REIT
article_here
time of esg taggings 0.029861742863431573
https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-and-dbs-remain-positive-over-hongkong-land
Analysts have largely kept their calls and target prices on Hongkong Land, with a common view that the developer’s on-going share buyback will be a support for its share price despite mixed signals of recovery in its core businesses.
Thus far, notes DBS Group Research’s Jeff Yau, Hongkong Land has spent some US$272 million to buy back 50.5 million shares as of end of last month.
Last September Hongkong Land had announced a US$500 million buy back programme by end of 2022.
“Continued share buybacks should support the share price,” writes Yau in his March 4 note, where he reiterated his “buy” call, but with slightly trimmed target price of US$6.61 from US$6.64 previously.
He notes that Hongkong Land is now trading at a discount of 53% to his appraised current net asset value. Prior to the buyback programme, the company was traded below a third of that level.
However, Hongkong Land’s retail rental income this current FY2022 will continue to be affected by the pandemic.
“On the other hand, office market downturn in Central showed signs of bottoming out prior to this recent Covid outbreak,” writes Yau, referring to the crown jewels of the company: a clutch of prime office and retail properties in Hong Kong.
He is optimistic that Hongkong Land’s Central office portfolio is set to benefit from “flight-to-quality” demand, although he warns that further deterioration in leasing demand for both Hong Kong and Singapore will be a drag on the company’s earnings.
CGS-CIMB, meanwhile, has observed that Hongkong Land has sped up its landbanking activities in China while other mainland Chinese developers remain restrained.
In FY2021 alone, Hongkong Land has acquired nine projects for development in China, write analysts Raymond Cheng, Will Chu and Steven Mak in their March 5 report.
Including West Bund project in Shanghai, it had 12 investment properties projects in China to be completed between FY2023 and FY2026.
These 12 projects have a planned gross floor area of 1.1 million sqm and when completed will help Hongkong Land build a stronger recurring income base, they note.
Meanwhile, due to a slower recovery of office rents in Hong Kong and Singapore, the CGS-CIMB analysts have trimmed their target price to US$6.1 from US$6.30, while keeping their “add” call.
Photo: Red John / Unsplash
article_here
time of esg taggings 0.029129063012078404
https://www.theedgesingapore.com/news/environmental-social-and-governance/dbs-committee-provide-greater-governance-and-oversight-bank
In a bid to build on its sustainability agenda and net-zero commitment, DBS today announced that it had recently established a Board Sustainability Committee (BSC) – the first by a Singapore bank.
Recently, DBS has been an active champion of the sustainability agenda, with claims that it was the first Singapore bank to commit to zero thermal coal exposure by 2039.
DBS has committed a total of $20.5 billion in sustainable financing transactions in 2021 as well, taking the bank’s cumulative efforts to $39.4 billion to date – achieving almost 80% of the bank’s $50 billion sustainability financing target by 2024.
Prior to the formation of the BSC, DBS’ Board Exco had oversight of sustainability matters. As DBS became the first Singapore bank to join the United Nations-convened Net-Zero Banking Alliance in 2021, and committing to be net-zero by 2050 or sooner, having a BSC would allow for greater focus on the sustainability agenda which is one of the bank’s key strategic imperatives.
The BSC is chaired by DBS CEO Piyush Gupta and its members comprise current DBS board members Chng Kai Fong, Judy Lee and Tham Sai Choy.
Additionally, the BSC will provide added governance and oversight of material environmental, social and governance (ESG) matters, including climate-related matters; sustainability disclosures; stakeholder engagement; and governance on sustainability matters amongst others.
“DBS takes our role in building a sustainable future very seriously. That is why our commitments to driving the transition to a net-zero world were made only after we had some line of sight towards a viable course of action that is constructive and impactful,” says Piyush Gupta, CEO of DBS.
“This included first establishing a clear handle on our financed emissions, mapping out viable transition pathways for different industry sectors, and developing a taxonomy that guides conversations with customers in their transition,” he adds.
article_here
time of esg taggings 0.026170935947448015
https://www.theedgesingapore.com/capital/brokers-calls/dbs-downgrades-ghy-culture-media-holding-hold-challenging-outlook-and-steep
DBS Group Research analyst Ling Lee Keng has downgraded her recommendation on G.H.Y Culture & Media Holding as its results for the FY2021 stood “drastically below expectations” on the back of Covid-19 induced delays.
For the FY2021 ended December , G.H.Y. Culture & Media Holding reported earnings of $3.9 million, down 90% from FY2020’s earnings of $38.1 million. The lower earnings were due to lower revenue contribution from the TV programme and film production business segment, said the company in their results statement on March 1.
The lower earnings were also due to the absence of revenue contribution from the concert production business segment.
article_here
time of esg taggings 0.02669830690138042
https://www.theedgesingapore.com/news/brokers-calls/sell-share-price-unwarranted-citi-keeps-buy-grab-while-dbs-maintains-hold-call
Viewing Grab’s over 30% sell-off in share price following its 4Q21 results as “unwarranted”, analysts at Citi Research have maintained their “buy” call for Grab with a lower target price of US$8.20 from US$9 previously.
The broad market weakness amid geopolitical instability might have prompted some investors to cut losses on their position, the analysts note in a March 4 report.
“With US$6.8 billion in net cash and its effective super app strategy, we view the sell-off as an enhanced buying opportunity and remain confident of Grab’s ability to execute and facilitate on-demand services,” the analysts add.
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https://www.theedgesingapore.com/capital/investing-ideas/sia-reports-first-quarterly-profit-pandemic-flight-full-recovery-still
Thanks to cargo traffic, Singapore Airlines (SIA) has reported its first quarterly report since the pandemic struck. While analysts are cheered by the numbers, they also caution that full recovery takes time, as risks of new variants and higher fuel prices loom.
CGS-CIMB analyst Raymond Yap was expecting the flag carrier to report a loss of $300 million, instead of core earnings of $28 million for 3QFY2022 ended December 2021.
Yap, who has an “add” call and a $5.88 target price on the stock from $5.86 previously, notes that SIA’s cargo arm outperformed expectations on the back of stronger demand, higher yields and lower unit costs on a y-o-y and q-o-q basis.
“The cargo strength was on account of the year-end spike in airfreight demand, as well as the container shipping congestion which forced cargo owners to move goods via airfreight instead,” writes Yap in his Feb 25 note.
SIA’s cargo flown revenue increased by 81.6% y-o-y to a record $1.35 billion, surpassing the $1 billion mark for the first time.
On Feb 25, SIA reported earnings of $85 million for the 3QFY2022 ended December 2021, reversing from the loss of $142 million in the same period the year before.
Despite this, the airline still posted a loss of $752 million for the 9MFY2022, although that is a 79.2% y-o-y improvement from the $3.61 billion loss in 9MFY2021. Revenue for 3QFY2022 more than doubled y-o-y to $2.3 billion, while revenue for 9MFY2022 was up 90.4% y-o-y to $5.14 billion.
Besides cargo, passenger revenue improved too, due to the introduction of so-called vaccinated travel lanes (VTL) from September 2021 onwards.
Despite higher than pre-pandemic fares, these flights were “enthusiastically embraced”. The airline’s passenger flown revenue increased 355.2% y-o-y to $833 million, on the back of a 556.8% growth in traffic, leading to a passenger load factor of 33.2% - up 18.9 percentage points.
Despite things looking up, Yap warns SIA might report a loss again for its 4QFY2022 ending March, with the year-end travel season over, along with softer cargo demand.
In addition, Singapore also suspended new ticket sales for VTL flights from Dec 23, 2021, to Jan 20, and halved the VTL daily quota from Jan 21 onwards, although it will fully restore the quota between Feb 17 and March 4.
On the cost side, spot jet fuel prices have surged to US$111 ($150.70) per barrel, from just US$85 per barrel three months back, with SIA hedged for just 30% of its needs in the current quarter.
Yap cautions that higher fuel prices will be a key downside risk given how the airline has hedged just 40% of what it plans to use for FY2023. Nevertheless, he says that “prospects for FY2023 continue to brighten”, says Yap, citing how Singapore has committed to restoring the full VTL quota from Mar 4 onwards.
The country has already simplified Covid-19 testing protocols to reduce the cost of travel into Singapore, and will eventually expand the VTL scheme to all vaccinated travellers from around the world by the middle of this year once the Omicron wave subsides.
Chu Peng of OCBC Investment Research has turned somewhat bullish too. While she kept her “hold” call, Chu has given SIA a higher fair value of $5.23, from $5.08 previously. Chu expects the airline’s recovery to gain pace, although that is on the assumption that no new variants will pop up.
Similar to CGS-CIMB’s Yap, for 4QFY2022, she sees SIA reporting a “softer q-o-q” due to seasonality impact and temporary suspension of VTL and reduction of quota in January and February 2022.
DBS Group Research, meanwhile, rates SIA a “hold” but with a target price of just $4.90. Analysts Paul Yong and Jason Sum point out that a “cashed up” SIA is in a strong position to wait patiently for a recovery, citing the couple of fund-raising undertaken by controlling shareholder Temasek.
However, they worry over how the timeline for a sustained reopening of international borders to air travel continues to be pushed back with the emergence of new Covid-19 variants.
They also point out that the mandatory convertible bonds, with some $9.7 billion in issue, could be highly dilutive whether eventually redeemed or converted.
Yong and Sum also believe that SIA’s long-term recovery has largely priced in already, given how the share price is trading around 1.2 times its book value, which is not too far off its 10-year mean.
SIA shares closed March 2 at $5.07, down 0.78% for the day but up 1.2% year to date.
Photo: SIA
article_here
time of esg taggings 0.06634508608840406
https://www.theedgesingapore.com/capital/brokers-calls/frencken-gets-buy-amid-expectations-positive-year-analysts-lower-target-price
Analysts have taken a strong liking for Frencken Group following its results for FY2021 ended Dec 31 2021.
The manufacturer’s full-year earnings grew by 38% to $58.7 million, on the back of 23.6% increase in revenue to $767.1 million.
“This was in line with our expectations [and is] at 102% of our full-year forecast and above Bloomberg consensus expectations at 106%” CGS-CIMB analyst William Tng writes in a research note.
Conversely, DBS Group Research analyst Ling Lee Keng says that the company’s latest set of results fell short of her expectations due to weaker margins.
For one, gross profit margin had eased to 16.8% in Y2021, from 17.0% in FY2020. While margins were a tad weaker across all segments, the automotive sector was hit the hardest.
Even so, she says the company’s latest set of results are “strong” and come despite disruptions to supply chains brought on by the movement restrictions to curb the spread of the coronavirus.
The semiconductor sector – which started to be on an uptrend in 2HFY2019 - remained the key contributor in FY2021, following orders for both front-end and back-end semiconductor equipment from customers in Europe and Asia.
The sector is expected to continue “being robust” since global companies are still spending heavily on capex and the chip shortage is still ongoing, RHB analyst Jarick Seet writes in a Mar 3 note.
“Strong demand from this sector should continue to benefit Frencken positively until 1H22F, before softening in 2HFY22,” he adds.
Agreeing, Ling says the sector is likely to have a slight dip in 2023, before continuing on its growth trajectory.
In the longer-term, she notes that Frencken will benefit from the growth of the semiconductor industry at a CAGR (compound average growth rate) of 8% between 2020 and 2025.
Meanwhile, Frencken’s management has also guided that the industrial automation and automotive segments are likely to see y-o-y growth in FY2022 ending on Dec 31.
For reference, revenue from the industrial automation segment had softened by 11.9% to $104.7 million due to lower capital expenditure for hard disk production equipment by a key consumer.
Sales in this segment are typically lumpy in nature and the speed and magnitude of sales growth is hinges heavily on the capital expenditure of the key customer, says Seet.
In this time, the automotive sector saw 6.6% y-o-y growth in FY2021. The segment is expected to benefit from more programmes on the back of the V2X or vehicle-to-everything trend, observes DBS’ Ling.
Seet adds that the segment should continue seeing a recovery amid expectations of an easing in the global chip shortage throughout the year.
Overall, Ling notes that all sectors that Frencken operates – including medical and analytical & life sciences – are slated to register “at least stable revenue in 1HFY22 vs 2HFY21”.
“The semiconductor, industrial automation and automotive divisions are expected to record higher revenues in 1HFY2022 vs 2HFY2021; medical and analytical & life sciences are anticipated to record stable revenue,” she adds.
Additionally, opportunities also come as Frencken ramps up its output capabilities and takes up more production facilities in Europe, Malaysia and Singapore.
The company has also been looking to expand its wallet share with customers, especially through its acquisition of Avimac in September 2021.
With this, the mechatronics division now has more production capacity and capabilities to provide new technologies and competencies  and support new programmes launched by customers, says CGS-CIMB’s Tng.
To this end, Tng, DBS’ Ling,  RHB’s Seet and  Lai Gene Lih of Maybank Kim Eng have posted “buy” and “add” calls on Frenken, at lower price targets.
Tng – whose target price is down a cent to $2.06 – says the revised call will give the counter a 26.4% upside from its $1.63 price as at  Feb 28.
Similarly, Ling believes her $2.09 call will give the counter a 31% upside. Her target price is pegged to a lower peers’ average of 13.5x (from 15.5x previously) on FY22F earnings, due to the de-rating of tech stocks globally.
Similarly, Seet says his target price of $2.10 is pegged to a lower P/E of 14x FY2022 earnings, compared to 16x P/E previously.
“We believe FY2022 will be a positive year for Frencken, as it will likely continue to post steady growth in FY22. However, growth will likely slow down y-o-y,” he explains.
“We are also positive over its long-term prospects and able management team, which justifies our ‘buy’ call,” adds Seet.
Meanwhile, Lai has pencilled a target price of $2.47, which would give the counter a 55% upside.
“We continue to favour Frencken for its growth prospects as it adds value to existing blue-chip customers – which should lead to margin expansion,” he explains.
While Frencken has not seen material impact from the ongoing Russia-Ukraine conflict, Lai cautions that it might take a hit from further supply chain bottlenecks and a change in prices.
Shares in Frencken closed flat at $1.62 on Mar 3.
Cover image: file photo
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time of esg taggings 0.03522098297253251
https://www.theedgesingapore.com/capital/brokers-calls/analysts-downgrade-china-aviation-oil-neutral-delayed-reopening-chinas
Analysts from DBS Group Research and RHB Group Research are turning neutral on China Aviation Oil (CAO) amid the uncertain outlook on the reopening of China’s international air travel.
DBS analyst Jason Sum has downgraded his recommendation on the counter to “hold” from “buy” as he sees that the delay in China’s reopening will be a drag on CAO’s earnings.
He has also lowered his target price estimate to 85 cents from $1.20 to reflect the negative earnings revisions and his less optimistic outlook.
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time of esg taggings 0.04937569587491453
https://www.theedgesingapore.com/news/russia-ukraine-crisis/dbs-ocbc-uob-halt-russia-commodities-lending-cut-risks
Singapore’s biggest banks are restricting trade financing for Russian raw materials, as the war in Ukraine spurs lenders in Asia’s largest energy and commodities trading hub to reduce exposure to the sanction-hit country.
The limits include a halt on issuing so-called letters of credit in US dollars for trades involving Russian commodities, including oil and liquefied natural gas, according to people familiar with the situation.
DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. have stopped issuing letters of credit involving Russian energy deals because of uncertainty over the course of sanctions, according to the people, who asked not to be identified as the information isn’t public. OCBC’s restrictions cover all commodities, one of the people said.
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time of esg taggings 0.026192884892225266
https://www.theedgesingapore.com/capital/brokers-calls/qm-valuations-still-attractive-despite-4qfy2021-earnings-miss
While Q&M Dental Group saw record earnings of $30.5 million for the FY2021 ended December , its earnings of $3.2 million for the 4QFY2021 stood below analysts’ expectations.
CGS-CIMB Research analysts Tay Wee Kuang and Kenneth Tan, who expected the dental group to log earnings of $7.4 million for the quarter alone, attributed the lower-than-expected earnings to staff costs that were higher than expected, as well as tax expenses.
According to the analysts in their Feb 24 report, Q&M’s revenue for the 4QFY2021 stood broadly in line with their expectations at 99% of their forecasts as they had “expected a seasonally stronger dental core revenue to partially offset lower Covid-19 testing during the quarter as Singapore shifted towards self-testing”.
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https://www.theedgesingapore.com/capital/brokers-calls/analysts-mixed-sats-air-traffic-takes-once-again
Analysts from DBS Group Research, and Citi Research have maintained their “buy” calls on SATS, with unchanged target prices of $4.90 and $4.60 respectively
CGS-CIMB Research meanwhile, has kept its “hold” call, but raised its target price slightly from $4.32 to $4.34.
SATS reported a fourth straight quarter of profitability, with 3QFY2022 earnings (ended December) coming in at $5.1 million, a 282.1% jump y-o-y. Revenue stood at $307.8 million, a 22.6% rise y-o-y.
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time of esg taggings 0.06407504598610103
https://www.theedgesingapore.com/capital/brokers-calls/dbs-and-maybank-maintain-buy-aztech-warn-earnings-risks
Analysts from DBS Group Research and Maybank have maintained their “buy” calls on Aztech Global, but lowered their target prices from $1.54 and $1.26 respectively to $1.48 and $1.13.
Both DBS’ Ling Lee Keng and Maybank’s Lai Gene Lih have noted Aztech’s “remarkable” results for FY2021, as well as an expanding orderbook.
Ling writes in a Feb 23 report that “amidst a tough operating environment posed by the global logistical and component challenges, Aztech reported a remarkable set of results with a 33.5% y-o-y jump in net profit.”
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time of esg taggings 0.02485365094617009
https://www.theedgesingapore.com/capital/brokers-calls/dbs-downgrades-japfa-hold-near-term-outlook-remains-subdued
DBS Group Research is downgrading its call on Japfa to “hold” from “buy” with a lower target price of 67 cents from 89 cents previously.
Despite its cheap valuation, analyst Cheria Christi Widjaja expects near term outlook to remain subdued and margin pressure may linger in 2022, as raw material and logistics costs stay elevated.
According to the analyst, the group’s swine operation in Vietnam is expected to remain weak, dragged by softer swine prices due to the lingering impact of the Covid-19 pandemic and the resurgence of African Swine Fever (ASF) during 4Q2021.
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time of esg taggings 0.04866663599386811
https://www.theedgesingapore.com/capital/brokers-calls/shopee-16-regions-dbs-group-research-sees-95-upside-sea
Sea Limited (Sea) offers higher e-commerce growth than its peers. Combined with its businesses in gaming, FinTech and food delivery, DBS Group Research analyst Sachin Mittal has renewed faith in its growth strategy.
In a Feb 21 note, Mittal is maintaining “buy” on Nasdaq-listed Sea with a lowered target price of US$272 ($367.99), down from $278 previously. The new target price represents a 95% upside.
Sea engages in the digital entertainment, e-commerce, and digital financial service businesses primarily in seven countries across Greater Southeast Asia.
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time of esg taggings 0.06144328392110765
https://www.theedgesingapore.com/capital/brokers-calls/rhb-upgrades-riverstone-neutral-cleanroom-margins-dbs-cuts-tp-estimate-lower
The team at RHB Group Research has upgraded Riverstone to “neutral” from “sell”, as it sees the glove company’s cleanroom glove average selling prices (ASPs) to remain resilient in the shorter term.
The team has also upped its target price estimate on the counter to 74 cents from 65 cents before. The new target price implies an FY2023 P/E of 16x, which is in line with its pre-pandemic five-year mean.
“Depending on specifications, Riverstone’s cleanroom glove ASPs are quoted at US$105.00 – US$110.00 ($141.24 - $147.96) currently, after passing on the cost savings to its customers,” writes the team.
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https://www.theedgesingapore.com/news/sustainability/91-stake-sunseap-edpr-establish-apac-hq-singapore-10-bil-investment
EDP Renewables (EDPR) has completed an agreement with Singapore solar energy company Sunseap to establish its Asia Pacific headquarters in Singapore.
The company announced last November that it had acquired a 91% stake in Sunseap, the largest distributed solar player and fourth largest solar player in Southeast Asia.
Following the close of its $1.1 billion deal with Sunseap on Feb 24, EDPR now plans to invest up to $10 billion into Sunseap by 2030 to create an industry-leading clean energy hub for the region out of Singapore.
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https://www.theedgesingapore.com/capital/brokers-calls/raffles-medical-buy-even-though-growth-set-normalise-once-pandemic-abates
Analysts have taken a strong liking for Raffles Medical Group following its results for FY2021 ended Dec 31.
The healthcare services provider’s full-year earnings rose by 27.7% to $84.2 million, from $65.9 million in the year before, thanks to stronger revenue growth.
This is “in line with our expectations” and shows that the group is slowly transitioning to business as usual, RHB analyst Shekhar Jaiswal writes in a Feb 22 note.
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https://www.theedgesingapore.com/capital/brokers-calls/analysts-buoyant-gentings-prospects-gradual-reopening-after-fy2021-dividend
Analysts from DBS Group Research, UOB Kay Hian and RHB Group Research are remaining buoyant on Genting Singapore’s prospects as Singapore gradually reopens its borders. Their optimism also comes despite the group’s 4QFY2021 results and dividend for the FY2021 coming in below expectations.
Maybank Securities is the only house to remain neutral on the counter.
DBS analyst Jason Sum has kept “buy” on the counter with an unchanged target price of $1.
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time of esg taggings 0.02467891713604331
https://www.theedgesingapore.com/capital/brokers-calls/analysts-positive-sasseur-reit-following-strong-4q21-results
Analysts are positive on Sasseur REIT’s growth prospects after the REIT reported its 4QFY21 results on Feb 18.
CGS-CIMB, Maybank Securities and DBS Group Research analysts have kept their “add” and “buy” calls, with target prices of $1.06, $1.10 and $1.15, respectively. The REIT’s FY21 DPU, which reached a new high of 7.104 cents, surpassed the analysts’ and consensus estimates.
Sasseur REIT reported entrusted manager agreement (EMA) rental income of $35.4 million in 4QFY21. Its income available for distribution expanded 8.4% y-o-y to $25.3 million, underpinned by higher fixed component of the EMA rental income, a stronger renminbi, as well as interest cost savings, note CGS-CIMB analysts Lock Mun Yee and Eing Kar Mei.
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time of esg taggings 0.025243159849196672
https://www.theedgesingapore.com/capital/budget-2022/real-estate-sector-see-little-no-impact-higher-property-taxes-dbs-and-rhb
Property developers are expected to see little to no impact by the latest Budget 2022 measures, according to DBS Group Research and RHB Group Research. The Budget 2022 that was announced on Feb 18 included an increase in property taxes for investment property, as the government moves to tap the wealthy for a bigger proportion of its tax revenues.
DBS’ and RHB’s views differ from CGS-CIMB Research’s, which reckons a “downward knee-jerk reaction” to the share prices of developers and property agencies. “We expect some erosion in the rental yield on investment property, particularly for high-end segment. In our view, this could negatively impact demand and selling prices for larger properties in the high end in the near-term,” says CGS-CIMB’s head of research Lim Siew Khee.
See more: Higher property taxes to have negative impact on developers and property agencies: CGS-CIMB
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time of esg taggings 0.06653672992251813
https://www.theedgesingapore.com/capital/covid-19/pandemic-situation-peak-1q2022-singapore-should-see-swift-rebound-tourism-2q2022
With the new vaccinated travel lanes (VTLs) set to return from Feb 25, DBS Group Research analysts Jason Sum, Geraldine Wong and Rachel Tan estimate that Singapore should “reopen” by 65% to 70% by June and could potentially reach 90% to 95% if China eases its border controls.
New VTL lanes with Qatar, the UAE and Saudi Arabia will begin on Feb 25 and VTLs with Israel and the Philippines will begin on March 4.
In addition to the resumption of its new VTLs, Singapore is also looking to relax its quarantine and testing requirements.
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time of esg taggings 0.04513940098695457
https://www.theedgesingapore.com/capital/brokers-calls/aztech-global-strong-buy-given-natural-advantage-iot-dbs
DBS Group Research is maintaining its “buy” call on integrated solutions provider Aztech Global at a lower target price of $1.54.
This is down 13 cents from the previous $1.67 call and is expected to give the counter a 67% upside from its 92-cent price on Feb 15, analyst Ling Lee Keng writes in a research note.
“Our new target price is pegged to a lower FY2022 peer average of 12x (vs 13x previously) due to the de-rating of tech stocks globally on FY2022 earnings,” she explains.
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time of esg taggings 0.02237975993193686
https://www.theedgesingapore.com/capital/brokers-calls/dbs-positive-sembcorp-industries-amidst-its-green-transformation
DBS Group Research analyst Ho Pei Hwa has maintained a ‘buy’ rating on Sembcorp Industries (Sembcorp) with an increased target price to $3 from $2.40, based on a higher price-to-book value (P/BV) multiple of 1.4 times (from 1.2 times previously). The higher target price is also based on a rolled over valuation to FY2022 (from blended FY2021/2022), against 9-10% normalised return on equity (ROE).
“Successful execution of [Sembcorp’s] renewable energy plan, translating into earnings growth, would further lift valuations, writes Ho in his Feb 15 report.
In May 2021, Sembcorp unveiled its strategy to transform its portfolio from brown to green, by focusing on growing renewables and integrated urban solutions businesses. It set quantitative targets to quadruple its renewable portfolio to 10GW by 2025, from 2.6GW of wind and solar capacity in Southeast Asia, India, and China as of end-2020, according to Ho.
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time of esg taggings 0.025630851974710822
https://www.theedgesingapore.com/digitaledge/news/dbs-offers-complimentary-cybersecurity-training-singapore-smes
Small and medium-sized enterprises (SMEs) in Singapore can now take up a complimentary cybersecurity training programme by DBS to strengthen their cybersecurity posture.
The DBS #CyberWellness comprises 10 online modules covering different facets of cybersecurity such as password protection, phishing, digital scams, physical security, and social media security.
Each module can be accessed from anywhere at any time through an e-learning platform, making training more accessible for time-strapped employees. Completing all the modules will take no more than two hours.
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time of esg taggings 0.04555687098763883
https://www.theedgesingapore.com/capital/brokers-calls/analysts-largely-positive-dbss-growth-after-4q-results-estimated-tps-least-40
Analysts are mostly positive on DBS Group Holdings' growth prospects after the bank reported its results for the 4QFY2021 on Feb 14.
While Maybank Securities, RHB Group Research and UOB Kay Hian have kept their “buy” calls, OCBC Investment Research has rated the bank “hold” despite its “solid double-digit” share price gains year-to-date.
According to OCBC’s research team, the share price gains has underscored its prior calls to add positions.
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time of esg taggings 0.021608041832223535
https://www.theedgesingapore.com/news/cryptocurrency/dbs-digital-exchange-hits-billion-dollar-mark-trading-value-fy2021
DBS’s members-only DBS Digital Exchange (DDEx) has recorded over $1.1 billion in trading value in the FY2021 ended December.
This is the digital exchange’s first full year of operations.
DDEx, which is one of the world’s first bank-backed digital exchanges, saw momentum pick up significantly after it went operational 24/7 in August 2021.
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time of esg taggings 0.04503633105196059
https://www.theedgesingapore.com/capital/results/dbs-posts-record-net-profit-681-bil-fy2021-declares-dividend-36-cents-4qfy2021
DBS Group Holdings has posted a record net profit of $6.81 billion for the FY2021 ended December, up 44% y-o-y. The higher net profit was backed by higher return on equity (ROE) at 12.5% from 9.1% in the FY2020 previously.
The bank’s earnings for the 4QFY2021 stood 37% higher y-o-y at $1.39 billion.
During the quarter, the bank declared a dividend of 36 cents, bringing the total dividend for the FY2021 to $1.20. The dividend will be payable on or around April 22.
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time of esg taggings 0.02200826513580978
https://www.theedgesingapore.com/news/tech/former-sia-dbs-and-singtel-chair-koh-boon-hwees-vc-firm-raises-us130-mil-tech-fund
The venture capital firm co-founded by former Singapore Airlines Ltd. Chairman Koh Boon Hwee closed its first fund at US$130 million ($174.54 million) to back startups in Southeast Asia’s fast-growing technology industry. The firm, Altara Ventures, drew in investors including Singaporean and South Korean sovereign wealth funds, Razer Inc., and a Europe-based fund of funds, Dave Ng, one of the firm’s five general partners, said in a phone interview. It exceeded its initial target of $100 million, he said. Koh, 71, also the former chairman of DBS Group Holdings and Singapore Telecommunications, founded Altara in 2020 with four fellow investors to tap Southeast Asia’s tech boom. About 70% of the fund has been earmarked for the region, with the firm focusing on areas including fintech, consumer internet, health care, logistics, enterprise software and education.
“We saw many consumer-focused fintech and logistics startups chart the way during the first decade,” Ng said. “As the region matures, we’re also looking to help build the next wave of tech companies.”
Ng and fellow partner Gavin Teo previously worked at B Capital, Facebook Inc. co-founder Eduardo Saverin’s venture capital house. The other three partners are Koh, Tan Chow Boon and Seow Kiat Wang, who founded Omni Industries, an electronics components maker acquired by Celestica Inc. in 2001.
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time of esg taggings 0.04351631901226938
https://www.theedgesingapore.com/capital/brokers-calls/dbs-ups-hphts-tp-37-us-cents-amid-stellar-fy2021-results-and-dividend
DBS Group Research analyst Paul Yong has kept his “buy” recommendation on Hutchison Port Holdings Trust (HPHT) after the trust’s “stellar” results for the FY2021 ended December roundly beat Yong’s expectations.
On Feb 9, HPHT reported FY2021 net profit of HK$1.75 billion ($301.0 million), up 110% y-o-y on exceptional storage, while its distribution per unit (DPU) for the FY2021 came up to 14.5 HK cents, above the brokerage’s street high forecast of 14 HK cents.
The trust’s strong performance, which was mainly led by higher storage income, is expected to partially continue into the FY2022 as port congestions remain high.
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time of esg taggings 0.024327329825609922
https://www.theedgesingapore.com/capital/brokers-calls/dbs-dividend-payout-not-impacted-supervisory-action-rhb
The Singapore research team at RHB Group Research has maintained its ‘buy’ rating on DBS with an unchanged target price of $40.40 after the bank was asked to set aside an additional $930 million in regulatory capital by the Monetary Authority of Singapore (MAS).
The imposition by the central bank was due to the disruption of its digital banking services in November 2021.
DBS has been asked to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk. “MAS has also directed DBS to appoint an independent expert to conduct a comprehensive review of the incident, including the bank’s recovery actions, where DBS must rectify all shortcomings identified,” write the analysts.
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time of esg taggings 0.04551035608164966
https://www.theedgesingapore.com/news/regulatory-action/mas-imposes-additional-capital-requirement-dbs-2-day-digital-services-outage
The Monetary Authority of Singapore (MAS) has imposed an additional capital requirement on DBS Bank following the widespread unavailability of its digital banking services between Nov 23 and 25 last year.
With this, DBS Bank is required to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk. This means the bank will have set aside an additional amount of around $930 million in regulatory capital to guard against such risks.
The amount – which is based on DBS’ reported financial statements as at Sep 30 2021, is four times higher than in 2010 when the bank encountered a similar disruption.
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time of esg taggings 0.02542179706506431
https://www.theedgesingapore.com/capital/brokers-calls/analysts-keppel-pacific-oak-us-reit-steady-performance
Analysts from DBS Group Research and RHB Group Research are keeping “buy” on Keppel Pacific Oak US REIT (KORE) after the REIT saw distribution per unit (DPU) for the FY2021 ended December grow by 1.8% y-o-y to 6.34 US cents (8.53 cents).
DPU for the 4QFY2021 also increased by 2.6% y-o-y to 1.60 US cents.
The higher DPUs were due to the REIT’s newly-acquired assets in the 2HFY2021, and are in line with the estimates by DBS analysts, Rachel Tan, Geraldine Wong, Dale Lai and Derek Tan.
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time of esg taggings 0.05127897416241467
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-remains-positive-dbs-and-ocbc-ahead-4qfy2022-results
UOB Kay Hian analyst Jonathan Koh is keeping his “overweight” call on the Singapore banking sector, as he sees all three banks as being the prime beneficiaries of higher interest rates.
Ahead of the banks’ results for the 4QFY2021 and FY2021, Koh predicts a lull in all three banks’ results, as is typically seen during the quarter.
DBS Group Holdings is slated to release its results on Feb 14, while UOB and OCBC are scheduled to release their results on Feb 16 and Feb 23 respectively.
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time of esg taggings 0.02346528391353786
https://www.theedgesingapore.com/capital/brokers-calls/s-reit-sector-bottoming-out-ahead-rate-hikes-time-accumulate-weakness-dbs
DBS Group Research analysts Geraldine Wong, Derek Tan, Rachel Tan and Dale Lai find that almost half of the 44 Singapore REITs (S-REITs) listed on the Singapore Exchange (SGX) are trading close to 52-week lows, highlighting attractive re-entry points.
It was a tough month for the S-REITs in January, with the FSTREI dipping by 6.6% while the benchmark Straits Times Index (STI) remains on a firm upward trajectory of approximately 4.0%.
The weakness largely came from rising expectations in the market of Fed rate hikes in 2022 with the consensus now expecting in the range of four to five hikes through the course of the year, write the analysts in their Feb 3 report.
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time of esg taggings 0.022357959067448974
https://www.theedgesingapore.com/capital/brokers-calls/singapore-market-amidst-index-rebalancing-omicron-and-rate-hikes-anticipation
As the FY2021 earnings season draws to a close in the current results season, DBS Group Research analysts Kee Yan Yeo, Wei Le Chung and Janice Chua believe it is now an opportune time for investors to position into companies that are anticipated to deliver earnings recovery or acceleration over the coming few quarters.
“Our picks for earnings recovery generating over 10% earnings per share growth for FY2022 vs negative growth in FY2021 are Suntec REIT, Ascot Residence Trust (ART), AEM, and Starhub,” say the analysts. “Meanwhile, ThaiBev and Venture Corp should see FY2022 earnings growth picking up further from the previous year.”
Additionally, the Monetary Authority of Singapore’s (MAS) latest off-cycle tightening move is a reminder that inflation remains a key concern, especially in 1HFY2022, according to Yeo, Chung and Chua. “Banks should continue to outperform in an inflationary, rising rates environment,” say the analysts. “Our pick is UOB. City Dev is our developer pick with properties often viewed as an inflation hedge. Value stocks thriving on the value unlocking team tend to outperform in a volatile environment.”
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time of esg taggings 0.023986988933756948
https://www.theedgesingapore.com/capital/brokers-calls/dividend-uplift-finally-dbs-optimistic-kit-after-strategic-review
DBS analyst Suvro Sarkar has maintained his “buy” call and target price of 60 cents on Keppel Infrastructure Trust, after the trust announced an increased distribution per unit in FY2021.
KIT announced a full-year DPU of 3.78 cents, up 1.6% compared to the same period last year.
The group also recorded free cash flow to equity (FCFE) of $192.2 million in FY2021, down 15% y-o-y.
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time of esg taggings 0.03895793715491891
https://www.theedgesingapore.com/capital/brokers-calls/analysts-positive-cict-results-come-within-expectations-rhb-upgrades-counter
Analysts from DBS Group Research, Maybank Securities, OCBC Investment Research, RHB Group Research and UOB Kay Hian are positive on CapitaLand Integrated Commercial Trust (CICT) after the REIT’s distribution per unit (DPU) for the FY2021 of 10.40 cents stood largely in line with their expectations.
RHB analyst Vijay Natarajan has upgraded CICT to “buy” from “neutral” as he now sees the REIT’s outlook “brightening” from the easing of restrictions after “two tough years”.
The REIT’s contributions kicking in from its developments and the completion of its asset enhancement initiatives (AEIs) has also led Natarajan to see value emerging for CICT.
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time of esg taggings 0.039225488901138306
https://www.theedgesingapore.com/capital/brokers-calls/dbss-purchase-citis-taiwan-consumer-seen-positive-not-transformational-maybank
Maybank Securities analyst Thilan Wickramasinghe has kept “buy” on DBS Group with an unchanged target price of $37.03 after the Singapore-based lender announced that it was buying Citibank’s consumer business in Taiwan.
The bank will pay a total of $2.2 billion, which comprises a premium of $956 million in cash, plus $1.2 billion to support the risk-weighted assets and capital needs.
The way Wickramasinghe sees it, the cumulative pricing at 1.8 times price-to-book (P/B) is “not cheap”. But the deal can be “meaningfully synergistic” to DBS’s Greater China strategy.
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time of esg taggings 0.03699434804730117
https://www.theedgesingapore.com/news/ma/dbs-pay-956-mil-premium-acquire-citis-taiwan-consumer-business
Following UOB’s acquisition of Citi’s consumer business in four Asean markets, DBS Group Holdings is the next Singapore-based lender to pick up where Citi is leaving.
On Jan 28, DBS said it is buying Citibank’s consumer business in Taiwan by paying a premium of $956 million in cash, plus the value of its net assets.
DBS will be injecting a total of $2.2 billion into this deal which consists of the $956 mil in premium as well as $1.2 billion to support the risk-weighted assets and capital needs.
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time of esg taggings 0.02383719407953322
https://www.theedgesingapore.com/issues/stocks-watch/dbs-group-holdings-higher-interest-rates-china-buy-and-slew-digital-assets-bode
Last year, DBS Group Holdings outperformed the Straits Times Index and the market by rising more than 30%. It was also the best performer among the three local banks. Since the start of this year, the bank’s share price is up 8.5%. We reckon that DBS will continue to perform this year. This is why.
First, interest rates are trending up this year, with the US Federal Reserve indicating three to four likely hikes this year. Assuming four rounds of 25 basis points each, that is a 1% hike, which will lift the net interest income of DBS by as much as $2 billion, estimates RHB Group Research. In contrast, the same hike will give Oversea-Chinese Banking Corp (OCBC) an $800 million boost whereas United Overseas Bank (UOB) might see between $500 million and $600 million.
With 9MFY2021 already at $5.41 billion, DBS might record a fullyear FY2021 ended December 2021 earnings of $7 billion, versus FY2020’s $4.7 billion. Besides the lift from higher rates, DBS in FY2022 is likely to enjoy contributions from its recent acquisition: A 13% stake in Shenzhen Rural Commercial Bank for $1.079 billion or 1.01 times net asset value. DBS group CEO Piyush Gupta said this deal was immediately EPS accretive.
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time of esg taggings 0.02627451717853546
https://www.theedgesingapore.com/capital/brokers-calls/analysts-largely-positive-keppel-reit-likely-recovery-office-sector
Analysts from DBS Group Research, Maybank Securities and RHB Group Research are mostly positive on Keppel REIT after it posted its results for the FY2021 on Jan 25 .
For the FY2021 ended December, Keppel REIT reported a distribution per unit (DPU) of 5.82 cents, up 1.6% y-o-y. In the 2HFY2021, the REIT’s DPU fell 1.7% y-o-y to 2.88 cents.
The higher total FY distribution is attributed to accretive acquisitions made in Melbourne and Sydney, as well as Singapore’s Keppel Bay Tower.
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time of esg taggings 0.025169333908706903
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-keppel-dc-reit-trimmed-tps
CGS-CIMB and DBS Group Research analysts observe upbeat FY2021 earnings reported by Keppel DC REIT (KDC), driven by acquisitions, AEIs, and higher occupancy rate.
However, for CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee, they’ve lowered their target price on this stock to $2.70 from $2.78 previously, to take into account higher cost of equity assumptions in view of the increasing interest rate environment.
The analysts, who are keeping their “add” call on KDC, noted that its FY2021 revenue increased 2.1% y-o-y to $271.1 million, driven by asset enhancement initiative contributions from Dublin and Singapore assets, full-year contribution from Kelsterbach and Amsterdam DC, as well as the acquisitions of Eindhoven and Guangdong DC.
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time of esg taggings 0.03336022491566837
https://www.theedgesingapore.com/capital/brokers-calls/dbs-starts-daiwa-house-logistics-trust-buy-tp-95-cents
DBS Group Research has initiated “buy” on Daiwa House Logistics Trust (DHLT) with a target price of 95 cents, representing a 17% upside to the REIT’s last-traded price of 81.5 cents as at Jan 21.
The target price assumes a weighted average cost of capital (WACC) of 5.2% and a risk-free rate of 1.5%. This implies a target yield of 5.5% to 5.6%. The target price also does not assume any acquisitions in the analysts’ projections.
DHLT is a REIT that has a pure-play on logistics with a portfolio of 14 modern facilities in Japan with “solid fundamentals”, say analysts Dale Lai and Derek Tan in their Jan 24 report.
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time of esg taggings 0.025330851087346673
https://www.theedgesingapore.com/news/finance/glp-self-executes-first-100-million-note-issue-dbs-fix-marketplace
DBS announced that real estate player GLP has self-executed its maiden $100 million six-month commercial paper issue on the bank’s FIX Marketplace.
This represents the largest commercial paper issuance that has been executed on the platform to date.
GLP, a global investment manager and business builder in logistics, data infrastructure, renewable energy and related technologies, is rated BBB- by Standard & Poor's and BBB by Fitch Ratings.
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time of esg taggings 0.024970797123387456
https://www.theedgesingapore.com/capital/brokers-calls/dbs-ups-nanofilms-fy2021-earnings-estimates-indications-strong-4qfy2021
DBS Group Research has kept “buy” on Nanofilm Technologies International as it sees the supply chain disruption stabilising.
To be sure, DBS analyst Ling Lee Keng expects the company to report strong figures for the 4QFY2021 ended Dec 31, 2021, and that the 3QFY2021 could be the “worst quarter” for Nanofilm on the supply front.
“Overall, the group is projected to report a positive growth in earnings of 8% for FY2021, despite expectations of higher costs, including one-off and higher operating costs as the group expands,” she writes in her Jan 21 report.
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time of esg taggings 0.025057257153093815
https://www.theedgesingapore.com/capital/brokers-calls/dbs-downgrades-sabana-reit-hold-valuations
DBS Group Research has downgraded its recommendation on Sabana REIT from “buy” to “hold” after the REIT delivered a “strong set” of results for the FY2021 ended Dec 31, 2021, on Jan 20.
The REIT’s distribution per unit (DPU) for the FY2021 increased 10.5% y-o-y to 3.05 cents, in part due to the lower base in FY2020.
During the year, Sabana REIT also reported an improved portfolio occupancy, which was mainly attributable to its multi-tenanted buildings.
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time of esg taggings 0.023206270998343825
https://www.theedgesingapore.com/capital/right-timing/old-king-coal-merry-old-soul-because-coal-prices-surged
The two locally listed coal stocks gained more than bitcoin last year, and they were not as volatile. As can be seen from the price charts, they just rose and rose till they didn’t. At one point Geo Energy Resources was up 123%, ending the year up just shy of 80%. Golden Energy and Resources rose by 76% in 2021, although at one point in October, its share price was up 200%. These gains are more spectacular than bitcoin, which reportedly increased by just 62%.
We all know inflation is at a 40-year high and US interest rates are rising. As a result, bond yields and local currency bond yields and rates are also rising. The message to investors in the past few years is that renewables are good, and coal — especially coal — is not.
Nonetheless, DBS Private Bank’s chief investment office (CIO) says: “As hard commodities, the resource sector is a good inflation hedge as prices tend to rise when inflation is rising. Among these, we believe gold, metals, and oil should outperform the rest as there are additional catalysts which will continue to support prices.” No mention of coal, the dirty fuel.
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time of esg taggings 0.025791771011427045
https://www.theedgesingapore.com/capital/brokers-calls/telco-sector-starting-look-more-exciting-dbs
DBS Group Research analyst Sachin Mittal seems excited for the regional telecommunications industry’s outlook this year. The way he sees it, last year could have been the inflection point and this year could finally be when the sector sees growth after five years of underperformance.
“After a long period of below-par returns, telecom sector is turning more exciting. Having underperformed for a long time, telecom sector outperformed in Indonesia and Thailand but still underperformed in Singapore in 2021,” says Mittal, who believes that this could be attributed to the mobile sector consolidation in Indonesia and Thailand.
In Singapore, fourth mobile network operator TPG secured a small tranche of 5G spectrum in November 2021, dashing hopes of sector consolidation in the near term. There have been some recent consolidations and partnerships between the large telco players in Singapore lately too, with StarHub acquiring a 50.1% stake in MyRepublic’s broadband business in Singapore.
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time of esg taggings 0.02602499187923968
https://www.theedgesingapore.com/news/ma/dbs-buy-citigroup-taiwan-assets-nt60-billion-economic-daily-news-says
DBS Group Holdings will pay about NT$60 billion to buy Citigroup Inc.’s consumer bank assets in Taiwan, according to Economic Daily News.
The Singapore-based lender emerged as the preferred bidder after three Taiwanese financial institutions withdrew from the bidding process, the Taipei-based publication reported Sunday, citing people it didn’t identify.
Spokespeople at DBS and Citi declined to comment on the report.
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time of esg taggings 0.024532191921025515
https://www.theedgesingapore.com/capital/brokers-calls/dbs-maintains-hold-sgx-due-no-immediate-catalyst
DBS Group Research analyst Lim Rui Wen has maintained her “hold” call for Singapore Exchange (SGX) as there are no immediate catalysts for the stock, on top of mixed performances of 1HFY22 equities and derivatives volumes.
This is despite the good contributions SGX saw from all business segments over the past two years, including from equities and fixed income, currencies and commodities (FICC), on the back of heightened market volatility.
Lim notes that the stock also faces competition risks. “SGX’s FTSE China A50 Index futures, which used to be the only offshore China A50 futures, accounting for about 40% of SGX’s total derivatives volumes, now sees competition from HKEX's MSCI China A50 Connect index futures, which is gaining market share. Should HKEX continue to gain market share, there is potential earnings risk for SGX as well,” she adds.
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time of esg taggings 0.025881591951474547
https://www.theedgesingapore.com/capital/brokers-calls/dbs-starts-digital-core-reit-buy-tp-us140
DBS Group Research has initiated “buy” on Digital Core REIT with a target price of US$1.40 ($1.88).
The target price is based on a discounted cash flow (DCF) model with a weighted average cost of capital (WACC) of 5.3% (and a risk-free rate of 2.0%).
“This implies a normalised target yield of 3.6% in the next two years. We have assumed a total of US$750 million in acquisitions over the next two years,” write analysts Dale Lai and Derek Tan in a Jan 14 report.
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time of esg taggings 0.04579135705716908
https://www.theedgesingapore.com/capital/brokers-calls/dbs-proceeds-buy-rating-ihh-amidst-ongoing-lawsuit
DBS Group Research analyst Rachel Tan has kept her ‘buy’ rating on IHH with an increased target price of $2.32 from $2.00 previously.
IHH is currently trading at a very attractive FY2022 EV/EBITDA of 14 times, close to -2 standard deviation of its historical range and is positioned to ride on the strong pent-up demand from foreign patients when borders reopen, says Tan.
Earlier on Jan 5, IHH announced that it has been in legal tussles with US fund Emqore Envesecure Private Capital Trust since June 2020.
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time of esg taggings 0.024918542010709643
https://www.theedgesingapore.com/capital/brokers-calls/investment-gone-wrong-dbs-downgrades-econ-healthcare-hold-after-4-mil
DBS Group Research analyst Paul Yong has downgraded Econ Healthcare (Asia) to “hold” after the private nursing home operator invested some $4 million in Hong Kong-listed Crosstec , which later saw an 84% decline in share price.
“While the losses could be recouped, we believe Econ’s investment mandate and strategy should be tightened significantly,” writes Yong in a Jan 12 note.
Yong has a target price of 28 cents for Econ Healthcare, with a raised weighted average cost of capital (WACC) of 11.8%.
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time of esg taggings 0.06554760807193816
https://www.theedgesingapore.com/capital/brokers-calls/property-sector-offers-deep-value-accumulate-further-weakness-dbs
DBS Group Research analysts Derek Tan and Rachel Tan believe it’s a good time to buy Singapore property stocks, given attractive valuations that are “too good to ignore”.
Their recommendation comes nearly a month after the government announced a fresh set of property cooling measures effective Dec 16, 2021.
See: Fresh set of property cooling measures with immediate effect
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time of esg taggings 0.04295048909261823
https://www.theedgesingapore.com/capital/reits/keep-eye-out-retail-office-and-hospitality-s-reits-1qfy2022
Investors looking to invest in Singapore REITs (S-REITs) should remain focused on the re-opening theme, such as retail, office and hospitality S-REITs in FY2022. This is as it continues to see favour in the new year, say DBS Group Research analysts Geraldine Wong, Derek Tan, Rachel Tan and Dale Lai.
To date, the impact of the Omicron variant has proven to be milder than the Delta variant, observe the analysts in a Jan 5 report.
“We anticipate a strong retail sales performance in 4Q to propel domestic festivity spending for the retail REITs as overseas travel was once again jeopardised by the onset of Omicron. The hospitality sector continued to see strong domestic demand across the December holidays even as Vaccinated Travel Lane (VTL) ticket sales were announced to be halted until the 20th of January 2022,” write the analysts.
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time of esg taggings 0.03872777591459453
https://www.theedgesingapore.com/capital/brokers-calls/dbs-starts-grab-holdings-buy-tp-us9
DBS Group Research has initiated “buy” on Grab Holdings with a 12-month target price of US$9 ($12.19), representing a 25% upside to its last-traded price of US$7.22 on Jan 3.
The target price also translates to 6.5 times of FY2023’s adjusted revenue.
“We assign a 30% premium to Grab for its multi-sector leadership, cross-selling synergies and higher growth potential compared to DoorDash, Uber and PayPal in their respective sectors,” writes analyst Sachin Mittal on Jan 4.
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time of esg taggings 0.024856091011315584
https://www.theedgesingapore.com/capital/brokers-calls/dbs-says-capitaland-investment-born-fly-tp-400
DBS Group Research analysts Derek Tan and Rachel Tan have re-initiated a ‘buy’ rating on CapitaLand Investment (CLI) with a target price of $4.00, offering a 20% upside.
The analysts expect the catalysts that emerge to be the launch of new fund products and REIT acquisitions, with an aim to grow funds under management (FUM) to $100 billion by 2024, up 19% from 2021, and a rebound in operational performance from its lodging business.
“These are expected to drive a three-year net profit compound annual growth rate by 12% during FY2021-FY2024,” say the analysts.
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time of esg taggings 0.04532104101963341
https://www.theedgesingapore.com/capital/singapore-economy/earnings-expected-recover-pre-covid-levels-fy2022-dbs
In 2022, DBS Group Research analysts Yeo Kee Yan, Janice Chua and Woon Bing Yong estimate that Singapore’s gross domestic product (GDP) will grow to 3.5%.
Inflation during the year may average around 2.4%, predict the analysts in a Jan 3 report.
“2022 is the year where investors juggle between a more resilient transition to living with Covid-19 while the economy faces uncertainties from inflationary pressure, higher interest rates, uncertainty about China’s growth, and domestic policy risks,” they write.
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time of esg taggings 0.024736252147704363
https://www.theedgesingapore.com/capital/results/dhl-and-sia-ink-new-agreement-expand-partnership
DHL Express has entered into a Crew and Maintenance agreement (CM) with Singapore Airlines (SIA) to deploy five Boeing 777 freighters. This agreement marks a further step in DHL’s' expansion of its intercontinental air network amidst fast-growing international express shipping markets.
“With the deployment of five Boeing 777 freighters, we can expand our express service linking the Asia Pacific region with the Americas,” says Travis Cobb, executive vice president of global network operations and aviation at DHL. “Following Covid-19, we see good prospects for strong growth in trans-Pacific trade lanes.”
“By collaborating with Singapore Airlines, we see a unique chance to establish a long-lasting relationship with a long time partner who shares common values and operates at the highest standard,” he adds.
The initial agreement is set for more than four years with the opportunity for an extension. As part of the agreement, the first aircraft delivery will be in July 2022, with the second in October 2022. The remaining three aircraft are planned for delivery throughout 2023.
“This new agreement guarantees capacity on our critical routes out of Singapore as we gear up for ongoing growth in Asia Pacific trade,” Ken Lee, CEO of DHL Express Asia Pacific, says. “It gives us greater flexibility to add new routes and optimise our aircraft utilisation in the face of unpredictable changes or sudden increases in demand.”
Moreover, basing these freighters at Changi Airport will further reinforce Singapore’s position as a key air cargo and e-commerce logistics hub, contributing to its growth and development, explains Lee Lik Hsin, executive vice president commercial of SIA.
“This new freighter operation will support the fast-growing e-commerce segment, in addition to other key business segments that rely on trusted express services that DHL excels in providing,” he adds.
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time of esg taggings 0.06093213288113475
https://www.theedgesingapore.com/capital/brokers-calls/analysts-mixed-sia-despite-first-quarterly-profit-covid-19
Analysts have given differing calls on Singapore Airlines (SIA), with CGS-CIMB Research the most optimistic on the stock.
Analyst Raymond Yap, in his Feb 25 report, has maintained its “add” call and has raised his target price slightly from $5.86 to $5.88. He was expecting a loss of $300 million for the quarter.
Yap notes that SIA’s cargo arm outperformed expectations on the back of stronger demand, higher yields and lower unit costs on a y-o-y and q-o-q basis, thanks to a year-end spike in demand as shipping congestion forced cargo owners to send by air instead.
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time of esg taggings 0.0556858170311898
https://www.theedgesingapore.com/capital/results/singapore-airlines-reports-3q-net-profit-85-mil-first-quarterly-profit-covid-19
Singapore Airlines (SIA) has reported a net profit of $85 million for the 3QFY2021/2022 ended December, reversing from the loss of $142 million in the same period the year before.
The reversal into the black marks the airline’s first quarterly profit since the Covid-19 pandemic struck. It also comes on the back of a significant increase in air travel to and through Singapore from October 2021 to December 2021.
“Singapore’s launch of vaccinated travel lane (VTL) arrangements and its subsequent expansion, as well as the group’s nimble response that resulted in it being the first to open sales on almost all available routes, helped unlock pent-up demand during the year-end travel season,” says SIA in a statement dated Feb 24.
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time of esg taggings 0.03639505594037473
https://www.theedgesingapore.com/news/aviation-engineering/singapore-airlines-signs-377-bil-contract-general-electric-22-ge9x-engines
Singapore Airlines (SIA) has inked a contract valued at US$2.8 billion ($3.77 billion) with General Electric (GE) on Feb 16.
The contract is for an additional order for 22 of GE’s GE9X engines to power the airline’s fleet of Boeing 777-9 aircraft.
The contract also includes an order for GE’s TrueChoice services for 12 years.
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time of esg taggings 0.02457097382284701
https://www.theedgesingapore.com/issues/stocks-watch/singapore-airlines-ready-fly-higher-borders-gradually-open
The aviation and travel industries have clearly suffered amid the Covid-19 pandemic. But the world is slowly learning to live with the pandemic, and for several countries, an endemic is in sight.
Singapore, for instance, is adamant about moving forward, but cautiously. To allow families to reunite and residents to fulfil their desire for travelling, the Singapore government introduced vaccinated travel lanes (VTLs) to allow travel to certain countries without the need for quarantine on both sides. Although multiple rounds of Covid-19 testing are required, for many travellers, it is worth the hassle.
With that, the local carrier Singapore Airlines (SIA) can finally take off, with pentup demand driving the recovery. When VTL flights were made available, bookings increased by seven times, including those for premium cabins, which provide better margins for the carrier.
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time of esg taggings 0.025877967942506075
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-yangzijiang-shipbuilding-grab-holdings-sia-engineering-and
Yangzijiang Shipbuilding (Holdings) Price target: Citi Research “buy” $1.98 DBS Group Research “buy” $2.15
Share price ‘will re-rate’ upon successful spin-off Analysts from Citi Research and DBS Group Research have kept their “buy” calls on Yangzijiang Shipbuilding (Holdings) (YZJ) after the component stock of the Straits Times Index announced that it had increased the share capital of its proposed fund management and investment business to $4.3 billion. The analysts also believe that YZJ’s share price will re-rate following the successful completion of the proposed spin-off.
On March 25, YZJ said that it had increased the share capital of Yangzijiang Financial Holding (YZJFH), the entity that will soon be spun off from YZJ, to $4.3 billion comprising 3.95  billion shares, or $1.08 per share. YZJFH will be headed by Ren Yuanlin, former executive chairman of YZJ and father of current chairman and CEO Ren Letian.
The amount is exactly the same as guided by YZJ’s management during the recent FY2021 ended December results and does not come as a surprise, notes Citi analyst Jame Osman. “More importantly, we believe the move is an affirmation of YZJ’s intent to crystallise value via the spin-off, given that its core shipbuilding business is currently trading at a deep valuation discount, in our view,” the analyst writes in his report on March 27.
“As we previously flagged, at YZJ’s current valuation, the market is essentially assigning almost zero residual value for YZJ’s core shipbuilding business versus its past 10-year through-the-cycle mean of 5.4x P/E.”
“Even if we ascribe a more conservative value of 0.5x P/B multiple to its financial assets, it would yield an implied FY2022 P/E of 7x for its shipbuilding business,” he adds. “We continue to believe that a successful spin- off of its investment arm could drive a potential re-rating of YZJ on the basis of improved earnings quality and attract investors seeking more direct exposure to the company’s core shipbuilding business.”
So far, the valuation of the proposed entity has been the main concern for investors with the distribution of the shares of the new entity in specie to existing YZJ shareholders, in which some investors are concerned of a potential sell-off and valuation de-rating.
“We think these concerns may be overdone, considering that 90% of YZJ’s financial assets currently are liquid; classified under current assets. Management had flagged that it is targeting a potential valuation of 1x P/B. Ultimately, the shares of YZJFH could trade on a yield basis,” says Osman.
“Little is known at this stage in terms of [its] potential income distribution, although management has outlined broad plans for the asset management business and its structure,” he adds.
To Osman, YZJ has strong medium-term earnings visibility and momentum, with its record order book and delivery slots filled till 2024. The group also has a positive near-term industry outlook; the potential spin-off of its debt business is a key catalyst to its share price re-rating.
Osman has given YZJ a target price estimate of $1.98 based on a sum of the parts (SOTP) valuation methodology.
“Debt investments currently account for about 30% of the group’s total assets. We have accorded a 13x P/E multiple, a slight discount to +1 standard deviation historical mean, to YZJ’s shipyard operations given lower expected earnings volatility going forward as the shipping industry recovers; and also taking into account that: we expect the group to remain profitable, with respectable ROEs or return on equities (in excess of its peers); and to recognize significant strides the group has made in market share gains,” he writes.
“We value the group’s debt investments at 0.5x book, a slight discount to trading valuations of Chinese banks (0.7x) taking into account YZJ’s less developed credit controls when compared to banks,” he continues.
In his report, Osman sees weaker-than-expected margins from orders secured during the downturn disappointing contract-win quantum/or significant number of order cancellations; and the execution risk of projects as key downside risks to YZJ’s share price performance.
In a note dated March 27, DBS Group Research has given YZJ a target price estimate of $2.15, which values YZJFH at 0.7x P/B of 77 cents. The remaining shipbuilding-related business is valued at $1.38.
“Assuming fair value of YZJFH at 77 cents, Yangzijiang’s current share price of $1.46, only value shipbuilding-related business at 69 cents per share, implying unwarrantedly low valuation of 0.8x P/B and [an estimated] 6x P/E despite 13% ROE and potential upside to 4% dividend yield,” says the brokerage.
In its note, the brokerage believes that YZJ is set to re-rate closer to its target price of $2.15 following the completion of the spin-off.
If all goes to plan, the listing of YZJFH could be completed by end-April or early May this year, says the brokerage.
As at 4.53pm, shares in YZJ are trading 3 cents higher or 2.055% up at $1.49. — Felicia Tan
Grab Holdings Price target: Maybank Securities “buy” US$4.32
Grab’s risk reward deemed ‘attractive’
Maybank Securities analyst Lai Gene Lih has initiated a “buy” call on Grab Holdings with a target price of US$4.32 ($5.88). The target price offers a potential upside of 30% to Grab’s last-closed share price of US$3.32 as at March 25.
Lai’s report on March 28 comes after the NASDAQ-listed counter saw its shares fall some 70% since its Spac merger in December 2021.
According to the analyst, Grab’s risk-reward is deemed “attractive” in the next 24 months as it strives for profitability.
On Dec 2, 2021, shares in Grab made its debut on the Nasdaq, opening at US$13.06. The counter ended the day with its shares trading at US$8.75, down more than 20%. Lai sees Grab as a beneficiary of the economic digitisation and rising affluence in Southeast Asia and that its superapp model drives strong retention among its users. He also says that the one-year retention of users who use over three offerings stands at a retention rate of 86% compared to the 37% of users who use just one offering. “This makes Grab more efficient with incentives, which we see as key to its ability to achieve profitability over time,” writes Lai.
Grab has given a total of US$80 in incentives per monthly transacting users in 2019; US$74 in 2021 and is expected to give US$65 in 2025. Its strong hyperlocal executive across Southeast Asia’s diverse countries, which allows it to scale its user base, is another positive. “Grab has localised ‘boots-on-the ground’/ app-features/ transport modes, and even has its own proprietary maps and mapping technology to boost transit efficiency,” adds Lai.
In addition, Grab’s mobility offerings reduce travel time for its users compared to public transportation. For instance, it has reduced travel time for 20% of its users in Thailand and 70% in the Philippines. Lai expects the region’s economic reopening to drive the recovery of Grab’s mobility segment.
He continues: “Despite loosening restrictions, Grab observes deliveries becoming integral to daily life (average order value +41%/ transactions per monthly transaction user or MTU +28% versus pre-Covid-19).” Lai has also projected a mobility gross merchandise value (GMV) CAGR of 27% for the FY2021 ended December 2021 to FY2025, and has an estimated normalised deliveries GMV CAGR of 28% for the same period. Normalised deliveries in FY2021 saw a 56% y-o-y increase, he adds.
However, any price wars from Grab’s competitors or higher-than-estimated incentives may hurt Grab’s profitability, warns Lai. “Rising inflation and/or regulatory changes that require pension contributions by Grab to driver-partners could also hurt its path to profitability.” Furthermore, a resurgence of Covid-19 related lockdowns is a risk for mobility. Finally, co-founder Anthony Tan has 63% of voting rights (and owns 6%), which may create risks for minority shareholders who may find it difficult to exercise control over the company’s direction, says Lai. He has forecast GMV and net revenue CAGR of 27% and 31% over FY2021 to FY2025 respectively. “We are projecting Grab to deliver adjusted Ebitda/Patmi break-even by FY2024 and FY2025, respectively,” he says. “As regional economies reopen, stronger than expected mobility segment recovery may be a catalyst.” — Felicia Tan
SIA Engineering Price target: UOB Kay Hian “buy” $2.80
Preferred proxy to ride Singapore’s aviation recovery
UOB Kay Hian analyst Roy Chen has re-initiated a “buy” recommendation on SIA Engineering with a target price of $2.80 as the industry’s recovery is “well on track” and SIA Engineering is positioned in a faster lane of recovery compared to peers whose financial performances are more geared to the relatively laggard passenger volume growth.
Chen adds that SIA Engineering is set to be first among the local aviation-related companies to report positive core earnings, with an earnings estimate of $92 million for the FY2023 ending March 2023, which will be equivalent to 57% of FY2019, the full year before the pandemic hit.
The company is also well positioned to resume dividend payment in as early as FY2023. This is considering its earnings recovery and strong balance sheet carrying some $679 million in net cash. “We do not rule out the possibility of a special payout by FY2024, given its major shareholder Singapore Airlines’ (SIA) cash needs for mandatory convertible bond (MCB) redemption,” Chen adds.
Moreover, SIA Engineering’s various joint ventures across the region are set for recovery too, as airlines contract out more work before the impending pick up heightened demand with full recovery of the aviation industry. This has been made possible with SIA Engineering’s strong business development foundation and ties with the major engine makers, says Chen. Some risks the analyst notes include events that disrupt the sector’s recovery and increase competition for SIA Engineering’s maintenance, repair and overhaul (MRO) business. — Chloe Lim
Singapore Exchange Price target: RHB Group Research “neutral” $10
SGX’s ‘volatile times’ could imply short-term benefit RHB Group Research Shekhar Jaiswal has kept a “neutral” rating on Singapore Exchange (SGX) with an increased target price of $10, from $9.80.
“While we are positive on SGX’s long-term growth prospects from its latest acquisitions and potential pipeline of new listings, we remain concerned about the lack of near-term re-rating catalysts,” he writes. The analyst notes that continued global macroeconomic uncertainty could in fact lead to better-than-expected trading volume in the near term.
With the continuing Russia-Ukraine crisis causing elevated geopolitical tensions, this has in turn created heightened price volatility in global equity markets, with SGX seeing increased trading activity in February.
The securities daily average value (SDAV) increased 21% y-o-y to $1.6 billion, bringing the YTD SDAV to $1.2 billion for FY2022 ending June, in line with the analyst’s FY2022 SDAV estimates of $1.2 billion. SGX’s derivatives segment also saw an uptick in trading activity, with the average daily trading volume (DDAV) of 1.03 million.
In addition, the US Federal Reserve has started the cycle for higher interest rates with a 25 basis points (bps) interest rate hike in the Federal Funds Rate in March. Jaiswal expects another five to six interest rate hikes this year that could create scope for higher treasury income for SGX.
However, Jaiswal has some concerns as the exchange’s cost is “elevated”. Meanwhile, revenue contribution from its recent acquisitions could take time to scale up. There also appears to be stiffer competition from Hong Kong Exchange’s bid to grow its derivatives business which risks taking away trading volume from SGX.
Finally, with the full induction of New York-listed Sea into MSCI Singapore, securities market turnover could remain soft as some trading volume could move away from SGX-listed stocks to Sea.
On the other hand, Jaiswal foresees a number of upside risks that include higher-than-estimated trading volume from the potential pipeline of ETFs, REITs and spac listings. Overall, the analyst views the stock’s valuation as “reasonable” amid modest earnings growth, as it is trading at an FY2022 P/E of 23.4x, above its historical average, while offering a modest yield of 3.3% that is lower than the Straits Times Index’s yield of 4%. — Chloe Lim
article_here
time of esg taggings 0.07018013997003436
https://www.theedgesingapore.com/capital/brokers-calls/sia-engineering-preferred-proxy-ride-singapores-aviation-recovery-uobkh
UOB Kay Hian Research analyst Roy Chen has re-initiated a “buy” recommendation on SIA Engineering with a target price of $2.80, while keeping a “market weight” rating on the overall Singapore aviation sector, as he sees the recovery of the sector as being “well on track”.
See: UOB Kay Hian expects Singapore aviation sector to recover by end-2024, sees SIAEC as top pick to ride on recovery
This is in lieu of increasing flight activities at Changi Airport with the recent relaxation of international restrictions, which Chen believes will outpace the expected passenger volume recovery.
With that, the group is strategically positioned in a faster lane of recovery compared to peers whose financial performances are more geared to the relatively laggard passenger volume growth.
According to Chen, SIA Engineering is set to be the first to regain positive core net profit within the local aviation scene (excluding government grants). “We are now projecting net profit to recover to $92 million in FY2023 ending March 2023, representing 57% of its pre-Covid-19 (FY2019) level,” says the analyst, especially in light of the consistent narrowing of core net losses over the past five quarters. If SIA Engineering keeps up the trajectory, it is expected to report core net profit in the next one to two quarters.
The group is also well positioned to resume dividend payment in as early as FY2023, according to Chen. This is considering its earnings recovery and strong balance sheet, displaying $679 million in net cash. “We do not rule out the possibility of a special payout by FY2024, given its major shareholder Singapore Airlines’ (SIA) cash needs for mandatory convertible bond (MCB) redemption,” Chen says.
Moreover, SIA Engineering engine and components’ joint ventures are set for positive recovery, after also demonstrating resilience during the Covid-19 pandemic, working with airlines and engine original equipment manufacturers (OEMs) to bring forward service volume with the impending heightened demand with full recovery of the aviation industry.
This has been made possible with SIA Engineering’s strong business development foundation, especially with regard to strengthening relationships with global leading engine OEMs for the group to expand its existing engineering capabilities. A prime example would be its acquisition of Malaysia-based SR Technics Malaysia for SIA Engineering to optimise its maintenance, repair and operations (MRO) business.
Some risks the analyst notes include events that disrupt the sector’s recovery and increase competition for SIA Engineering’s MRO business.
As at 10.42am, shares in SIA Engineering are trading flat at $2.47 at an FY2022 P/B ratio of 1.6x on March 30.
article_here
time of esg taggings 0.029788980958983302
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-expects-singapore-aviation-sector-recover-end-2024-sees-siaec-top
UOB Kay Hian analyst Roy Chen has maintained his “market weight” recommendation on the Singapore aviation sector as he sees the recovery of the sector as being “well on track”.
“The consensus among aviation experts indicates that the sector is likely to recover to the pre-Covid-19 level towards end-2024 (FY2025 for Singapore-listed players),” writes Chen in his March 29 report.
To be sure, the International Air Transport Association (IATA) has estimated global air travel passenger volume to recover to 103% of its pre-Covid-19 levels by 2024, with the Asia Pacific (APAC) region trailing behind at 97% of its pre-Covid-19 levels in 2024.
“Our conversations with the management of the three listed Singapore aviation companies (Singapore Airlines or SIA, SATS and SIA Engineering Company or SIAEC) have revealed a similar timeline – the consensus is that the Singapore aviation sector is likely to fully recover by FY2025,” the analyst says.
“We expect positive news flow on air traffic recovery and Singapore’s further opening up to keep sentiment towards the aviation sector buoyant in the medium term,” he adds.
The recent relaxation of international restrictions by the Singapore government is also a positive development for the Singapore aviation sector, notes Chen.
“[We] expect it to help Singapore move closer towards its goal to restore the passenger volume at Changi Airport to at least 50% of the pre-Covid-19 level in 2022,” he adds.
Within the sector itself, however, Chen sees varying paces of recovery among the counters, with SIAEC being the fastest, followed by SATS.
“Due to airlines’ proactive capacity re-activation plans (SIA will re-activate a flight as long as the operation is cash-generative), we expect flight activities to recover relatively faster than passenger volume,” the analyst says.
“As such, revenue of businesses directly geared to flight activities, including SIAEC’s line maintenance services (about 50% of its pre-Covid-19 revenue) and SATS’ ground handling services (30%) should recover faster than revenue of businesses linked to relatively lagged passenger volume, such as SIA’s passenger flown revenue (80%) and SATS’ infight catering revenue (40%),” he adds.
Chen also expects SIAEC and SATS, which are both in net cash positions, to resume paying dividends in FY2023, when they would have returned to core net profits, according to his estimates.
“SIAEC’s dividend outlook is further raised by its 77.6% shareholder SIA’s cash needs for [the redemption of its mandatory convertible bonds (MCBs), which is likely to be in early FY2025]. As such, we do not rule out the possibility of a special payout by SIAEC by FY2024,” says Chen.
With this, the analyst has identified SIAEC as his preferred proxy to the recovery of the aviation industry, with SATS coming in second.
He has re-initiated “buy” calls on SIAEC and SATS with target prices of $2.80 and $4.65 respectively.
“SIAEC has made good progress in its business developments during the pandemic, including deepening relationships with some of the world’s leading engine original equipment manufacturers (OEMs). These developments are expected to contribute to SIAEC’s growth in the long term,” says Chen.
“SIAEC is currently trading at 14.4x FY2025 P/E, which is 2.3 standard deviation below its five-year mean of 23.2x in a normal market (FY2014-2019),” he adds.
“We like SATS for its regional market leadership in inflight catering and aviation gateway services, making it a primary beneficiary of the air traffic recovery in the APAC region. We also applaud the company’s efforts to diversify into the non-aviation segment and expect it to become another growth engine for SATS in the longer term,” writes the analyst.
“Having said that, we note some of its recent greenfield investments (e.g. the central kitchen investments in India and Singapore) may take a gestation period of two to three years before bearing fruit,” he adds.
Furthermore, Chen feels SATS would face keener cost pressure from inflation and headcount build-up in the near term, although he sees these pressures being passed down to its customers as business conditions for SATS continue to recover.
“SATS is currently trading at 17.6x FY2025 P/E, which is 0.8 standard deviation below its five-year mean of 19.9x in a normal market (FY2014-2019),” says Chen.
On SIA, Chen notes that its MCBs have to be redeemed earlier before the airlines’ earnings recovery can deliver meaningful value accretion to SIA’s shareholders. Besides, the MCBs would turn out to be “highly dilutive” if they are held to maturity and then converted, he adds.
“The impact of Covid-19 on SIAEC and SATS is largely transient (manifested by goodwill/property, plant and equipment or PPE impairments, one-off in nature),” says the analyst.
“We caution that SIA, the largest listed proxy to Singapore aviation, has had its valuation run beyond the justified level by traditional valuation metrics,” he adds.
Chen has also re-initiated coverage on SIA with a “hold” recommendation and a target price of $4.80.
“[SIA] is currently trading at 1.50x FY2023 P/B, an unprecedentedly high level or 4.2 standard deviation above its long-term historical mean of 0.79x. This could be due to the market: not fully comprehending the impact from the MCBs (and their distortion on SIA’s financials), and/or trying to speculate on the strong market sentiment from the positive news flow,” the analyst writes.
“We have recommended ‘hold’ on SIA in light of the anticipated buoyant sentiment to the company. However, we highlight that we have applied very favourable assumptions for SIA, with our target price aggressively based on a discounted cash flow (DCF) value three years down the road. Investors are recommended to sell SIA into further share price strength,” he adds.
Despite the positive sentiment on the sector, which includes catalysts such as a faster-than-expected pace of global opening up and travel relaxation, Chen warns that newer Covid-19 variants that are more fatal or infectious may disrupt the process of opening up.
The further escalation of the Russia-Ukraine war may also dampen travel sentiment.
Shares in SIAEC, SATS and SIA closed $2.47, $4.34 and $5.50 on March 29.
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time of esg taggings 0.03823864203877747
https://www.theedgesingapore.com/news/aviation-engineering/sia-reports-highest-ever-cargo-revenue-135-bil-3qfy20212022-cargo-business
Singapore Airlines (SIA) has reported a record cargo revenue of $1.35 billion for the 3QFY2021/2022.
In its update on its cargo business on March 15, the group says this is the first time its revenue for its cargo business has surpassed the $1 billion mark.
During the 3QFY2021/2022, the airlines also reported revenue of $832.8 million for its pax flown segment, and revenue of $132.2 million for its engineering services, other pax and others segment.
In that quarter, the airlines saw cargo yields increase 26.9% y-o-y to 81.5 cents per load tonne-kilometres (LTK).
In its outlook statement, the airline is less buoyant on its figures for the 4QFY2021/2022, saying that it expects overall air cargo demand to ease on the back of the record peak period in the 3QFY2021/2022.
This is in line with seasonal fluctuations, and the traditional slowdown in exports during the Lunar New Year holiday period, says the airline.
Nonetheless, both air and sea freight capacities are expected to remain tight during the quarter, supporting loads and yields, it adds.
In its business update, SIA revealed that it has ordered seven A350F freighters to replace its existing fleet of seven Boeing 747-400F. Deliveries will begin in the four quarter of 2025. According to the airline, the new fleet will reduce its carbon emissions by 400,000 tonnes annually as the A350F burns up to 40% less fuel on similar missions.
As at March 1, SIA flies to 97 destinations on its cargo route network. It has a 36:64 freighter and bellyhold split as at the date, compared to the 21:79 split in the FY2019/2020, pre-Covid-19.
Shares in SIA closed at $5.03 on March 14.
Photo: SIA
article_here
time of esg taggings 0.027716156095266342
https://www.theedgesingapore.com/capital/results/dhl-and-sia-ink-new-agreement-expand-partnership
DHL Express has entered into a Crew and Maintenance agreement (CM) with Singapore Airlines (SIA) to deploy five Boeing 777 freighters. This agreement marks a further step in DHL’s' expansion of its intercontinental air network amidst fast-growing international express shipping markets.
“With the deployment of five Boeing 777 freighters, we can expand our express service linking the Asia Pacific region with the Americas,” says Travis Cobb, executive vice president of global network operations and aviation at DHL. “Following Covid-19, we see good prospects for strong growth in trans-Pacific trade lanes.”
“By collaborating with Singapore Airlines, we see a unique chance to establish a long-lasting relationship with a long time partner who shares common values and operates at the highest standard,” he adds.
The initial agreement is set for more than four years with the opportunity for an extension. As part of the agreement, the first aircraft delivery will be in July 2022, with the second in October 2022. The remaining three aircraft are planned for delivery throughout 2023.
“This new agreement guarantees capacity on our critical routes out of Singapore as we gear up for ongoing growth in Asia Pacific trade,” Ken Lee, CEO of DHL Express Asia Pacific, says. “It gives us greater flexibility to add new routes and optimise our aircraft utilisation in the face of unpredictable changes or sudden increases in demand.”
Moreover, basing these freighters at Changi Airport will further reinforce Singapore’s position as a key air cargo and e-commerce logistics hub, contributing to its growth and development, explains Lee Lik Hsin, executive vice president commercial of SIA.
“This new freighter operation will support the fast-growing e-commerce segment, in addition to other key business segments that rely on trusted express services that DHL excels in providing,” he adds.
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time of esg taggings 0.03818202600814402
https://www.theedgesingapore.com/capital/investing-ideas/sia-reports-first-quarterly-profit-pandemic-flight-full-recovery-still
Thanks to cargo traffic, Singapore Airlines (SIA) has reported its first quarterly report since the pandemic struck. While analysts are cheered by the numbers, they also caution that full recovery takes time, as risks of new variants and higher fuel prices loom.
CGS-CIMB analyst Raymond Yap was expecting the flag carrier to report a loss of $300 million, instead of core earnings of $28 million for 3QFY2022 ended December 2021.
Yap, who has an “add” call and a $5.88 target price on the stock from $5.86 previously, notes that SIA’s cargo arm outperformed expectations on the back of stronger demand, higher yields and lower unit costs on a y-o-y and q-o-q basis.
“The cargo strength was on account of the year-end spike in airfreight demand, as well as the container shipping congestion which forced cargo owners to move goods via airfreight instead,” writes Yap in his Feb 25 note.
SIA’s cargo flown revenue increased by 81.6% y-o-y to a record $1.35 billion, surpassing the $1 billion mark for the first time.
On Feb 25, SIA reported earnings of $85 million for the 3QFY2022 ended December 2021, reversing from the loss of $142 million in the same period the year before.
Despite this, the airline still posted a loss of $752 million for the 9MFY2022, although that is a 79.2% y-o-y improvement from the $3.61 billion loss in 9MFY2021. Revenue for 3QFY2022 more than doubled y-o-y to $2.3 billion, while revenue for 9MFY2022 was up 90.4% y-o-y to $5.14 billion.
Besides cargo, passenger revenue improved too, due to the introduction of so-called vaccinated travel lanes (VTL) from September 2021 onwards.
Despite higher than pre-pandemic fares, these flights were “enthusiastically embraced”. The airline’s passenger flown revenue increased 355.2% y-o-y to $833 million, on the back of a 556.8% growth in traffic, leading to a passenger load factor of 33.2% - up 18.9 percentage points.
Despite things looking up, Yap warns SIA might report a loss again for its 4QFY2022 ending March, with the year-end travel season over, along with softer cargo demand.
In addition, Singapore also suspended new ticket sales for VTL flights from Dec 23, 2021, to Jan 20, and halved the VTL daily quota from Jan 21 onwards, although it will fully restore the quota between Feb 17 and March 4.
On the cost side, spot jet fuel prices have surged to US$111 ($150.70) per barrel, from just US$85 per barrel three months back, with SIA hedged for just 30% of its needs in the current quarter.
Yap cautions that higher fuel prices will be a key downside risk given how the airline has hedged just 40% of what it plans to use for FY2023. Nevertheless, he says that “prospects for FY2023 continue to brighten”, says Yap, citing how Singapore has committed to restoring the full VTL quota from Mar 4 onwards.
The country has already simplified Covid-19 testing protocols to reduce the cost of travel into Singapore, and will eventually expand the VTL scheme to all vaccinated travellers from around the world by the middle of this year once the Omicron wave subsides.
Chu Peng of OCBC Investment Research has turned somewhat bullish too. While she kept her “hold” call, Chu has given SIA a higher fair value of $5.23, from $5.08 previously. Chu expects the airline’s recovery to gain pace, although that is on the assumption that no new variants will pop up.
Similar to CGS-CIMB’s Yap, for 4QFY2022, she sees SIA reporting a “softer q-o-q” due to seasonality impact and temporary suspension of VTL and reduction of quota in January and February 2022.
DBS Group Research, meanwhile, rates SIA a “hold” but with a target price of just $4.90. Analysts Paul Yong and Jason Sum point out that a “cashed up” SIA is in a strong position to wait patiently for a recovery, citing the couple of fund-raising undertaken by controlling shareholder Temasek.
However, they worry over how the timeline for a sustained reopening of international borders to air travel continues to be pushed back with the emergence of new Covid-19 variants.
They also point out that the mandatory convertible bonds, with some $9.7 billion in issue, could be highly dilutive whether eventually redeemed or converted.
Yong and Sum also believe that SIA’s long-term recovery has largely priced in already, given how the share price is trading around 1.2 times its book value, which is not too far off its 10-year mean.
SIA shares closed March 2 at $5.07, down 0.78% for the day but up 1.2% year to date.
Photo: SIA
article_here
time of esg taggings 0.05951546900905669
https://www.theedgesingapore.com/capital/brokers-calls/analysts-mixed-sia-despite-first-quarterly-profit-covid-19
Analysts have given differing calls on Singapore Airlines (SIA), with CGS-CIMB Research the most optimistic on the stock.
Analyst Raymond Yap, in his Feb 25 report, has maintained its “add” call and has raised his target price slightly from $5.86 to $5.88. He was expecting a loss of $300 million for the quarter.
Yap notes that SIA’s cargo arm outperformed expectations on the back of stronger demand, higher yields and lower unit costs on a y-o-y and q-o-q basis, thanks to a year-end spike in demand as shipping congestion forced cargo owners to send by air instead.
article_here
time of esg taggings 0.024391991086304188
https://www.theedgesingapore.com/capital/results/singapore-airlines-reports-3q-net-profit-85-mil-first-quarterly-profit-covid-19
Singapore Airlines (SIA) has reported a net profit of $85 million for the 3QFY2021/2022 ended December, reversing from the loss of $142 million in the same period the year before.
The reversal into the black marks the airline’s first quarterly profit since the Covid-19 pandemic struck. It also comes on the back of a significant increase in air travel to and through Singapore from October 2021 to December 2021.
“Singapore’s launch of vaccinated travel lane (VTL) arrangements and its subsequent expansion, as well as the group’s nimble response that resulted in it being the first to open sales on almost all available routes, helped unlock pent-up demand during the year-end travel season,” says SIA in a statement dated Feb 24.
article_here
time of esg taggings 0.02444262709468603
https://www.theedgesingapore.com/capital/results/sia-engineering-says-pace-revenue-recovery-uncertain
In a business update, SIA Engineering says with international flight activities continuing to recover with progressive relaxation of border restrictions and establishment of bilateral travel arrangements, the number of flights handled at the Group’s Singapore base was 65% higher year-on-year and 17% higher quarter-on-quarter. While this volume of flights handled is only at 31% of pre-pandemic volume, the continuing recovery trend is encouraging, the company says.
According to the company, with this recovery, demand for transit services and aircraft return-to-service work increased while demand for aircraft preservation work reduced as more aircraft return to service. At Base Maintenance, more aircraft maintenance checks were performed during the quarter as compared to last year, but the work content of these checks was lighter as a higher proportion of the checks performed were for young new-generation aircraft. The Engine Services Division formed at the start of the financial year is making progress in growing its suite of engine-related capabilities. Its new facility to provide quick turn maintenance on CFM LEAP engines will start operations towards the end of this financial year.
During the three months to Dec 31, 2021, longterm contracts were signed to provide CFM LEAP engine testing services to Safran Aircraft Engines and expanded on-wing services for Rolls-Royce Trent engines. Preparations to strengthen these capabilities are in progress before the engine maintenance activities commence and will gradually pick up in the next financial year. With higher flying activities, business volume at SIA Engineering's joint venture companies is also gradually recovering. Total engine inductions and shipments at our engine JVs is about 25% below the pre pandemic level.
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time of esg taggings 0.02724905894137919
https://www.theedgesingapore.com/news/sustainability/sia-embarks-sustainability-measures-singapore-airshow-takes
As the world pushes towards the Paris Climate Accord’s goal of “net zero emissions” by 2050, the aviation industry has also made strides to try to decarbonise the sector by introducing more efficient engines and lighter mate­rials in planes (so less fuel will be burnt while flying), and more recently, using so-called sustainable aviation fuel (SAF).
One might wonder, what is SAF? Sim­ply explained, it is a term used by the aviation industry to describe an aviation fuel that is not derived from fossil fuels.
The International Aviation Transport Authority says these fuels can be derived from biofuels or fuels from alternative sources. Feedstocks for SAF can range from cooking oil, plant oils, municipal waste to agricultural residues.
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https://www.theedgesingapore.com/news/aviation-engineering/sia-first-world-operate-new-a350f-variant-after-finalising-order-airbus
Singapore Airlines (SIA) has finalised a purchase agreement with Airbus for seven A350F freighter aircraft to replace its existing 747-400F fleet, with an option for five more.
Back in December 2021, SIA had revealed it signed a provisional agreement to buy the freighters, and with this deal, the airline becomes the first in the world to operate the new variant when deliveries complete in 20225
The deal was signed at the Singapore Airshow between SIA CEO Goh Choon Phong, and Airbus Chief Commercial Officer and Head of International Christian Scherer.
article_here
time of esg taggings 0.024919806979596615
https://www.theedgesingapore.com/news/aviation-engineering/singapore-airlines-signs-377-bil-contract-general-electric-22-ge9x-engines
Singapore Airlines (SIA) has inked a contract valued at US$2.8 billion ($3.77 billion) with General Electric (GE) on Feb 16.
The contract is for an additional order for 22 of GE’s GE9X engines to power the airline’s fleet of Boeing 777-9 aircraft.
The contract also includes an order for GE’s TrueChoice services for 12 years.
article_here
time of esg taggings 0.07458370504900813
https://www.theedgesingapore.com/news/company-news/sia-engineering-sets-new-unit-grow-component-repair-business
SIA Engineering Company Limited has set up the new Component Services Division (CSD) to grow its component maintenance, repair and overhaul (MRO) business.
Effective from April 1, all existing component repair and fleet management services, which include inventory technical management services, will be consolidated under CSD.
CSD will focus on growth through acquisition and development of new capabilities, thereby broadening the company’s range of service offerings to airline customers and deepening its partnerships with original equipment manufacturer (OEMs), reads a Feb 11 press release.
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time of esg taggings 0.024277764838188887
https://www.theedgesingapore.com/news/tech/former-sia-dbs-and-singtel-chair-koh-boon-hwees-vc-firm-raises-us130-mil-tech-fund
The venture capital firm co-founded by former Singapore Airlines Ltd. Chairman Koh Boon Hwee closed its first fund at US$130 million ($174.54 million) to back startups in Southeast Asia’s fast-growing technology industry. The firm, Altara Ventures, drew in investors including Singaporean and South Korean sovereign wealth funds, Razer Inc., and a Europe-based fund of funds, Dave Ng, one of the firm’s five general partners, said in a phone interview. It exceeded its initial target of $100 million, he said. Koh, 71, also the former chairman of DBS Group Holdings and Singapore Telecommunications, founded Altara in 2020 with four fellow investors to tap Southeast Asia’s tech boom. About 70% of the fund has been earmarked for the region, with the firm focusing on areas including fintech, consumer internet, health care, logistics, enterprise software and education.
“We saw many consumer-focused fintech and logistics startups chart the way during the first decade,” Ng said. “As the region matures, we’re also looking to help build the next wave of tech companies.”
Ng and fellow partner Gavin Teo previously worked at B Capital, Facebook Inc. co-founder Eduardo Saverin’s venture capital house. The other three partners are Koh, Tan Chow Boon and Seow Kiat Wang, who founded Omni Industries, an electronics components maker acquired by Celestica Inc. in 2001.
article_here
time of esg taggings 0.04682494420558214
https://www.theedgesingapore.com/issues/stocks-watch/singapore-airlines-ready-fly-higher-borders-gradually-open
The aviation and travel industries have clearly suffered amid the Covid-19 pandemic. But the world is slowly learning to live with the pandemic, and for several countries, an endemic is in sight.
Singapore, for instance, is adamant about moving forward, but cautiously. To allow families to reunite and residents to fulfil their desire for travelling, the Singapore government introduced vaccinated travel lanes (VTLs) to allow travel to certain countries without the need for quarantine on both sides. Although multiple rounds of Covid-19 testing are required, for many travellers, it is worth the hassle.
With that, the local carrier Singapore Airlines (SIA) can finally take off, with pentup demand driving the recovery. When VTL flights were made available, bookings increased by seven times, including those for premium cabins, which provide better margins for the carrier.
article_here
time of esg taggings 0.025836318032816052
https://www.theedgesingapore.com/news/aviation-engineering/sia-engineering-signs-10-year-line-maintenance-and-field-services
SIA Engineering Company (SIAEC) has signed a 10-year agreement with Rolls-Royce to provide line maintenance and in-field services for Rolls-Royce Trent 7000, 1000, 900, 800, 700, 500 and XWB engines.
In an announcement, SIAEC said it will provide in-field services at its facilities for Rolls-Royce customers in Singapore including Singapore Airlines, supported by solutions through its global line maintenance network.
The new agreement is an extension of SIAEC’s existing on-wing care services with Rolls-Royce, covering On-Wing Support, Borescope Inspections, Engine Changes and Engine Build-Up services for the Rolls-Royce Trent 1000, 900, 800 and 700 engines. It will be expanded to include new capabilities for the Trent 7000 and Trent XWB engines.
article_here
time of esg taggings 0.06131284311413765
https://www.theedgesingapore.com/news/aviation-engineering/sia-issues-us600-mil-worth-notes-3375-pa-coupon
Singapore Airlines (SIA) has launched and priced US$600 million ($809.3 million) worth of Series 010 notes on Jan 13.
The USD-denominated notes will be issued at an issue price of 99.273% of their principal amount. They will come in denominations of US$200,000 and in integral multiples of US$1,000.
The notes will bear interest at a fixed rate of 3.375% per annum, payable semi-annually in arrear.
article_here
time of esg taggings 0.024782302090898156
https://www.theedgesingapore.com/capital/brokers-calls/uobkh-adds-mm2-siaec-and-venture-its-alpha-picks-takes-profit-brc-asia-and
UOB Kay Hian has added MM2, SIA Engineering Company (SIAEC) and Venture Corporation to its alpha picks portfolio for the month of April.
To the analysts, MM2 should benefit from seeing higher capacities at its cinemas and live performances on the back of the relaxed measures, while SIAEC is leveraged to the airlines’ increased activity at Changi Airport in the wake of easing travel rules.
Venture was always chosen for its “robust demand outlook” as well as its attractive valuations.
On the other hand, counters such as BRC Asia and Yangzijiang (YZJ) have been removed from the alpha portfolio as the team has chosen to take profit on them.
BRC Asia, which has seen its share price increase by 11.4% since its inclusion in the portfolio, saw its shares re-rate after it released its results for the 1QFY2022 ended December.
“While we remain bullish on BRC for the long term, we remain cautious due to short-term headwinds such as rising steel prices,” says the team in its April 4 report.
YZJ has also seen its shares increase some 52.5% since its inclusion in the brokerage’s alpha picks.
“While we continue to like YZJ, we believe that near-term catalysts remain scarce and would look to re-enter at lower levels,” the team adds.
Overall, the brokerage’s alpha picks portfolio rose 6.3% m-o-m and outperformed the benchmark Straits Times Index (STI), which rose 5.1% m-o-m.
Key stocks that outperformed were Sembcorp Marine (SembMarine), YZJ and Ascott Residence Trust (ART), which rose 18%, 11% and 10% m-o-m respectively.
However, the portfolio underperformed on a quarterly basis, with it being up 5.3% in the 1QFY2022, compared to the STI’s 9.1% q-o-q growth. The STI was the performing Asian index during the same quarter.
The analysts have given “buy” calls on MM2, SIAEC and Venture Corp with target prices of 12 cents for MM2, $2.80 for SIAEC and $22.80 for Venture Corp.
They are also keeping “buy” on BRC Asia and YZJ.
The STI closed 2.14 points lower or 0.06% down at 3,416.97 points on April 4.
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https://www.theedgesingapore.com/capital/brokers-calls/shanghai-lockdown-minor-hiccup-venture-corp-rhb
RHB Group Research analyst Jarick Seet has kept “buy” on Venture Corporation after the group announced that it will close its operations in Shanghai for a short period.
The temporary closure came after the Shanghai government announced that the city will undergo a two-phase lockdown for nine days.
To Seet, the impact on Venture Corp’s operations will be “minimal”, as he maintains his target price at $22.80.
Beyond the temporary shutdown of its operations in Shanghai, Seet estimates that Venture Corp will see a stronger performance in the FY2022 compared to that of FY2021.
According to the analyst, the group is anticipating robust demand based on its customer orders and forecasts across various technology domains.
“In the life science domain, demand for products in the area of analytical instruments remains strong. Positive market momentum is also visible across instrumentation, test and measurement, networking and communications as well as advanced industrials domains where several new product introductions (NPIs) are also expected,” he writes in his report dated March 31.
“Customers in the lifestyle and wellness sectors have provided positive demand guidance,” he adds.
In addition, the group has a leftover backlog of orders from the 4QFY2021 to be completed for the FY2022.
“With solid demand across a majority of its domains, we expect margins to continue remain healthy,” says Seet.
However, components such as field programmable gate arrays (FPGA) are still facing a shortage, which has led to Venture Corp’s management noting that it is “not completely out of the woods yet”.
While Seet sees the shortages of key components as hampering the group’s ability to complete these orders, he believes that the group will enjoy a “strong rebound as component shortages gradually ease through the course of 2022”.
Shares in Venture Corp closed 24 cents lower or 1.35% down at $17.57 on March 31.
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https://www.theedgesingapore.com/capital/brokers-calls/rhb-upgrades-tech-sector-overweight-it-deems-sectors-risk-reward-profile-be
RHB Group Research analyst Jarick Seet has upgraded his recommendation on the Singapore technology sector to “overweight” from “neutral”.
His upgrade comes after the recent correction within the tech sector, which resulted in undemanding valuations, especially that of Singapore-listed counters.
“As the outlook of certain companies remains robust, we believe the risk-reward profile at these valuation levels has made the counters an attractive option,” writes the analyst in his March 17 report.
“We are still bullish on the semiconductor segment, but have also turned positive on certain manufacturers within the sector, as we expect the shortage of parts to ease further,” he adds.
In his report, Seet highlighted several positives that could be upsides to the sector.
One of these factors is the capital market support measures that will boost investor sentiment.
Despite the beating undertaken by the global tech sector on the back of the Russo-Ukraine war as well as the crackdown on China tech stocks, Seet highlighted the announcement made by China’s vice premier Liu He on March 16, where Liu had said that the country’s central government will roll out measures that are favourable to markets. He added that regulations that could significantly impact capital markets will be coordinated with financial management departments in advance.
See also: China stocks extend historic surge as traders cheer support vows
In addition, Seet deems manufacturers who have seen strong demand will do much better in 2022.
“Manufacturers like Venture, which booked strong 4QFY2021 results, have guided for strong orders and bright prospects this year. Manufacturing stocks have been largely impacted by the global component shortage in the last two years, but we expect this to ease in 2HFY2022,” he writes.
“This, in turn, should lead to much better numbers in FY2022, which may lead to a positive rerating for the sector. While semiconductor stocks rallied in 2020-2021, electronic manufacturing services players have seen their share prices being relatively muted. We believe this situation could change in 2HFY2022, when the component shortage is alleviated,” he adds.
Finally, Seet sees capex for semiconductor equipment firms to continue, a trend that will benefit the semiconductor supply chain, and in particular SGX counter Frencken.
According to global industry association SEMI, global semiconductor equipment billings surged 38% y-o-y to US$26.8 billion ($36.49 billion) in 3QFY2021, marking an 8% q-o-q rise to register a fifth consecutive quarterly record high.
This was driven by strong secular demand for chips across a wide range of markets including communications, computing, healthcare, online services and automotive, notes Seet.
“About 29 new tech fabrications have been planned for construction in the next few years, which should ensure high demand. Equipment spending for these 29 fabrications – 19 have already started construction, and the rest are likely to break ground in 2022 – will likely surpass US$140 billion over the next few years, as the industry pushes to address the global chip shortage,” writes Seet.
To this end, Seet has identified Frencken and Venture Corporation as his top sector picks. He has given them “buy” calls and target prices of $2.10 and $22.75 respectively.
Also within the tech sector, Seet has rated Avi-Tech Holdings at “buy” with a target price of 42 cents.
Meanwhile, he has rated Fu Yu Corp at “neutral” with a target price of 28 cents. Seet has given Valuetronics a “sell” rating with a target price of 51 cents.
As at 2.30pm, shares in Frencken, Venture Corporation and Avi-Tech Holdings are trading at $1.61, $16.68 and 33 cents respectively.
Shares in Fu Yu Corp and Valuetronics are trading at 26.5 cents and 52 cents respectively.
article_here
time of esg taggings 0.03303340286947787
https://www.theedgesingapore.com/capital/brokers-calls/phillipcapital-upgrades-venture-corp-accumulate-other-analysts-keep-buy-stock
Following Maybank Securities’ upgrade to “buy” on Venture Corporation (Venture Corp), PhillipCapital has also upgraded its recommendation on the counter to “accumulate” from “neutral” previously.
To PhillipCapital analyst Paul Chew, Venture Corp’s revenue and PATMI for the FY2021 stood within his full-year expectations.
On Feb 25, Venture Corp saw earnings of $171.7 million for the 2HFY2021, up 22.3% y-o-y. Revenue for the 4QFY2021 was up 9.2% y-o-y at $905.4 million.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/maybank-upgrades-venture-corp-buy-better-earnings-growth-fy2022-seen
Maybank Securities Singapore analyst Lai Gene Lih has upgraded Venture Corp to “buy” from “hold”, following the contract manufacturer’s FY2021 earnings that beat his expectations.
Plus, with supply chain woes easing faster than expected, and a “robust demand outlook” that should speed up earnings growth, Lai is comfortable enough to raise his target price to $21 from $19.18.
article_here
https://www.theedgesingapore.com/capital/results/venture-corp-improves-2hfy2021-earnings-1717-mil-pay-final-dividend-50-cents
Venture Corp has reported 2HFY2021 earnings of $171.7 million, up 2.9% y-o-y. Revenue in the same period was $1.68 billion, up 1.7% y-o-y.
Earnings for whole of FY2021 was $312.1 million, up 5%. Revenue, meanwhile, was up 3.1% over FY2020 to $3.11 billion.
It managed to slightly improve its net margin to 10% for FY2021 from 9.9% in FY2020.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/rhb-keeps-buy-venture-corp-it-sees-better-fy2022-ahead
RHB Group Research analyst Jarick Seet has maintained his “buy” recommendation on Venture Corporation (VMS) as he expects the group to see better times in FY2022.
Seet, who has kept his target price unchanged at $20.90, added that he expects VMS’s margins to continue improving across the next few quarters.
The better margins are said to come from new product launches with “higher design content”, says Seet in a Jan 4 report.
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https://www.theedgesingapore.com/capital/brokers-calls/phillipcapital-keeps-buy-rating-keppel-amid-mixed-bag-progress-and-delays
PhillipCapital Group Research analyst Terence Chua has kept a “buy” rating on Keppel Corporation with an unchanged target price of $7.07.
Earlier on March 31, Keppel Corporation and Sembcorp Marine (SembMarine) announced that they have made “significant progress” on advancing the proposed combination of Keppel Offshore & Marine (Keppel O&M) and SembMarine.
The progress involves mutual due diligence, the transaction structure, exchange ratio and other related matters.
However, more time and deliberation will be required to complete the due diligence to reach a mutual agreement, says Keppel Corp and SembMarine in a joint statement.
See: Keppel Corp and SembMarine to work towards 'definitive agreement' by April 30
In addition, Keppel Telecommunication & Transportation Limited (Keppel T&T) has entered into an agreement for the divestment of its entire stake in Keppel Logistics to Geodis International SAS (GEODIS) for a cash consideration of approximately $80 million. This values Keppel Logistics at an enterprise value of $150 million on a cash free and debt free basis. As such, Chua expects the divestment to improve Keppel’s ability to meet its return on equity (ROE) target of 15%.
According to the analyst, Keppel Logistics’ entities divested to GEODIS registered a net loss after tax of $5.2 million for FY2021 ended December 2021. As its non-core business has been operating at a sub-scale level, its divestment is in line with its Vision 2030 plans to simplify and focus its business, as well as enhancing its earnings.
“We believe that Keppel T&T’s priority will now be to scale up in its focus areas of sustainable data centre solutions and subsea cable systems,” says Chua, as the capital unlocked from this transaction will be used to fund its new growth initiatives.
The transaction includes Keppel Logistics' businesses in Singapore, Malaysia and Australia, as well as UrbanFox.
The analyst has also noted that significant progress has been made on advancing the sale of Keppel Offshore and Marine’s (Keppel O&M) legacy rigs and associated receivables. This is in light of how Keppel had previously announced that it will be transferring its legacy completed and uncompleted rigs and associated receivables to a separate company (Asset Co) that would be majority owned by external investors.
The Asset Co transaction and the proposed combination between Keppel O&M and SembMarine will be inter-conditional and are being pursued concurrently.
“Should the proposed transaction be successfully completed, external investors will provide capital for completing these uncompleted rigs, which would reduce Keppel’s capital requirement,” explains Chua.
Keppel’s economic exposure in Asset Co is therefore also expected to be reduced over time, as the rigs or Asset Co are sold or securitised when conditions in the rig chartering market improve.
Despite the second delay of the aforementioned proposed combination however, Chua continues to stay positive on Keppel, and believes that a definitive agreement will emerge very soon.
Some risks the analyst considers include a continued prolonged resolution for Keppel O&M and a worsening global economy.
On a whole, the analyst is positive on Keppel as the outlook of the industry is also improving, underpinned by firmer oil prices. “We expect Keppel O&M legacy rigs to be substantially monetised in the next three to five years on the back of the improving industry outlook,” says Chua. “While nothing has been firmed up, we view the developments positively as it provides better clarity on the fate of its O&M unit.”
“With the overhang removed, along with the divestment of its logistics unit, we believe Keppel will be re-rated,” he adds.
Shares in Keppel closed at $6.47 at an FY2022 P/B ratio of 0.9x and dividend yield of 4.5% on Apr 4.
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time of esg taggings 0.034455227199941874
https://www.theedgesingapore.com/capital/brokers-calls/analysts-remain-positive-keppel-corp-amid-merger-delay-and-divestment
CGS-CIMB Research analyst Lim Siew Khee is keeping her “add” call on Keppel Corporation after the group, together with Sembcorp Marine (SembMarine), announced that they will require more time to finalise a “definitive agreement” for the proposed merger of Keppel Offshore & Marine (Keppel O&M) and SembMarine.
Lim has also kept her target price unchanged at $7.20.
The new date has been set as April 30 instead of March 31 as previously stated.
Despite the delay, both Keppel Corporation and SembMarine have stated that they have made progress in the proposed merger.
In her report dated March 31, Lim has also covered the divestment of Keppel Logistics for $80 million, in which Keppel Corp will recognise a small loss.
“Earnings contribution from Keppel Logistics is immaterial to Keppel’s earnings per share (EPS), and the divestment is part of Keppel Corp’s Vision 2030 plans to be more focused,” she says.
Catalysts to Keppel Corp’s share price is a faster-than-expected projected pace of recycling, says Lim. The proposed merger with SembMarine at “favourable terms” is also another upside to the counter.
However, downside risks include a slower-than-expected macro outlook, as well as the unfavourable outcome of the merger with SembMarine.
Further to her report, Lim is upbeat on Keppel’s proposal to increase its share buyback limit to 5% from 2% in its upcoming annual general meeting (AGM) on April 22.
On Jan 27, Keppel announced a committed share buyback of $500 million or up to 2% of its issued shares.
The way Lim sees it, the increase is a reflection of Keppel’s commitment and management’s response to the discount valuations.
Citi Research analyst Brandon Lee is also retaining his “buy” call on Keppel Corp with a target price of $6.35.
“Our $6.35 per share target price for Keppel Corp is derived by taking a 10% conglomerate discount to [its] aggregate net asset value (NAV),” Lee writes in his March 31 report.
“Our target price is based on a sum of the parts (SOTP) methodology, which values the offshore & marine (O&M) division at 8x FY2022 P/E (as FY22E marks a return to a meaningful recovery, in our view), [and] the property division at 0.8x FY2021 P/B (in line with large-cap Singapore-listed developers). We value the infrastructure division on a 13x FY2021 P/E, benchmarked against Asean peers,” he adds.
Following Keppel’s proposed divestment of Keppel Logistics, Lee estimates that the group should be on track to meet its target of $5 billion by the end of FY2023.
Since October 2020 to date, the analyst estimates that the group has monetised some $3.1 billion of non-core assets, including that of Keppel Logistics.
Shares in Keppel Corp closed 4 cents higher or 0.62% up at $6.46 on April 1.
article_here
time of esg taggings 0.05448993411846459
https://www.theedgesingapore.com/news/ma/keppel-divest-logistics-business-geodis-international-80-mil
Keppel Telecommunications & Transportation (Keppel T&T) is divesting its entire stake in Keppel Logistics to Geodis International SAS for a total consideration of approximately $80 million in cash.
The consideration, which takes into account the enterprise value, financial position and Keppel Logistics’ business prospect, will value the company at an enterprise value of $150 million on a cash free, debt free basis.
The transaction includes Keppel Logistics’ businesses in Singapore, Malaysia and Australia, as well as UrbanFox. The transaction, however, will not include Keppel T&T’s logistics operations in China, which are the Jilin Food Zone Logistics Park, the Tianjin Eco-City Distribution Centre, the Keppel Wanjiang International Coldchain Logistics Park. Keppel Logistics’ stakes in Keppel Puninar Logistics in Indonesia and Indo-Trans Keppel Logistics in Vietnam will also not be included in the transaction.
Of the sum, $70 million will be payable in cash upon the completion of the divestment. The remaining $10 million would be placed in an escrow account to be released to Keppel T&T upon the fulfilment of certain performance targets in 2022 and 2023.
The entities that were being divested to Geodis registered a net loss of $5.2 million for the FY2021.
Following the divestment, Keppel T&T will continue to find opportunities to monetise the remaining non-core logistics assets and operations.
Thomas Pang, CEO of Keppel T&T says, “The divestment of Keppel Logistics, a non-core business that has been operating at a sub-scale level, is in line with the Keppel Group’s Vision 2030 plans to simplify and focus our business as well as enhance our earnings.”
“Following the divestment, Keppel T&T’s priority would be to scale up in our focus areas of sustainable data centre solutions and subsea cable systems. The transaction will also unlock capital that can be deployed to fund the Keppel Group’s growth initiatives,” he adds. “For over 50 years, Keppel Logistics has been providing customised integrated logistics solutions in Singapore. We believe the integration of Keppel Logistics as part of GEODIS would help accelerate Keppel Logistics’ growth, allowing it to scale up and provide even better value propositions to both its customers and internal stakeholders.”
Marie-Christine Lombard, Chief Executive Officer of GEODIS, says, “The acquisition of Keppel Logistics will mark a key milestone in Geodis’ Asia-Pacific ambitions. Keppel Logistics is a well-established regional player, with a strong focus on innovation. Through this acquisition which will combine Geodis’ worldwide leadership with Keppel Logistics’ robust local footprint, we believe we can create great value for our customers, facilitating their growth particularly in the e-Commerce Asian market”.
Separately, Keppel Logistics has also signed a non-binding term sheet to divest its 51% interest in Indo-Trans Keppel Logistics in Vietnam. The stake will be divested to In Do Trans Logistics Corporation, Keppel Logistics’ existing joint venture partner in Vietnam.
Shares in Keppel Corporation closed 7 cents lower or 1.08% down at $6.42 on March 31.
article_here
time of esg taggings 0.030714057153090835
https://www.theedgesingapore.com/news/offshore-marine/keppel-corp-and-sembmarine-work-towards-definitive-agreement-april-30
Keppel Corporation and Sembcorp Marine (SembMarine) has, on March 31, announced that they have made “significant progress” on advancing the proposed combination of Keppel Offshore & Marine (Keppel O&M) and SembMarine.
The progress includes mutual due diligence, the transaction structure, exchange ratio and other related matters.
However, more time and deliberation will be required to complete the due diligence, says Keppel Corp and SembMarine in a joint statement.
Both parties will also require more time in reaching a mutual agreement on the transaction terms and finalising definitive legal documentation.
They have both committed to continue with their negotiations and work towards having a “definitive agreement” by April 30.
The update comes after analysts indicated that both parties will announce a definitive agreement at the end of March following the signing of the non-binding memorandum of understanding (MOU).
In addition, Keppel Corp announced that it has made progress on advancing the sale of Keppel O&M’s legacy rigs and associated receivables to a separate company that would be majority owned by external investors.
The transaction to the separate company and the proposed combination will be inter-conditional. They are being pursued concurrently.
Further to the joint statement, both parties have emphasised that there is no guarantee that there may be a definitive agreement on the outcome of the proposed combination in spite of the ongoing discussions.
Shares in Keppel Corporation and SembMarine closed at $6.42 and 9.8 cents respectively on March 31.
article_here
time of esg taggings 0.047218799125403166
https://www.theedgesingapore.com/capital/reits/kits-manager-proposes-raise-base-fee-10-times
Business trusts just have not taken hold of investors’ imagination — and their pockets — in the way that REITs have. The most pertinent question ahead of an EGM to be held on April 19 is: Will unitholders of Keppel Infrastructure Trust (KIT) vote for a new fee structure where they are likely to pay the manager higher fees?
The old base fee was $2 million a year with some adjustment for inflation. The new proposed base fee is 10% of distributable income, which in FY2021 was $192.2 million, taking the new base fee to $19 million if the new formula is used. If approved, the new fees will be implemented in stages as such a large jump immediately this year would impact distributions.
The rationale, according to KIT’s manager, is to have a greater alignment between KIT, the manager and unitholder. The manager also needs to increase bench strength as it outlines its new growth strategy.
article_here
time of esg taggings 0.02478784113191068
https://www.theedgesingapore.com/news/company-news/keppel-infra-trust-manager-proposes-changes-fee-structure-drive-portfolio-growth
The trustee-manager of Keppel Infrastructure Trust (KIT) has proposed changes to its existing management and performance fee structures to enhance the alignment of the manager’s interests to its unitholders on March 28.
The proposed changes will also enhance its ability to drive growth through new acquisitions and investments, according to the trustee-manager.
Under the new fee structure, the trustee-manager of KIT will be paid a base fee of 10% per annum (p.a.) of KIT’s distributable income, as well as a performance fee of 25% p.a. with any increase in KIT’s distribution per unit (DPU) y-o-y, multiplied by the weighted average number of units in issue.
The trustee-manager of KIT is currently receiving a management fee of $2 million and a 4.5% performance fee pegged to KIT’s income, which has been in place since 2010 when KIT was first listed under the SGX-ST as a business trust.
No changes are proposed to the acquisition and divestment fees payable to the trustee-manager under KIT's trust deed.
“[The proposed new fee structure] reflects the increased level of resources to manage and operate KIT’s diverse portfolio, which has grown since its inception, from $760 million comprising three assets in Singapore as at Dec 31, 2010, to a well-diversified global portfolio of approximately $4.6 billion comprising nine assets across five countries as at end-February 2022,” reads the statement released by the manager.
The number of employees within the trustee-manager have also grown more than three-fold to 22 employees as at Dec 31, 2021, from its seven employees at the time of listing.
Jopy Chiang, CEO of the trustee-manager, says, “To support KIT’s growth, we will broaden our global reach and expand our talent pool in investment origination, deal execution and portfolio management. To this end, we are looking to establish offices in key overseas markets to create new synergies and increase deal flow, which will allow us to scale up faster and accelerate KIT’s growth plans.”
The proposed new fee structure is currently being widely adopted by Singapore REITs (S-REITs) listed in the last five years.
The proposed base and performance fee are subject to KIT’s unitholders’ approval at an extraordinary general meeting (EGM) to be held on April 19.
If approved, the proposed base fee will be implemented progressively over the financial year ending Dec 31, to reflect the progressive building-up of KIT’s portfolio of assets by the trustee-manager and to also allow more time to build up its resources.
Units in KIT closed at 56.5 cents on March 25.
article_here
time of esg taggings 0.05684909108094871
https://www.theedgesingapore.com/capital/right-timing/how-will-sembcorp-marine-keppel-joint-venture-pan-out
Market watchers believe that Keppel Corp is likely to be the beneficiary of the joint venture if it materialises. In terms of price action, Sembcorp Marine’s (SembMarine) share price has rebounded, largely in reaction to higher crude oil and gas prices. Keppel Corp share price performed a lot better and is up 25.15% year-todate compared with SembMarine’s 20% gain.
On June 24 last year, Keppel and SembMarine signed a non-binding memorandum of understanding (MOU) to enter into a 50:50 joint venture (JV). If the potential combination is completed, it is envisaged that the JV will be listed. SembMarine’s shareholders will hold shares in the JV. However, Keppel will receive shares in the JV and a cash consideration of up to $500 million (or a cash component with the economic equivalent effect).
Market watchers have been wondering where the $500 million cash comes from and there has been no real clarity. So far, the word is that the $500 million will be paid by the combined entity, which market watchers read as SembMarine.
article_here
time of esg taggings 0.024962774943560362
https://www.theedgesingapore.com/news/company-news/keppel-infra-trust-appoint-financial-adviser-its-strategic-review-ixom
The trustee-manager of Keppel Infrastructure Trust (KIT), on March 24, announced that it is currently undertaking a strategic review of its 100% stake in Ixom Holdings in a bid to grow the business.
A financial adviser will also be appointed in connection with the review. In addition, KIT has indicated that it may, through the adviser, undertake preliminary discussions with various parties to evaluate the viability of options available.
The exercise is part of KIT’s regular asset review process in line with its refreshed strategy following the strategic review conducted at the end of 2021.
There is no assurance that any transaction will materialise from such a strategic review or that any definitive or binding agreement will be reached, says the trustee-manager in its statement.
Ixom was acquired by KIT in 2019. It is among the leading industrial infrastructure businesses in Australia and New Zealand. It supplies and distributes critical water treatment chemicals and industrial and speciality chemicals which are key to fundamental industries.
Ixom is also the sole manufacturer of liquefied chlorine, as well as the leading manufacturer of caustic soda in Australia. The chemicals manufactured and distributed by Ixom are components used in a range of industries including the water treatment, dairy, agriculture, mining and construction sectors.
Shares in KIT closed 0.5 cent higher or 0.91% up at 55.5 cents on March 23.
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time of esg taggings 0.043480132007971406
https://www.theedgesingapore.com/news/ma/sph-shareholders-vote-overwhelmingly-favour-cuscaden-offer
After a protracted battle of the bids between Cuscaden Peak and Keppel, Singapore Press Holdings' (SPH) shareholders have given Cuscaden Peak the green light to buy the company.
At an extraordinary general meeting (EGM) held on March 22, 89.19% of shareholders holding 96.55% of the number of shares in SPH, voted in favour of the scheme resolution for the sale of SPH’s assets to Cuscaden.
The resolution required over 50% of shareholders and at least 75% of votes cast.
Shareholders holding a total of 94.25% of shares in SPH have also approved the distribution of SPH REITs for those who opted for the cash-plus-REITs option. The mix comprises $1.602 in cash and 0.782 SPH REIT units per SPH share.
The other option is an all-cash option of $2.36 per SPH share.
Cuscaden previously said that it will not include the 3 cents per share in dividends paid by SPH, or the $34 million break fee.
SPH, on Feb 14 , was given the go-ahead by the court to hold a meeting for its shareholders to decide if they wanted to accept the offer by Cuscaden Peak at the time.
Following the acceptance of the Cuscaden scheme, the group will also make a chain offer for SPH REIT, as the group holds a stake of around 65% in the REIT.
Cuscaden had previously confirmed the minimum chain offer price for SPH REIT to be at 96.4 cents apiece in November 2021 . Should the offer be formally made, the same price will still stand.
SPH owns 66.27% of separately-listed SPH REIT and such "chain offers" are required under the Securities Industry Council (SIC)'s rules
Cuscaden Peak, a consortium comprising Hotel Properties (HPL), CLA Holdings and Mapletree Investments (which are private companies owned by Temasek), first made its offer to acquire SPH on Oct 28, 2021 , rivalling Keppel’s offer at the time.
On Nov 15, 202 1, the consortium upped its offer to $2.40 per share, from its original offer of $2.10 per share. At the time, both parties had entered into an implementation agreement to privatise SPH via a scheme of arrangement.
With the mandate given by its shareholders, SPH will proceed to apply to the court for the sanction of the Cuscaden scheme, which is expected to take place on or around April 5. SPH shareholders will then be asked to elect their preferred consideration option. The payment of the consideration will be made around May 11.
“The SPH EGM and scheme meeting had been successfully concluded. Shareholders have given their support and approval for the distribution-in-specie of SPH Reit units in conjunction with the acceptance of the Cuscaden scheme. This marks the final step of the two-step strategic review announced on March 30, 2021, to unlock and maximise shareholder value. The first step was to demerge the loss-making media business which was completed on Dec 1, 2021," says Dr Lee Boon Yang, chairman of the board.
"The Cuscaden scheme is the outcome of a competitive process in the second and final step to provide shareholders an opportunity to realise their investment in SPH at a premium. I thank all shareholders, past and present, for their enduring support of SPH over the past 38 years since its listing in 1984. Last but not least, I also thank CEO Mr Ng Yat Chung and his team for their dedication and stout effort to achieve the strategic review objectives," he adds.
In the same statement released by SPH, Christopher Lim, group executive director of Hotel Properties Limited and spokesperson for Cuscaden thanked SPH shareholders for their support on the scheme and the resolution for the distribution in-specie (DIS). “Next, we will work towards facilitating the election by shareholders of their preferred option of either the all cash consideration or the cash and SPH REIT units consideration," he says.
Shares in SPH last traded at $2.34, while units in SPH REIT last traded at 96 cents before their trading halt after markets closed on March 21.
article_here
time of esg taggings 0.05999507405795157
https://www.theedgesingapore.com/news/reits/legal-proceedings-against-dxc-technology-services-over-payment-default-keppel-dc-reit
The manager of Keppel DC REIT, on March 21 announced that Keppel DC Singapore 1 has commenced a suit against DXC Technology Services Singapore in Singapore’s High Court.
Keppel DC Singapore 1 is the master lessee and appointed facility manager of the data centre located at 25 Serangoon North Avenue 5.
The dispute is said to pertain to DXC’s partial default of payment in connection with the provision of colocation services at the data centre.
DXC has disputed its liability to make payment.
According to the REIT manager, a portion of the revenue from Keppel DC Singapore 1, which is generated from its management of the data centre, is payable to Keppel DC REIT, under the lease and facilities management arrangement between Keppel DC Singapore 1 and Keppel DC REIT.
The revenue includes amounts generated from colocation services provided to customers like DXC.
The amount being disputed is around $14.8 million over a four-year period from April 1, 2021, to March 31, 2025.
The affected occupancy is approximately 0.4% of Keppel DC REIT’s total attributable lettable area as at Dec 31, 2021.
The impact arising from the disputed sum per annum is approximately 2.0% of Keppel DC REIT’s distributable income for the financial year ended Dec 31, 2021.
The dispute is said to not have a material impact on the REIT’s overall financial performance.
The manager adds that despite various commercial discussions and mediation between itself, Keppel DC Singapore 1 and DXC, the parties have not been able to arrive at a mutually acceptable resolution.
Further updates will be provided.
Units in Keppel DC REIT closed 2 cents higher or 0.89% up at $2.28 on March 21.
Photo: TES
article_here
time of esg taggings 0.02412313991226256
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-keeps-overweight-call-offshore-marine-sector-industry
UOB Kay Hian analyst Adrian Loh has maintained his “overweight” recommendation on the offshore & marine (O&M) sector as the industry’s fundamentals continue to firm up.
In his report dated March 14, Loh sees several positives for the sector’s outlook, including the higher demand for rigs amid the ongoing supply destruction.
“In the past six months, the offshore drilling industry has been able to maintain its relatively high utilisation levels as it attempts to progress past pre-Covid-19 levels. Together with these stronger utilisation numbers, we note that dayrate numbers have also risen on a y-o-y basis with the exception of drillships,” he writes.
On the back of the elevated demand, the global offshore rig industry has lost 52 rigs, or 7% less y-o-y to 712 rigs as at March 10.
“Importantly, this supply destruction was seen across all asset classes with semi-subs registering the largest decline in supply in percentage terms, down 12% y-o-y to 102 rigs while in absolute terms, jack-up rigs saw 27 units exit the industry,” adds Loh. “In our view, this removal of excess supply is clearly a positive one, and should lead to upward pressure on utilisation and dayrates going forward”.
Furthermore, the analyst sees upside potential for drilling activity in FY2022-FY2023.
Similar to his previous report on Jan 14 , Loh notes that offshore investments in 2022 are set to increase 7% y-o-y, from US$145 billion ($198.04 billion) to US$155 billion, according to independent research company, Rystad Energy.
He adds that the US$150 billion of greenfield projects sanctioned in 2021 (from US$80 billion in 2020) is likely to be repeated in 2022.
To Loh, this will underline the positive outlook for the O&M sector in the short- to medium-term.
“Underlining the strong cash generation by oil companies in 2022, the seven supermajors (BP, Chevron, Eni, Equinor, Exxon, Shell, TotalEnergie) are forecast to return around US$38 billion to US$41 billion to their shareholders via share buybacks, double the US$21 billion in 2014 when oil last cost more than US$100 per barrel,” he writes.
To this end, Loh says the sector could see a cyclical upturn start in the near term should activity in the oil & gas industry strengthen in 2022 and 2023.
The estimate assumes that the variants of Covid-19 are less lethal, that governments are able to deal with Covid-19 as an endemic situation, and that oil prices are not sustained at US$150 per barrel or more which could engender demand destruction, he adds.
Looking ahead, the demand for oil is expected to grow, although forecasts are subjected to the uncertainty from Russia’s invasion of Ukraine.
“Currently, its forecasts are based on global GDP growth of 4.3% in 2022 and 4.0% in 2023, which could be negatively affected should sanctions negatively affect the supply of commodities produced by Russia,” says Loh.
Naturally, the sanctions on Russia will present downside risks to the forecasts for global oil demand.
“Given the enormity of the economic sanctions levelled at Russia for its invasion of Ukraine, the Institute for International Finance last week predicted a 15% contraction in Russia’s GDP in 2022, double the decline from the global financial crisis,” notes the analyst.
“An example of how sanctions can bite is Venezuela’s experience, with the country seeing a 60% contraction in oil demand from 2014 to 2019. Applying this to Russia’s 3.24 million barrels per day (mmbpd) of oil demand in 2020 would result in a contraction of nearly 1.3 mmbpd, thus eliminating over 40% of the EIA’s global oil demand forecast of 3.1 mmbpd for 2022,” he adds.
Loh’s top picks for the sector, Yangzijiang, Keppel Corporation and Sembcorp Marine (SembMarine) have remained unchanged from his previous report.
“Yangzijiang remains inexpensive at an FY2022 P/B of 0.6x and will see margin expansion over the course of the next six months,” he writes.
“Keppel Corp has undemanding valuations and potential positive newsflow regarding the merger or divestment of its O&M business unit; and Sembcorp Marine’s risk-reward appears skewed to the upside post its successful $1.5 billion rights issue in 2021. In addition, the company’s management stated that 2022 will be significantly better than 2021 and we believe there is a high chance that the company will win some meaningful orders this year,” he continues.
Loh has recommended “buy” on Yangzijiang, Keppel Corp and SembMarine with target prices of $1.95, $6.94 and 11 cents respectively.
As at 10.36am, shares in Yangzijiang, Keppel Corp and SembMarine are trading at $1.35, $6.12 and 8.7 cents respectively.
Photo: File photo
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time of esg taggings 0.0894606770016253
https://www.theedgesingapore.com/news/ma/keppel-corp-consortium-acquire-50-stake-cleantechs-asset-company-us115-mil
Keppel Corp, Keppel Asia Infrastructure fund (KAIF) and a co-investor of the fund are acquiring 50% of the interest in Cleantech Solar Asia (CSA) from CEF 200 BV, a fund managed by Climate Fund Managers, for US$115 million.
The acquisition will be made through Cloud Alpha and is expected to close in the first half of 2022.
CSA’s remaining 50% stake is owned by Cleantech Renewable Assets. The consortium previously announced that they were acquiring a 51% stake in Cleantech on December 13, 2021 at a consideration price of US$130 million.
Post-transaction, the consortium’s collective stake in CSA would be 75.5% from 25.5%.
The consideration for the CSA acquisition was reached at a “willing-buyer and willing-seller basis”, taking into account the strategic merits, development pipeline and platform value of CSA as well as synergy with the Cleantech transaction and prevailing market conditions.
The book value and net asset value represented by the CSA shares as at June 31, 2021 was US$58.7 million. Keppel Corp will satisfy its share of the Consideration at US$69 million in cash using internal resources, the company said in a stock exchange filing.
The transaction is not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corp for its FY22 ending Dec 31.
Cleantech is a solar energy platform focused on the commercial and industrial (C&I) segment. It has a strong development pipeline and is targeting to grow its asset portfolio to more than 2.5 GW by 2026, the company said.
CSA is the asset company under Cleantech and currently has a total capacity of over 600 megawatts across various stages of operations, construction and development. Its assets are located across India, Thailand, Malaysia, Indonesia, Cambodia, Singapore and Vietnam.
Keppel Corp CEO Loh Chin Hua said the increased stake in Cleantech’s solar asset portfolio is a testament to its commitment in growing its renewables business as part of Vision 2030.
“Increasing our additional stake in Cleantech’s solar assets, through the acquisition of our stake in CSA, will also increase the Keppel Group’s exposure to Cleantech’s growing solar business and in turn strengthen the ability to create collaboration and synergy opportunities with the rest of the Keppel Group,”
KAIF is managed by a private fund manager under Keppel Capital. Launched in January 2020, the KAIF partnership and its co-investment vehicles have aggregate commitments of around US$1 billion from global institutional investors.
The fund counts Keppel Corp directors Loh Chin Hua, Till Vestring and Veronica Eng as investors.
Shares in Keppel Corp closed 2 cents lower or 0.23% down on March 15 at $6.09.
Photo: Keppel
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time of esg taggings 0.04051693808287382
https://www.theedgesingapore.com/news/company-news/keppel-land-wholly-divest-stake-flemmington-investments-total-us986-mil
Keppel Land Limited, the wholly-owned subsidiary of Keppel Corporation, is divesting its entire stake in Flemmington Investments for a total of US$98.6 million ($134.6 million).
Flemmington Investments holds a 42% stake in a project company which holds the rights to develop a site of approximately 30 hectares located in Ho Chi Minh City, Vietnam.
Of the amount, US$53.1 million is consideration for the sale shares, while the remaining US$45.5 million is for the repayment of shareholder’s loans.
The total consideration will be fully paid in cash upon the completion of the divestment.
The planned divestment is said to be in line with Keppel’s Vision 2030 asset monetisation plans to unlock capital, which can then be used for new growth opportunities.
Including the divestment, Keppel has announced about $3.1 billion asset monetisation since the launch of the programme in September 2020.
Shares in Keppel closed at $6.11 on March 14.
Photo: Keppel
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time of esg taggings 0.03894369304180145
https://www.theedgesingapore.com/news/company-news/keppel-group-signs-mous-sovico-group-units-sustainable-energy-and-urban-solutions
The Keppel Group and Sovico Group, through their respective subsidiaries, have signed two Memoranda of Understanding (MOUs) to collaborate to explore the development and roll-out of energy and environmental solutions, as well as identify, develop, operate and manage smart and sustainable projects in Vietnam’s key gateway cities, starting with Ho Chi Minh City (HCMC) and Hanoi. The MOUs were signed today in the presence of H.E. Nguyễn Xuân Phúc, President of the Socialist Republic of Vietnam, who is on a state visit to Singapore.
Privately held Keppel Infrastructure Holdings through its wholly-owned subsidiary Keppel Energy Ventures, signed an MOU with Sovico Group to harness sustainability-related technologies and develop end-to-end sustainable energy solutions, which include renewables, electrification, energy efficiency as well as the treatment of domestic solid waste, in support of Vietnam’s transition to a green and carbon-neutral economy.
The parties will also collaborate on harnessing the vast renewable energy potential in Vietnam for the development of sustainable fuel for sectors like power, industrial, maritime transportation and aviation, where carbon emissions may be harder to abate. For the aviation sector, the sustainable fuel can be supplied to VietJet Air, which is majority owned by Sovico, for a start, and subsequently rolled out to other airlines. This synergistic development comes on the back of Keppel Infrastructure’s work to explore the feasibility of producing green ammonia in Australia for export to meet the rapidly growing demand for carbon-free energy. Green ammonia can be used as a direct feedstock in green energy generation, or as a hydrogen carrier to provide green hydrogen solutions.
article_here
time of esg taggings 0.023937775054946542
https://www.theedgesingapore.com/news/aviation-engineering/keppel-tt-divests-entire-stake-asia-airfreight-terminal-company-sats-358
Keppel Telecommunications & Transportation Limited (Keppel T&T) is divesting its entire 10% stake in Asia Airfreight Terminal Company Limited (AAT) to SATS for a total cash consideration of HK$207 million ($35.8 million).
The divestment is part of transactions under a sale and purchase agreement (SPA) that was entered into by Keppel T&T, Federal Express Corporation (FedEx), Torres Investments Limited (Torres), SATS and Eastern Option Limited (EOL). FedEx and Torres are the vendors and SATS and EOL are the purchasers.
Under the SPA, Keppel T&T and FedEx will divest their respective stakes in AAT to SATS, while Torres will divest its stake in AAT to SATS and EOL.
article_here
time of esg taggings 0.025262357899919152
https://www.theedgesingapore.com/news/budget-2022/daunting-and-significant-analysts-react-singapores-carbon-tax-rate-hike
Singapore is taking its green agenda “to a new level” with carbon tax hikes in the coming years , writes DBS Group Research senior economist Irvin Seah.
In a Feb 21 note on Budget 2022 , Seah says Singapore’s current carbon tax rate of $5/tonne of carbon emission “pales in comparison to many other economies at similar stage of economic development”.
Sweden, for example, has set its rate at US$119/tonne. while Switzerland levies US$99/tonne. France charges US$45/tonne, while South Korea has set their carbon tax rate at US$33/tonne, writes Seah.
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https://www.theedgesingapore.com/news/new-appointments/hsbc-singapore-appoints-chairman-keppel-reit-manager-first-independent-board
HSBC Bank (Singapore) has appointed Penny Goh as its first independent chairman of its board.
Goh’s appointment is effective on Feb 16.
Goh succeeds outgoing board chair Mervyn Fong, who has served as interim board chair since August 2021.
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https://www.theedgesingapore.com/news/property/keppels-indonesia-subsidiary-faces-land-dispute
Keppel Corp’s subsidiary in Indonesia is sued by an individual over land ownership rights where the International Financial Centre Jakarta Tower 2 building complex is sited.
According to Keppel Corp in an SGX filing on Feb 14, one Raden Saleh Abdul Malik claims that land plots with a total area of some 17,000 sqm belongs to him and not PT Kepland Investama.
Raden is suing for compensation amounting to IDR1.72 trillion ($161.5 million) plus foreclosure of the disputed land plots.
article_here
time of esg taggings 0.025077406084164977
https://www.theedgesingapore.com/news/company-news/sph-given-go-ahead-hold-scheme-meeting-vote-cuscadens-offer
Singapore Press Holdings, which is the target of a bidding tussle, has been granted the go ahead by the court on Feb 14 to hold a meeting for shareholders to decide if they want to accept an offer by Cuscaden Peak.
“As such, the company will continue with its preparations to allow shareholders to consider and vote on the Cuscaden scheme,” states SPH on Feb 14.
Cuscaden Peak, a three-way consortium formed by Hotel Properties, Mapletree Investments and CapitaLand, have tabled an all-cash offer of $2.36 for each SPH share held.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/muted-impact-keppels-arbitration-action-against-sph-focus-sembmarine-merger
Keppel Corporation’s arbitration proceedings against acquisition target Singapore Press Holdings (SPH) may appear contentious, but its impact will be muted, says PhillipCapital Research analyst Terence Chua.
Instead, the arbitration proceedings against SPH will lengthen the overhang on Keppel until a decision is reached. “We expect that Keppel’s stock will remain capped until a final resolution on SPH is announced,” writes Chua.
In a Feb 11 note, Chua is maintaining “buy” on Keppel with an unchanged target price of $7.07.
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time of esg taggings 0.03835646901279688
https://www.theedgesingapore.com/news/ma/offers-sph-path-236-cash-clear-keppels-long-stop-date-lapses
In Greek mythology, Pegasus was a winged horse and Medusa was its mother. The Greek poet Hesiod wrote that Pegasus carried thunderbolts for Zeus.
For some reason, Keppel Corp ’s unit that made an offer for Singapore Press Holdings (SPH) is known as Keppel Pegasus.
It so turns out that on Feb 9, SPH said it had told Keppel Pegasus that it is terminating the Keppel Implementation Agreement with immediate effect.
According to SPH’s announcement on the evening of Feb 9, the Securities Industry Council (SIC) has no objections to SPH’s exercising of the termination right. The longstop date of Feb 2, 2022 has come and gone. “Not all of the Scheme Conditions of the Keppel Implementation Agreement have been satisfied, nor has the Keppel Scheme become effective in accordance with its terms,” SPH announced.
“With the latest SIC ruling, SPH and Cuscaden can move forward expeditiously to table the Cuscaden Offer for SPH Shareholders to vote,” says Christopher Lim, executive director of Hotel Properties and spokesman for Cuscaden Peak, a consortium which has offered $2.36 in cash for SPH shares.
“We have been steadfast in our commitment to deliver a compelling offer to SPH Shareholders and our Implementation Agreement with SPH remains in full force. The Cuscaden Scheme, which offers the optionality of an all-cash consideration or a cash and units consideration, provides an opportunity for SPH Shareholders to crystallise their investment in SPH at superior value,” Lim adds.
This is music to the ears of SPH’s 60,000 retail shareholders who are wondering what has happened to the offers and scheme meetings that were promised back in November and December 2021.
Separately in an earlier announcement on Feb 9, Keppel Pegasus said it had filed a notice of arbitration with the Singapore International Arbitration Centre (SIAC) to commence arbitration proceedings against SPH. This was in response to the letter Keppel Pegasus received from SPH in January 2022, giving written notice of its intention to consult the SIC in relation to the termination of the implementation agreement dated Aug 2, 2021 entered into between Keppel Pegasus and SPH.
On Feb 9, the SIC said it had no objections to SPH terminating the Keppel Implementation Agreement. This paves the way for SPH to call for a scheme meeting to vote on Cuscaden’s offer, which is the highest offer to date.
On Dec 22, 2021, Keppel Pegasus announced that SIC stipulated two clauses in its agreement with SPH “shall have no effect and shall be disregarded”. These are: i) the Keppel Scheme Meeting shall be held prior to any scheme meeting to be held pursuant to any Competing Offer to be implemented by way of a scheme of arrangement, and ii) SPH shall not take any action to hold an Alternative Scheme Meeting within eight weeks from the date of the Keppel Scheme Meeting.
“The decision whether to approve the Keppel Scheme should be a matter that is left to SPH’s shareholders. This is all the more important as the Keppel Scheme will lapse if not all Scheme Conditions (including the approval of the Keppel Scheme by shareholders of SPH) are satisfied by the Cut-Off Date of 2 February 2022,” Keppel said on Dec 22.
Market observers were already wondering if the Keppel scheme would be put up for a vote by the time Keppel made its Dec 22 announcement. In order to meet the long-stop date deadline of Feb 2, Keppel would have needed to get court approval on Jan 3, dispatch the circular by Jan 20, and hold the scheme meeting by Feb 3, past the long-stop date.
During Keppel Corp’s results briefing on Jan 27, group CEO Loh Chin Hua had said: “From the Keppel side, we have completed all that we are required to do, including getting our EGM approval. So, all the conditions on our side have been cleared. I think it is really up to SPH now to call the Scheme Meeting for its shareholders to vote and we would like to see that done, obviously, as quickly as possible.”
Yet, in January, there was a sort of stasis when everything associated with the SPH sale appeared to take a back seat.
In view of the increasingly hawkish comments from the US Federal Reserve, the European Central Bank and (shock, horror) the Bank of Japan, SPH shareholders are hoping to receive cash for their shares as soon as possible.
“Any attempt to delay the Cuscaden Scheme process goes against the interest of SPH Shareholders and deprives them of the opportunity to vote in favour of the Cuscaden Scheme and receiving value in their investments promptly. We are aligned with SPH Shareholders’ interests and will continue to work closely with SPH to ensure that our Offer can be tabled to SPH Shareholders as soon as possible,” Lim says.
Cuscaden has two offers for SPH shareholders. The most popular offer is an all-cash offer of $2.36. The second offer comprises cash of $1.602 in cash, and 0.782 SPH REIT unit for every SPH share. Keppel’s offer was for $0.868 in cash, 0.782 SPH REIT and 0.596 Keppel REIT.
“The termination of the Keppel Scheme paves the way for a clearer and more straightforward privatisation and voting process for shareholders to vote on the more superior Cuscaden offer,” CGS-CIMB says in an update.
And finally, that vote should be fast approaching as Pegasus flies away.
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time of esg taggings 0.03606069600209594
https://www.theedgesingapore.com/capital/brokers-calls/keppels-share-price-could-see-knee-jerk-reaction-termination-keppel-scheme
CGS-CIMB Research analysts Lim Siew Khee and Eing Kar Mei see Singapore Press Holdings’ (SPH) termination of the Keppel Scheme as paving the way for a clearer and more straight-forward privatisation process.
This allows for shareholders to vote on the more superior Cuscaden offer, write the analysts in their Feb 10 note.
“We have already expected its deal to take SPH private to be off since the intervention by Cuscaden in November 2021,” they add.
article_here
time of esg taggings 0.05081178084947169
https://www.theedgesingapore.com/capital/insider-moves/keppel-corp-starts-500-mil-buyback-mandate-grand-banks-yachts-shareholder
Keppel Corp announced on Jan 27 that it will be spending up to $500 million to buy back shares on the open market. The buyback started the following day and has continued steadily since then, at ever bigger quantities and higher prices as well.
On Jan 28 and Jan 31, the company acquired 56,8000 shares at $5.56 each, and 430,800 shares for $5.64–$5.65 each respectively. On Feb 3 and 4, it acquired 490,000 shares for $5.69–$5.71 each, and 180,000 shares for $5.77–$5.79 each respectively.
On Feb 7, 8 and 9, it acquired nearly 1.3 million shares at $5.84–$5.92 each; nearly 2.2 million shares at $5.94–$6.03 each; and 1.28 million shares at $6.03–$6.08 each respectively. With these acquisitions, Keppel has bought back a total of nearly 6.4 million shares of the 36.4 million allowed under its current mandate.
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time of esg taggings 0.025309195974841714
https://www.theedgesingapore.com/news/company-news/keppel-set-commence-arbitration-proceedings-against-sph
Keppel Corp has commenced arbitration proceedings against Singapore Press Holdings (SPH) for trying to walk away from its takeover offer of the property company.
Keppel, via subsidiary Keppel Pegasus, had offered to takeover SPH last August. Just when most market watchers thought the deal was done, a consortium, Cuscaden Peak, made up of Hotel Properties, Mapletree and CLA Real Estate Holdings tabled a more attractive offer in October.
Both parties, with ties to Temasek Holdings, sweetened their respective offers since then but Cuscaden's, as it stands, still tops Keppel's.
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time of esg taggings 0.02436264092102647
https://www.theedgesingapore.com/news/contracts/keppel-offshore-marine-secures-250-million-contracts-repeat-customers-through-wholly
Keppel Shipyard – the wholly-owned subsidiary of Keppel Offshore & Marine – has been awarded contracts amounting to around $250 million from repeat customers.
These are for the conversion of a Floating Storage and Regasification Unit (FSRU), integration of a Floating Production Storage and Offloading (FPSO) vessel and the jumboisation of two Trailing Suction Hopper Dredgers (TSHD).
For instance, the FSRU, when completed, will be deployed in waters some 17 km southwest of the Port of Alexandroupolis, Northern Greece. It will have an overall annual delivery capacity of around 5.5 billion cubic metres, along with a peak send out of 22 million cubic metres per day.
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time of esg taggings 0.025999242207035422
https://www.theedgesingapore.com/news/ma/keppel-infrastructure-trust-invest-us250-mil-alongside-investors-aramco-gas-pipelines
Keppel Infrastructure Trust (KIT) says it is seeking to invest in Aramco Gas Pipelines Company, an entity with cash flows derived from the gas pipelines network of Saudi Arabian Oil Company (Aramco).
KIT, on Feb 8, had entered into a subscription agreement as well as a limited partnership agreement to invest in Aramco’s gas pipelines business, Aramco Gas Pipelines Company.
Aramco Gas Pipelines Company is a newly-formed subsidiary of Aramco, which is one of the world’s largest integrated energy and chemicals companies.
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time of esg taggings 0.04483761009760201
https://www.theedgesingapore.com/capital/new-appointments/keppel-corp-names-inaugural-chief-digital-officer-and-chief-sustainability
Keppel Corporation has created two leadership positions to sharpen the group’s focus on digital transformation and sustainability.
The move – will the see the appointment of Manjot Singh Mann as chief digital officer (CDO) and Ho Tong Yen as chief sustainability officer (CSO).
As part of his role as CDO, Mann – who has been the CEO and director of telco M1 since 2018 – will lead the group’s digital strategy.
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time of esg taggings 0.04520115093328059
https://www.theedgesingapore.com/capital/brokers-calls/analysts-keppel-pacific-oak-us-reit-steady-performance
Analysts from DBS Group Research and RHB Group Research are keeping “buy” on Keppel Pacific Oak US REIT (KORE) after the REIT saw distribution per unit (DPU) for the FY2021 ended December grow by 1.8% y-o-y to 6.34 US cents (8.53 cents).
DPU for the 4QFY2021 also increased by 2.6% y-o-y to 1.60 US cents.
The higher DPUs were due to the REIT’s newly-acquired assets in the 2HFY2021, and are in line with the estimates by DBS analysts, Rachel Tan, Geraldine Wong, Dale Lai and Derek Tan.
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time of esg taggings 0.04667029203847051
https://www.theedgesingapore.com/news/sustainability/keppel-electric-launches-green-electricity-retail-plan-residential-customers
Keppel Electric has launched a new green electricity retail plan for residential customers.
Named ecoGreen, the introductory price of the ecoGreen plan is currently lower than the national electricity tariff, says Keppel Electric in a Feb 4 press release.
Under the ecoGreen plan, internationally recognised Renewable Energy Certificates (RECs) from Singapore will be retired annually for ecoGreen plan customers, thus certifying that the units of electricity consumed are generated from renewable energy sources, says Keppel Electric.
article_here
time of esg taggings 0.02487897197715938
https://www.theedgesingapore.com/capital/brokers-calls/out-red-fy2021-all-stars-aligned-keppel-corp-though-sph-deal-remains-unclear
Keppel Corporation ’s 2HFY2021 results blew past expectations, says PhillipCapital Research analyst Terence Chua. FY2021 net profit of $1.01 billion was ahead of his forecasts by 63.7% and a reversal of the $508 million loss in FY2020.
The surprise came from fair value gains from its investments in new technology and start-ups, says Chua. In a Jan 31 note, Chua is maintaining “buy” on Keppel Corporation with an unchanged target price of $7.07, which represents an upside of 31.2%.
The group also announced on Jan 27 a $500 million share buyback program and 21 cents final dividend, bringing full year dividend to 33 cents.
article_here
time of esg taggings 0.04890474700368941
https://www.theedgesingapore.com/capital/results/keppel-corp-reverses-loss-reports-net-profit-102-bil-fy2021
Keppel Corporation has reported earnings of $1.02 billion in the FY2021 ended December, bolstered by improved performance across all business segments.
This is Keppel’s highest earnings achieved in the past six years since the offshore & marine (O&M) downturn, and marks a sharp reversal of FY2020’s net loss of $505.9 million.
Keppel is proposing a final cash dividend of 21 cents per share. This brings Keppel’s total FY2021 distribution to 33 cents per share, more than triple the 10 cents per share for FY2020.
article_here
time of esg taggings 0.025057225953787565
https://www.theedgesingapore.com/news/buybacks/keppel-corp-announces-500-mil-share-buyback
Keppel Corporation Limited (Keppel) has established a $500 million share buyback programme, pursuant to the share purchase mandate granted by its shareholders at the company’s annual general meeting (AGM).
Keppel’s share purchase mandate, as approved by shareholders at the last AGM in April 2021, allows the purchase of up to a maximum of 2% of its issued shares for the duration of the mandate.
The $500 million programme could take more than a year to be completed, says Keppel in a Jan 27 press release.
article_here
time of esg taggings 0.02443129289895296
https://www.theedgesingapore.com/capital/brokers-calls/analysts-largely-positive-keppel-reit-likely-recovery-office-sector
Analysts from DBS Group Research, Maybank Securities and RHB Group Research are mostly positive on Keppel REIT after it posted its results for the FY2021 on Jan 25 .
For the FY2021 ended December, Keppel REIT reported a distribution per unit (DPU) of 5.82 cents, up 1.6% y-o-y. In the 2HFY2021, the REIT’s DPU fell 1.7% y-o-y to 2.88 cents.
The higher total FY distribution is attributed to accretive acquisitions made in Melbourne and Sydney, as well as Singapore’s Keppel Bay Tower.
article_here
time of esg taggings 0.02488029096275568
https://www.theedgesingapore.com/capital/results/keppel-pacific-oak-us-reit-posts-18-increase-fy2021-dpu-634-us-cents
Keppel Pacific Oak US REIT (KORE) has delivered a DPU of 6.34 US cents for the FY2021 ended December 2021 period, representing a 1.8% increase from 6.23 US cents in FY2020.
Income available for distribution increased by 6.5% y-o-y to US$62.4 million ($83.9 million) from US$58.6 million a year ago.
This came on the back of a 1.2% growth in revenue to US$141.3 million from US$139.6 million, largely due to contributions from 105 Edgeview and Bridge Crossing.
article_here
time of esg taggings 0.024414069950580597
https://www.theedgesingapore.com/capital/results/keppel-infrastructure-trust-posts-16-growth-fy2021-dpu-378-cents
Keppel Infrastructure Trust (KIT) announced that its DPU for FY2021 ended December 2021 came in at 3.78 cents, a first-time increase of 1.6% from the annual payout of 3.73 cents since 2016.
On the back of this, the group achieved a 5.1% y-o-y increase in revenue to $1.6 billion, compared to $1.5 billion in the previous year, largely driven by higher contribution from City Energy and Ixom.
Overall, the group saw an increase in costs and expenses, which includes a 33.9% y-o-y increase in fuel and electricity cost to $135.6 million, a 15.7% increase in staff costs to $165.2 million and a 10.6% increase in other operating expenses to $108.6 million.
article_here
time of esg taggings 0.040712855057790875
https://www.theedgesingapore.com/capital/deals-joint-ventures-alliances/keppel-infrastructure-ies-and-envision-ink-mou-offer
Keppel Infrastructure Holdings (KI), a wholly-owned subsidiary of Keppel Corporation, announced that it has signed a memorandum of understanding (MOU) to collaborate with Impact Electrons Siam (IES) and Envision Group on the development and supply of low-carbon electricity, storage and intermittency management solutions, as well as the pursuit of opportunities in Asean grid interconnectivity.
Leveraging the strengths of KI, with a track record of developing and operating large-scale sustainable energy infrastructure end-to-end, Envision, as a global green technology leader, and IES, as a leading renewable energy solutions provider in the Asia Pacific, the MOU seeks for the three partners to innovate and bring reliable and competitive renewable energy solutions to end-users in Asean, one of the world’s fastest growing regions.
The MOU seeks to support the aspiration that Asean member nations have set - a target of 23% of renewable energy in total primary energy supply by 2025. This MOU will see also all three parties leverage IES’s exclusive development rights issued by the Government of Lao PDR to increase the capacity of the current 600MW monsoon wind power project, which IES is developing in the Sekong and Attapeu provinces in Laos, by an additional 1,000MW.
article_here
time of esg taggings 0.042741941986605525
https://www.theedgesingapore.com/capital/offshore-marine/yangzijiang-keppel-corp-and-sembmarine-uob-kay-hians-top-picks-overweight-om
UOB Kay Hian analyst Adrian Loh has maintained “overweight” on the offshore and marine (O&M) sector as he sees the sector moving “onwards and upwards”.
“The rig market appears to have turned a corner in 2021 with oil prices exceeding US$80 ($107.50) per barrel – this has resulted in stronger rig utilisation rates and a firming of rig dayrates vs 2020,” writes Loh in his Jan 14 report.
“The higher offshore activity expected in 2022 and 2023 underpins our positive view on the sector, especially given that meaningful rig supply was removed globally,” he adds.
article_here
https://www.theedgesingapore.com/capital/results/keppel-reit-reports-2hfy2021-dpu-288-cents
Keppel REIT has reported a distribution per unit of 2.88 cents for 2HFY2021, down 1.7% y-o-y. Full year DPU, meanwhile, was up 1.6% y-o-y to 5.82 cents.
Net property income attributable to unitholders for the six months ended Dec 2021 was $79.9 million, up 17.5% y-o-y. Property income for the same period was $110.8 million, up 16.9% y-o-y.
Keppel REIT attributes the higher distribution in FY2021 to accretive acquisitions namely the Victoria Police Centre in Melbourne and Pinnacle Office Park in Sydney in 2020, and Keppel Bay Tower in Singapore in May 2021.
article_here
time of esg taggings 0.024946175049990416
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-keppel-dc-reit-trimmed-tps
CGS-CIMB and DBS Group Research analysts observe upbeat FY2021 earnings reported by Keppel DC REIT (KDC), driven by acquisitions, AEIs, and higher occupancy rate.
However, for CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee, they’ve lowered their target price on this stock to $2.70 from $2.78 previously, to take into account higher cost of equity assumptions in view of the increasing interest rate environment.
The analysts, who are keeping their “add” call on KDC, noted that its FY2021 revenue increased 2.1% y-o-y to $271.1 million, driven by asset enhancement initiative contributions from Dublin and Singapore assets, full-year contribution from Kelsterbach and Amsterdam DC, as well as the acquisitions of Eindhoven and Guangdong DC.
article_here
time of esg taggings 0.025181700941175222
https://www.theedgesingapore.com/capital/results/keppel-dc-reit-reports-2hfy2021-dpu-4927-cents-28-y-o-y
Keppel DC REIT has reported a distribution per unit of 4.927 cents, up 2.8% y-o-y for 2HFY2021 ended Dec 2021. Distributable income for the same period was up 6.6% y-o-y to $87.4 million, on the back of a 4% y-o-y dip in revenue to $135.9 million.
The higher income can be attributed to contributions from new acquisitions such as the Kelsterbach Data Centre in Germany (May 2020), Amsterdam Data Centre (December 2020) and Eindhoven Campus (September 2021) in the Netherlands.
In addition, the completion of Intellicentre 3 East Data Centre (IC3 East DC) development at Intellicentre Campus in Sydney, Australia in July 2021; as well as the completion of asset enhancement initiatives at data centres in Dublin and Singapore in 1Q 2021 helped too.
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time of esg taggings 0.024473690893501043
https://www.theedgesingapore.com/news/property/keppel-land-jv-acquire-three-residential-sites-hanoi-1597-million
Keppel Land Vietnam and Keppel Vietnam Fund, have acquired three residential plots in Hanoi for $159.7 million as part of a joint venture with regular local partner Phu Long Real Estates.
This also marks the first acquisition of KVF since the fund achieved its first close of US$400 million.
The three sites acquired cover a total area of 14.2 hectares. A total of 1020 condo units and 240 landed homes are planned.
article_here
time of esg taggings 0.020217240089550614
https://www.theedgesingapore.com/news/company-news/asian-infrastructure-investment-bank-joins-keppel-data-centre-fund-ii-investor
Keppel Capital Holdings has secured Asian Infrastructure Investment Bank (AIIB), as an investor for the Keppel Data Centre Fund II (KDC Fund II) on Jan 21.
In addition, the bank achieved a closing with a total of US$1.1 billion ($1.48 billion) of total commitments, including co-investment capital for the fund.
AIIB is a 104-member multilateral development bank that seeks to improve economic and social outcomes in Asia.
article_here
time of esg taggings 0.02479046117514372
https://www.theedgesingapore.com/capital/brokers-calls/mermaid-maritime-gets-buy-kgi-following-higher-oil-prices
KGI Research Singapore has reiterated its “buy” call on the Thailand-based Mermaid Maritime, at a target price of 8.4 cents.
The move comes as the company goes “back to the good old days,” the analysts write in a Mar 7 note.
Mermaid Maritime provides drilling and sub-sea engineering services for the offshore & marine industry. Key clients under its subsea engineering segment are based in Southeast Asia and the Middle East.
KGI’s analysts say that the company stands to benefit from a surge in Brent oil prices to almost US$120 ($163.66) on Mar 6. The WTI similarly scaled to US$116 as the effects of the international sanctions thwarted global supply chains.
“Brent is now trading at levels when oil companies were partying like there’s no tomorrow,” the analysts note.
Despite the high oil prices, the Organization for Petroleum Exporting Countries+ (OPEC+) announced that it will raise output – as anticipated – by 40,000 barrels per days.
Only Saudi Arabia and the UAE have the spare capacity to supply even more barrels of oil, had the group wanted to further raise output levels.
Still, the announcement “will not have much impact on the current supply/demand dynamic,” says KGI’s analysts.
For now, oil and gas exploration and production companies have been among the first to rally in a commodity bull cycle, they add.
For instance, players like Rex International and RH PetroGas have “surged by between 30% and 85% over the past month,” the analysts observe.
Meanwhile, downstream companies like Mermaid Maritime and Sembcorp Marine have just started to react to the higher oil prices.
“With oil prices back at where they were trading during the good old days, lagging oil companies should start to follow their upstream peers,” KGI’s analysts assert.
As at 9.31am on Mar 7, shares in Mermaid Maritime were up 0.5 cents or 6.10% to trade at 8.7 cents.
Cover image: Mermaid Maritime
article_here
time of esg taggings 0.02636269200593233
https://www.theedgesingapore.com/capital/results/sembcorp-marine-sees-2hfy2021-loss-deepen-341-5233-mil
Sembcorp Marine (SembMarine) has reported a deeper net loss of $523.3 million for the 2HFY2021 ended December, 34.1% higher than the net loss of $390.4 million.
This brings FY2021’s loss wider to $1.17 billion from the loss of $582.5 million in the FY2020. This was mainly due to the push-out of delivery for its ongoing projects, with significantly higher provisions for manpower and other costs to complete most of the projects during the year and over the next six to nine months. The total net loss took into account cost provisions of $839 million.
Excluding the provisions, FY2021 would’ve seen a net loss of $332 million, an improve of 24% compared to FY2020’s net loss of $439 million.
Loss per share for the 2HFY2021 and FY2021 stood at 2.27 cents and 6.49 cents respectively.
“While we managed to reduce our second half losses compared to the first half, our financial results for the full year reflected the continuing impact of the pandemic which accounted for the significantly higher provisions for manpower and other costs to complete our projects,” says president and CEO Wong Weng Sun at SembMarine’s results briefing.
The pandemic may have been challenging for the group, but it has “given us the impetus to find solutions, new way to approach issues and take concrete steps to address each evolving challenge. We took active measures, worked in even tighter cooperation with our customers and found a new rhythm to manage the pandemic and our operation. The labour shortage situation also stabilised during the fourth quarter to enable smoother execution of projects,” Wong adds.
2HFY2021 revenue improved by 68.5% y-o-y to $1.02 billion mainly due to higher revenue recognition from rigs & floaters and offshore platform projects.
However, 2HFY2021 saw a gross loss of $494.1 million, 67% y-o-y more than the gross loss of $295.9 million in the 2HFY2020 as Covid-19 disruptions caused further delays and increase in manpower and other related costs to complete existing projects.
As at end-December, cash and cash equivalents stood at $1.1 billion, mainly due to the net proceeds from its rights issue.
In FY2021 and year-to-date 2022, SembMarine successfully delivered four major projects, including the newbuild floating production unit (FPU) for the Vito Regional Production Facility (RPF) for Shell Offshore Inc.
As at end-December, the group has a total of 16 key projects under execution with 12 slated for completion in 2022.
In its outlook statement, SembMarine says the industry outlook for the oil & gas, renewables and other green solutions will continue to improve.
“It is important for the group to convert its orders pipeline into firm contracts on a timely basis in FY2022,” it says.
It adds that it expects its financial performance in FY2022 to be “significantly better” compared to its figures in FY2021.
Shares in SembMarine closed 0.1 cent higher or 1.19% up at 8.5 cents on Feb 25.
Photo: Bloomberg
article_here
time of esg taggings 0.031871018931269646
https://www.theedgesingapore.com/news/company-news/oue-lippo-healthcares-prince-bay-hospital-secures-70-mil-loan
Le Kang Assets (Shenzhen), an associated company of SGX-listed OUE Lippo Healthcare (OUELH), has entered into a loan agreement with the Bank of China (BoC) for the grant of a RMB330 million ($70 million) loan on March 28.
The loan will be used for the construction and renovation of Prince Bay Hospital.
According to the SGX filing, the development of the hospital is progressing as planned. Its main structural construction is slated to be completed in the first half of 2022.
The hospital is expected to be commissioned in 2024 to serve the affluent residents in the Guangdong-Hong Kong-Macao Greater Bay Area.
Upon its opening, Prince Bay Hospital will have over 200 beds, and is set to benefit from the growth of the medical tourism industry within the Greater Bay Area.
Le Kang Assets is a joint venture company (JVCo) that is indirectly owned by China Merchants Lippo Hospital Management (Shenzhen) Limited, the OUE Lippo Healthcare’s joint venture company with independent third-party, China Merchants Shekou Industrial Zone Holdings Co., Ltd.
The JVCo holds the land and property of the hospital, which is located in Shenzhen, China.
“The loan is a significant milestone for the company as it reduces our total funding commitment and we can deploy our financial resources to other growth opportunities. It is also a reflection of the confidence of Bank of China, as the lender, on the future prospects of Prince Bay Hospital,” says Yet Kum Meng, CEO of OUELH.
According to OUELH, the loan is in line with its ongoing initiatives to bolster its financial position as part of its roadmap to enhance its capital structure.
The loan will have no impact on OUELH’s gearing as the borrower is the JVCo. The loan is also secured on the JVCo’s shares and the land and property of Prince Bay Hospital.
Shares in OUELH closed flat at 3.5 cents on March 28.
article_here
time of esg taggings 0.027138955891132355
https://www.theedgesingapore.com/capital/insider-moves/oue-buys-back-shares-steadily-eurosports-global-does-it-sporadically
Property group OUE has been buying back its shares at a steady pace. The most recent transaction was on March 21 when it acquired 10,000 shares on the open market at $1.29 each. This brings the total number of shares bought back under the current mandate to 8.09 million units.
Prior to March 21, OUE was buying back shares almost every other day since the start of the month. These range from as much as 92,400 shares on March 1 at $1.2916 each to as low as 10,000 shares on several other days. The prices OUE paid were kept within a tight range of around $1.29.
The company’s share price has been persistently trading at a very steep discount to its net asset value of $4.41 as at Dec 31, 2021, slightly higher than $4.24 as at Dec 31, 2020.
article_here
time of esg taggings 0.025173240108415484
https://www.theedgesingapore.com/capital/results/oue-reverses-black-it-reports-earnings-509-mil-2hfy2021-higher-adjusted-ebit
OUE Limited has reported earnings of $50.9 million for the 2HFY2021 ended December, reversing from losses of $136.2 million in the corresponding period the year before.
In the FY2021, the group logged earnings of $80.9 million from losses of $343.4 million in the FY2020.
The earnings were due to higher adjusted EBIT, lower share of fair value losses on investment properties and mark-to-market fair value gains on investments designated at fair value. This was partly offset by higher impairment losses recognised on property, plant and equipment during the year.
article_here
time of esg taggings 0.026552702067419887
https://www.theedgesingapore.com/capital/results/oue-c-reit-pay-2hfy2021-distribution-137-cents-unit-down-42-y-o-y
OUE Commercial REIT has declared a distribution per unit of 1.37 cents for 2HFY2021 ended Dec 2021, down 4.2% y-o-y. This brings its full year DPU to 2.6 cents, up 7% y-o-y.
For the same period, it reported net property income of $95.2 million, down 20.3% y-o-y, on the back of a 22.4% y-o-y drop in revenue to $116.3 million.
The drop was attributed to OUE C-REIT’s divestment of its 50% stake in OUE Bayfront (picture) on March 31 2021.
article_here
time of esg taggings 0.02407947089523077
https://www.theedgesingapore.com/capital/results/yeos-narrows-fy2021-losses-71-29-mil-declares-final-dividend-2-cents
It seems that F&B manufacturer Yeo Hiap Seng (Yeo’s) is on its way to recovery. For the FY2021 ended December 2021, Yeo’s recorded a loss of $2.9 million, compared to a loss of $10.0 million in FY2020. The group attributes this to its continuous drive for positive momentum in its F&B revenue with a strong focus on its profit margin.
This was supported by a 5.0% y-o-y increase in revenue to $337.9 million from $321.8 million a year ago, while gross profit margin increased to 29.7% from 28.4%, led by higher contribution from the group’s consumer F&B products.
Among the countries that the group has its business in, Malaysia is the group’s largest revenue contributor, followed by Singapore and other Asia Pacific countries. The group attributes its increase in revenue to the recovery of its markets, especially Malaysia, Mainland China, Indonesia and Europe, all of which recorded double-digit increments to revenues.
article_here
time of esg taggings 0.027525536017492414
https://www.theedgesingapore.com/capital/results/straits-tradings-revenue-grew-28-strong-tin-mining-and-smelting-growth
Straits Trading Co’s revenue rose by 28.4% y-o-y to $396.5 million, supported by largely by rising revenues from tin mining and smelting, and to a lesser extent from property. Patmi surged by 4x to $234.2 million on the back of fair value gains. The Patmi surge belies the company’s cash flow. Although operating cash flow turned positive at $40 million in FY2021, from negative operating cash flow of $37.3 million in 2020, Straits Trading’s free cash flow position remained negative for the second consecutive year.
article_here
time of esg taggings 0.025392092997208238
https://www.theedgesingapore.com/news/property/straits-trading-company-acquires-two-melbourne-properties-1439-mil
Straits Real Estate, the wholly-owned subsidiary of Straits Trading Company has acquired two freehold office buildings in Australia for an approximate consideration of A$150.0 million ($143.9 million).
On Feb 11, the group announced that CH Holdings Unit Trust, indirect subsidiary of Straits Real Estate, has entered into sale and purchase agreements (SPA) with Digital Harbour Holdings to acquire 1010 La Trobe Street (1010 La Trobe) and 192 Harbour Esplanade (Innovation Building) together with 163 parking bays at Docklands, Victoria.
1010 La Trobe is a nine-storey freehold Grade A office building with a net lettable area (NLA) of 15,354 sqm. It is currently 100% occupied. The Department of Home Affairs and Victoria Rail Track are the office’s key tenants. The property offers uninterrupted views towards nearby Marvel Stadium and the Docklands marina.
article_here
time of esg taggings 0.025596147868782282
https://www.theedgesingapore.com/news/company-news/straits-trading-company-launches-private-placement-raise-809-mil
The Straits Trading Company plans to place out $80.86 million worth of new shares, to improve liquidity and to raise funds for potential acquisitions, among other purposes.
The company will be placing a total of 26 million new shares at $3.11 each, which is a discount of around 8.9% off the volume weighted average price (VWAP) of $3.4126 for all trades conducted on Jan 13, just before a trading halt was called on the morning of Jan 14.
According to Straits Trading in its Jan 18 announcement, the placement, which represents some 6.39% of its total issued shares, is meant to address the low trading liquidity of the company's shares.
article_here
time of esg taggings 0.05197183019481599
https://www.theedgesingapore.com/capital/brokers-calls/straits-trading-company-scaling-new-heights-says-rhb
RHB Group Research analyst Vijay Natarajan is highly positive on The Straits Trading Company’s prospects, as he deems it is on its way to “scaling new heights”.
The Straits Trading Company is a group that has interests in real estate and resources with a portfolio of stable recurring income-producing assets that has value-add and growth potential.
These assets have also delivered stable returns over the years, he notes.
article_here
time of esg taggings 0.037336074048653245
https://www.theedgesingapore.com/news/new-appointments/sbs-transit-appoints-ceos-bus-business-and-rail-services-segments
SBS Transit has appointed Lim Tien Hock to its newly created role of CEO of its Bus Business arm, as part of a series of leadership changes that kicked off on April 1.
The 50-year-old – who was formerly the CEO of ComfortDelGro Driving Centre and ComfortDelGro Medcare – was offered this role based on his “personal attributes, qualifications and experience in the transportation business,” the company announced in a regulatory filing.
Lim is also said to be experienced in management, people and talent development as well as in strengthening tripartite labour-management-union relationships.
In another move, Jeffrey Sim has been appointed CEO of the Rail Business arm.
The 45-year-old has been SBS Transit since 2015 and has played a key role in achieving high levels of reliability in the provision of train services under the Downtown Line (DTL), North East Line (NEL) and Sengkang Punggol LRT (SPLRT).
Both Lim and Sim will report directly to Cheng Siak Kian, SBS Transit’s recently appointed group CEO.
Aside from this, SBS Transit has also appointed Anthony Mok as the head of its NEL and SPLRT services. He has nearly 20 years of experience in railway operations and has previously been heavily involved in the start-up of the NEL.
Shares in SBS Transit closed down 2 cents or 0.67% at $2.97 before the announcement on Apr 1.
Cover image: SBS Transit
article_here
time of esg taggings 0.02971165394410491
https://www.theedgesingapore.com/news/new-appointments/sbs-transit-ceo-comfortdelgros-new-group-deputy-ceo
ComfortDelGro has appointed Cheng Siak Kian to its newly created position of group deputy CEO as part of a series of leadership changes aimed at preparing the group for its next stage of growth.
Cheng, who is also the CEO of the company’s listed subsidiary SBS Transit, will concurrently hold both positions with immediate effect.
In his new role, Cheng will work closely with ComfortDelGro’s managing director and group CEO Yang Ban Seng to align the management around the strategic objectives of the ComfortDelGro Group. Particularly, he will help focus on the group’s overseas businesses and global expansion strategy, the company said in a statement.
On top of his new ComfortDelGro appointment, Cheng will also assume the position of executive deputy chairman and CEO of SBS Transit, replacing Yang who is not seeking re-election at the upcoming SBS Transit Annual General Meeting (AGM) on April 28.
Consequent to this change, SBS Transit will likewise make an announcement on other changes after the AGM.
Cheng joined SBS Transit in September 2015 as a senior vice president in the bus operations division. During his time there, he was an integral member of the tender team that was successful in its bid for the Seletar Bus Package, which was a first for the company.
In September 2016, Cheng was posted to Australia to helm the group’s New South Wales operations. He played an instrumental role in several business acquisitions, and moved the company into new areas such as non-emergency patient transportation and expanded its footprint to new states such as the Northern Territory and Queensland.
Share in ComfortDelGro closed 4 cents higher or 2.94% up on March 16 at $1.40.
Photo: Albert Chua/The Edge Singapore
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time of esg taggings 0.027270940830931067
https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-optimistic-sbs-transits-post-covid-19-prospects
CGS-CIMB Research is keeping its “add” call on SBS Transit but with a slightly lowered target price of $3.40 from $3.50 previously. The research house is optimistic on SBS’ recovery prospects as Singapore moves towards an endemic.
In its latest FY2021 ended December 2021 results, SBS reported earnings of $51.6 million, some 34.6% lower y-o-y, despite revenue increasing 6.5% to $1.31 billion.
Full year operating loss, excluding government relief, has been reduced from $29.8 million for FY2020 to just $2.77 million for FY2021.
SBS proposed a final dividend of 2.45 cents, which brough full year payout to 8.2 cents.
See: SBS Transit reduces operating loss, proposes final dividend of 2.45 cents
Reversing a one-time write-off of $15.8 million due to an early replacement of buses as part of revised framework agreement with Land Transport Authority (LTA), SBS’ FY2021 core net profit came in at $67.4 million, some 15% lower y-o-y. This came in above CGS-CIMB’s expectations at 114% and consensus’ forecast of 119%.
In a Feb 25 report, analyst Ong Khang Chuen says, “The key surprise was higher government reliefs – SBS received another $7.8 million in 4QFY2021 (without which results would be in line with forecasts). Core 4QFY2021 Ebit (excluding government relief) rose to $9.3 million on higher ridership nearer end-2021.”
To that end, Ong expects rail ridership to recover to 85% of pre-Covid levels by end-FY2022, increasing from 68% in January 2022, as Singapore’s economy reopens further.
Despite the recent rise in Covid-19 cases, the Singapore government remains committed to “living with Covid-19”. Finance Minister Lawrence Wong said the government is aiming to take further significant steps to ease Covid-19 restrictions after passing the peak of the current wave, which can happen in the coming weeks.
“That said, with hybrid work arrangements increasingly prevalent, we think it is unlikely ridership will return to pre-Covid levels in the near future. We forecast ridership to return to 90%/92% of pre-Covid levels by FY2023/2024,” says Ong.
Meanwhile, the analyst believes that the new framework agreement with LTA will be a net positive for the group in FY2022, helping to partially offset the impact of the absence of Jobs Support Scheme support. Under the new agreement effective Jan 2022, SBS’ Downtown Line (DTL) has undergone a license charge structure change, which Ong estimates will help lower SBS’ rail segment losses by at least $30 million per annum from FY2022 onwards.
On the other hand, the lower service fee for renewed bus contracts will only be effective from September 2022 onwards.
Meanwhile, DBS Group Research is keeping its "hold" call on SBS Transit, also with a slightly lower target price of $3.28 from $3.39.
In his March 3 report, analyst Woon Bing Yong sees his current target price as valuing the transport operator fairly at a 10-year mean P/B of 1.74x.
"We used a 10-year period to adjust for a short-lived spike in SBS’s share price in 2019. In addition, SBS trades at an FY2022 P/E of 21x, which represents SBS's 10-year mean forward P/E," he writes.
Given the uncertainty of the Covid-19 situation as well as possible structural trends depressing rail ridership, Woon says he is more cautious on the counter compared to his peers.
To him, the extent in SBS's rail ridership remains uncertain.
In FY2021, SBS saw total average daily rail ridership of 744,000 across its train lines, down 39% from the 1.22 million average daily rail ridership in FY2019.
"Even as Singapore reopens, ridership could take time to recover to pre-pandemic levels, as light restrictions remain in place and structural changes such as flexible working are implemented. As such, we have projected the average daily rail ridership to increase to 896,000 in FY2022, which remains depressed when compared to FY2019," writes Woon.
Unlike CGS-CIMB's Ong, DBS's Woon sees SBS's new framework agreement with LTA as stable but may slow the operator's future growth.
"The lower service fee from the new bus packages may be offset by a revamp in the licence charge previously paid for the Downtown Line. That said, future rail EBIT above a 5% EBIT margin will now be mostly shared with the LTA through the EBIT cap and collar mechanism. Still, we do not expect the group to exceed this margin in the near future," he says.
As at 11.30am, shares in SBS are trading at $2.91 or 1.42x FY2022 earnings with a dividend yield of 3.92%.
article_here
time of esg taggings 0.05679521197453141
https://www.theedgesingapore.com/capital/results/sbs-transit-reduces-operating-loss-proposes-final-dividend-245-cents
SBS Transit has reported earnings of $15.2 million for 2HFY2021, down 67.3% y-o-y.
If $21.7 million worth of government relief is excluded, the bus and train operator’s operating loss would be $6.3 million, versus $441,000 incurred for the year earlier 2HFY2020.
Revenue for 2HFY2021 was up 6.7% to $607 million.
article_here
time of esg taggings 0.02390455291606486
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-genting-singapore-raffles-medical-group-sasseur-reit
Genting Singapore
Price target:
DBS Group Research “buy” $1
article_here
time of esg taggings 0.023866473929956555
https://www.theedgesingapore.com/capital/results/genting-singapore-reports-2hfy2021-earnings-951-mil-maintains-dividend-one-cent
Genting Singapore has reported earnings of $95.1 million for 2HFY2021 ended Dec 2021, down 49% y-o-y.
Revenue in the same period was down 17% y-o-y to $512.5 million, as the resort operator was hit by lower visitor numbers amid a resurgence in Covid-19 cases.
“A series of enhanced safe management measures, such as the reduction in group size for social gathering and prohibition of dining-in at food and beverage (F&B) establishments, were introduced to contain the spread of the virus,” states Genting Singapore.
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time of esg taggings 0.024856647942215204
https://www.theedgesingapore.com/capital/brokers-calls/marina-bay-sands-4q-numbers-likely-troughed-inspires-maybank-call-hold-genting
Maybank Securities analyst Yin Shao Yang has kept his “hold” call on Genting Singapore, on expectations that rival Marina Bay Sands’ recently reported quarterly numbers is a “good portent” that Genting Singapore’s own earnings, yet to be reported, have troughed.
In his Jan 27 report, Yin notes that MBS has reported improved q-o-q numbers, despite higher numbers of new Covid-19 cases.
“By extension, we hope Genting Singapore will report similar trends in its upcoming 4Q21 results on 17 Feb 2022,” says Yin, who has a price target of 83 cents on the stock. He does not have a call on Las Vegas Sands, the US-listed parent company of MBS.
article_here
time of esg taggings 0.055623295949772
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-genting-singapore-nanofilm-technologies-sgx-kimly-digital-core
Genting Singapore Price target: Maybank Securities “hold” 83 cents
‘Grey clouds’ linger over Genting Singapore
Maybank Securities analyst Yin Shao Yang has maintained a “hold” recommendation on Genting Singapore as “grey clouds” linger around the counter.
article_here
time of esg taggings 0.024298073956742883
https://www.theedgesingapore.com/capital/brokers-calls/grab-good-position-be-included-key-market-indices-disruption-inclusion-minimal
Citi Research analyst Arthur Pineda says Grab Holdings’ recent listing allows it potential to be included in key market indices. The tech group’s listing places it amongst the top 10 largest Singapore-headquartered stocks based on market capitalisation, at US$23 billion ($31.03 billion) as at the time of writing on Jan 18.
“This places the company in good footing to be included in key market indices such as MSCI Singapore which in turn raises potential concern on asset re-allocations. Weightings into Grab will need to be funded by a reduction in weightings for other legacy index names,” writes Pineda.
That said, the inclusion of Grab into such indices will likely see a minimal disruption for the existing large caps that’re already in the index, unlike the inclusion of Sea Limited in September 2021.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/maybank-lowers-genting-singapores-tp-83-cents-fy2022-earnings-likely-be
Maybank Securities analyst Yin Shao Yang has maintained “hold” on Genting Singapore as "grey clouds" linger around the counter.
Yin has also reduced his target price estimate to 83 cents from 86 cents previously, as he rolls his valuation base forward to end-FY2022. He has also raised his weighted average cost of capital (WACC) “a tad” to 13.1% from 12.3%.
Citing the suspension of the vaccinated travel lane (VTL) between Singapore and Malaysia by land, Yin predicts Genting Singapore’s earnings to be “flattish” for yet another year.
article_here
time of esg taggings 0.0349294519983232
https://www.theedgesingapore.com/capital/results/guocoland-reports-nearly-three-times-higher-earnings-675-mil-1hfy20212022
GuocoLand Limited has reported earnings of $67.5 million in the 1HFY2021/2022 ended December, nearly three times higher than earnings of $22.9 million from the same period a year ago.
Earnings per share (EPS) stood at 5.22 cents, from 1.20 cents in the year before.
The higher earnings came on the back of higher revenue, which grew 42% y-o-y to $452.7 million.
article_here
time of esg taggings 0.05639567202888429
https://www.theedgesingapore.com/news/property/guocolands-jv-tender-lentor-hills-road-land-parcel-accepted-bid-price-5866-mil
GuocoLand, on Jan 26, announced that its tender for a land parcel at Lentor Hills Road (Parcel A) has been accepted by the Urban Redevelopment Authority (URA) at a bid price of $586.6 million.
The bid price translates to $1,060 psf per plot ratio.
The tender was previously submitted by a consortium made up of GuocoLand’s wholly-owned subsidiary, GuocoLand (Singapore), together with Hong Leong Holdings’ subsidiary Intrepid Investments and TID Residential. TID is a joint venture between Hong Leong and Mitsui Fudosan.
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time of esg taggings 0.024841372156515718
https://www.theedgesingapore.com/capital/brokers-calls/hong-leong-asia-revving-stronger-ride-2022-cgs-cimb
CGS-CIMB Research analyst Ong Khang Chuen has maintained his “add” rating on Hong Leong Asia after the group reported its results for the 2HFY2021 and FY2021 ended December on Feb 25.
In his report dated March 8, Ong has lowered his target price to $1 from $1.05 before.
“We believe the worst is over for Hong Leong Asia, and expect sequential earnings recovery ahead for both of its key segments,” says Ong. “Our FY2022-2023 earnings per share (EPS) is lowered to factor in lower margin assumptions for Yuchai.”
For the 2HFY2021, Hong Leong Asia reported core PATMI of $19.3 million (-37% h-o-h, -22% y-o-y), dragged by weaker diesel engines unit (Yuchai) which saw sales decline after benefiting from strong pre- buying in 1H21 as China transitioned to National VI (N6) engines on July 1, 2021.
“FY2021 core net profit (excluding $10 million gain on debt assignment in 1HFY2021) of $50 million  (+10% y-o-y) was in line with our expectations at 99% of our full-year forecast,” says Ong.
“The group proposed full year dividend per share (DPS) of 2 cents (vs. FY2020: 1 centt), indicating 2.5% dividend yield,” he adds.
Moreover, Building and Construction Authority (BCA) expects further demand recovery for building materials in Singapore in calendar year (CY) 2022, and forecasts industry-ready mixed concrete demand to grow 8% to 21% and precast concrete demand to grow 45% to 63%.
“We forecast Hong Leong Asia’s building materials segment to see PBT growth of 27% y-o-y in FY2022F, riding on stronger sales volume in Singapore, narrower Tasek losses, and higher profit contribution from associate BRC Asia,” Ong says. “Commercialisation of HLA’s integrated construction and prefabrication hub (ICPH) in 4QFY2022 could further boost segment earnings in FY2023.”
However, engine unit sales declined 40% h-o-h to 171,000 engines in 2HFY2021, mainly dragged by weaker truck engine sales, while engine sales to the bus market and off-road market grew.
“Management believes that the accumulated distributors’ inventory (ahead of new engine standard implementation) has pared down well in 2HFY2021, and we forecast sales volume to improve sequentially in coming quarters as industry sales normalise,” Ong says.
“Along with volume recovery, we believe PBT margin for FY2022 will also improve given the high operating leverage of the segment,” he adds.
Some catalysts posited by the analyst include a stronger rebound in demand for diesel engine and faster recovery in Singapore’s construction sector. For downside risks, Ong considers input price pressure for Yuchai, dragging margin recovery.
Shares in Hong Leong Asia are trading at 1 cent higher or 1.28% up at 79 cents on March 9.
Photo: Bloomberg
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time of esg taggings 0.04757689009420574
https://www.theedgesingapore.com/capital/results/hwa-hong-corp-posts-376-increase-fy2021-earnings-57-mil-declares-1-cent-dividend
Hwa Hong Corporation, an investment holding company that has subsidiaries operate in general insurance, warehouse rental, packing of edible oil products, general trading in consumer products, and property management and development activities, announced that its FY2021 ended December 2021 earnings increased by 37.6% to $5.7 million from $4.2 million in FY2020.
This growth in earnings was mainly due to lower overall costs and higher contribution from the group’s associates and joint ventures.
Revenue for the financial period was 1.8% lower at $10.1 million from $10.3 million a year ago. With changes in fair value of investment securities coming in at a loss of $137,000, compared to gains of $5.2 million last year, gross profit was 50.4% lower y-o-y at $5.6 million.
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time of esg taggings 0.02575653907842934
https://www.theedgesingapore.com/news/ma/metro-group-signs-mou-daiwa-house-industry-strategic-collaboration
Metro Holdings has formed a strategic collaboration with Tokyo Stock Exchange-listed Daiwa House Industry Co, to explore further investment collaboration in property asset classes ranging from logistics, commercial and housing in markets across the Asia Pacific region.
It follows Metro’s investment in Daiwa House Logistics Trust (DHLT), which was listed on the SGX on Nov 26 2021. Daiwa House Industry is the sponsor of DHLT.
As one of the cornerstone investors, Metro invested some $41.3 million to take up some 51.6 million DHLT units, or 7.65% of the total.
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time of esg taggings 0.025018383050337434
https://www.theedgesingapore.com/capital/new-appointments/nera-telecommunications-appoints-new-ceo-and-executive-director
Communications and network solutions provider Nera Telecommunications has appointed Chong Hoi Ming as CEO and executive director.
As part of his role – which kicked off on Feb 7 – Chong will lead the group by charting its next phase of growth in systems integration and technology-related areas.
A veteran in the IT industry, Chong brings with him over 26 years of experience in corporate leadership including change and general management.
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time of esg taggings 0.02489309199154377
https://www.theedgesingapore.com/capital/results/nera-telecommunications-warns-fy2021-loss-over-tax-bills-and-pandemic-related-woes
Nera Telecommunications warns that it will report a net loss for the full year ended Dec 2021, after two of its overseas subsidiaries received tax bills equivalent to a total of $3.62 million.
“The estimated total tax liability payable, subject to ongoing negotiations with relevant tax authorities, is expected to have a material financial impact on the company and its subsidiaries,” states the company on Jan 26.
The company did not specify which these subsidiaries are in its announcement.
article_here
time of esg taggings 0.06990249291993678
https://www.theedgesingapore.com/capital/results/sinarmas-land-reports-417-lower-earnings-601-mil-2hfy2021
Sinarmas Land has reported earnings of $60.1 million in the 2HFY2021 ended December, 41.7% lower than earnings of $103.0 million in the same period the year before.
Its earnings for the FY2021, however, surged 44.7% y-o-y to $145.7 million from FY2020’s earnings of $100.7 million.
Earnings per share (EPS) for the 2HFY2021 stood at 1.41 cents and 3.42 cents respectively.
article_here
time of esg taggings 0.04370686109177768
https://www.theedgesingapore.com/capital/results/thakral-corp-2hfy2021-earnings-17-fy2021-earnings-149
Thakral Corp has reported earnings of $7.3 million for 2HFY2021 ended Dec 2021, up 17% y-o-y. Revenue in the same period was up 40% to $66 million.
For the full year FY2021, earnings hit $16.3 million, up 149%. Revenue, meanwhile, was up 42% to $127.8 million.
The company attributes the better showing partly to revaluation gains of properties it holds as investment.
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https://www.theedgesingapore.com/capital/property/hotel-grand-central-set-sell-office-building-melbourne-a808-million
Hotel Grand Central (HGC) has reached an agreement to sell a commercial office building in Melbourne for A$80.8 million ($77.1 million).
The property – which is located at 300 Flinders Street – was purchased in 2013 in 2013 with a 7-year lease to the then-vendor Victoria University for A$51.5 million (including stamp duty.
Victoria University pays around A$5.36 million annually for rental and outings. The tenancy, expires in October.
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time of esg taggings 0.04875709302723408
https://www.theedgesingapore.com/capital/contracts/cse-global-clinches-1312-million-new-orders-4qfy2021
Oil, gas and telecommunications company CSE Global has bagged $131.2 million worth of new orders in its 4QFY2021 ended Dec 31.
This is up 33.4% from the previous year, and brings the group’s total orderbook to $229.4 million at the end of the quarter.
Close to $85.5 million of the new orders were secured by the group’s energy sector, thanks to higher time and material jobs as well as newly awarded power and electrification projects.
article_here
time of esg taggings 0.025352790020406246
https://www.theedgesingapore.com/news/deals-joint-ventures-alliances/far-east-orchard-enters-jv-relation-hospitality-management
Far East Orchard, on March 4, announced that it has entered into a joint venture agreement (JVA) with Real Hospitality Group Asia Co in relation to a hospitality management business in China.
The JVA was entered into by the group’s subsidiary, Far East Hospitality Management Asia (FEHMA).
Under the JVA, FEHMA and Real Hospitality Group will set up a joint venture company (JVCo) in Hong Kong with a joint committed capital of RMB3 million ($645,000). The JVCo will then establish a wholly-owned subsidiary in China.
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time of esg taggings 0.02508721314370632
https://www.theedgesingapore.com/capital/results/far-east-orchard-announces-turnaround-supported-fair-value-gains
Far East Orchard recorded a profit after income tax of $16.8 million in FY2021, reversing the net loss of $8.9 million in FY2020. This was primarily due to fair value gains on investment properties. Excluding the fair value gains, the Group would have registered a wider net loss. Profit attributable to equity holders of the Company was $28.1 million in FY2021 (FY2020: $1.5 million), resulting in earnings per share of 6.12 Singapore cents (FY2020: 0.35 Singapore cents).
Group Chief Executive Officer of Far East Orchard, Mr Alan Tang commented on the results achieved, “In the face of a challenging environment, our team actively took steps to mitigate the headwinds posed by COVID-19. The hospitality sector continues to be weighed down by changing COVID-19 restrictions. However, we will continue to persevere with our current momentum and stand ready to steer our business through these times.”
Revenue for FY2021 declined by 4.8% year-on-year to $106.8 million compared to FY2020. This was mainly attributable to the Group’s hospitality business being impacted by the protracted COVID-19 pandemic as well as the ongoing lockdowns and border closures which impeded international travel and tourism. The decline was partially mitigated by the demand for accommodation facilities for isolation purposes and from companies for accommodation for their foreign workers in Singapore.
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time of esg taggings 0.02647137804888189
https://www.theedgesingapore.com/news/results/far-east-orchard-report-net-profit-fy2021-reversing-net-loss-fy2020
Far East Orchard has guided that it expects to report a net profit for the FY2021 ended December, reversing from its losses reported in the FY2020.
The expected net profit is mainly attributed to the fair value gains on investment properties.
On Nov 9, 2021, Far East Orchard reported losses of $12.8 million for the 9MFY2021 as the Covid-19 pandemic continues to affect the hospitality sector.
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time of esg taggings 0.026457112981006503
https://www.theedgesingapore.com/news/results/golden-energy-and-resources-reports-significant-improvement-revenue-and-earnings
Golden Energy and Resources Limited (GEAR) says it expects to report a “significant improvement” in its revenue and earnings for the 2HFY2021 and FY2021 ended December.
The improvement in revenue and earnings is primarily attributed to the higher average selling prices arising from an increase in coal prices, as reflected in the Indonesian Coal Index 4 (ICIT4), says GEAR in a Feb 10 statement.
The estimates are based on a preliminary assessment of the company’s unaudited financial results for the FY2021. Its results will be released on or around Feb 18.
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https://www.theedgesingapore.com/capital/results/serial-systems-2hfy2021-earnings-12-us53-mil
Distributor Serial System has reported earnings of US$5.3 million for 2HFY2021 ended Dec 2021, up 12% y-o-y.
Revenue in the same period was up 10% to US$457.6 million, as the company enjoys better business from both a larger customer and supplier base.
For whole of FY2021, the company reported earnings of US$11.1 million, up 4,168% over the preceding FY2020.
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time of esg taggings 0.023971620947122574
https://www.theedgesingapore.com/capital/results/singapura-finance-sees-670-surge-1h-earnings-47-mil
Singapura Finance has reported earnings of $4.7 million in the 1HFY2021 ended December, 67.0% higher than earnings of $2.8 million in the year before.
The stronger bottom line was primarily attributed to the higher net interest income and hiring charges of $12.4 million, up 35.4% y-o-y due to the decline in interest expenses driven by lower deposit rates.
The company’s earnings for the FY2021 doubled to $9.6 million from the $4.8 million reported in the FY2020 on the back of higher net interest income and hiring charges, which increased 34.6% y-o-y to $24.6 million.
article_here
time of esg taggings 0.0633356689941138
https://www.theedgesingapore.com/news/special-feature/why-lgs-generously-sized-136-inch-led-screen-suits-all-offices-and-events
As Singapore transitions to living with Covid-19 and more restrictions are eased, workers will gradually head back to the office after more than 2 years of various work from home restrictions.
Having experienced their high-resolution monitors from their work from home setup, employees would no doubt be expecting that back in the office as well.
Furthermore, when it comes to great presentations to a customer, say in a boardroom or meeting room, a screen that effectively captures the essence and image quality of the presentation is key.
Korean electronics manufacturer LG’s 136-inch All-in-One LED screen (LAEC) is one such screen that offers an optimal solution for all smart display needs.
Firstly, the screen is big enough for big gatherings at town halls, auditoriums and even ballrooms. Yet, it is also nifty enough for the boardroom and large meeting rooms.
It is also convenient in that it fits into most media ecosystems easily, is easy to install and care for, is easy to set up and tear down, and even has webOS-powered smart features.
This means you don’t have to worry about bringing your presentations in a hard disk drive when you can simply connect to the display’s server, and upload your presentation to the display itself.
The screen fits any corporate setting, from showrooms to boardrooms.
Now, why rock the boat and opt for an LED screen when you’ve already got a video projector a conventional LCD TV, you ask?
It’s simple. Pictures and videos that appear on video projectors may sometimes appear distorted. This is in addition to the numerous factors needed to get the quality of the presentation right, including the backdrop, projector bulb, and ambient lighting.
With conventional large LCD screens, which are mainly video walls made up of multiple smaller screens, the first drawback that comes to mind is the intersecting bezels – or black borders – that run across the frame, interrupting the overall experience.
Even worse: if an individual display fails, viewers will be treated to a gaping black hole in the middle of the presentation, which isn’t the best impression to portray to a prospective client or audience.
With LG’s 136-inch screen, the chances of presenting a less-than-stellar presentation are less likely.
The screen’s full HD resolution offers accurate images with no loss of picture quality, no unsightly bezel lines, and doesn’t depend on good lighting to get the picture across.
With its specifications, this means that even minor details like smaller texts can be clearly read. Its HDR 10 standard ensures that pictures show up with enhanced contrast and vivid colour expression, creating an engaging visual presence.
The screen also comes with built-in speakers, which also means that there is no need for extensive wiring to a sound system, or unsightly cables running across the event floor.
What this means for employees and presenters is that one can simply bring their device, plug it into the TV, and simply present to their intended audience without worrying about the technical details.
For a truly cordless setup, wireless screen sharing is also available via LG One: Quick Share, allowing users to simply plug in a USB dongle (sold separately) and share their screen to the display.
LG One: Quick Share’s USB dongle allows participants to share their screens seamlessly for a truly cordless setup.
For offices and event venues with existing media control systems, like Crestron Connected, the LG 136-inch All-in-One display can also be seamlessly integrated into the system, without any additional adaptations.
What this means is not only a simple solution for offices with a fixed setup, but also an incredibly convenient and efficient setup and teardown process for event organisers, who only need the screen, an HDMI cable, and a power socket to get the display up and running for any event they need. Furthermore, the display also comes with a flight case, ensuring both protection and portability.
“The 136-inch All-in-One (AIO) LED display makes LED a reality for any organisation. No matter the location or situation, it offers a complete solution for unlimited usage scenarios from boardrooms and classrooms to command centres and shopping malls,” says Jackie Jeong, B2B information display product director at LG Electronics Singapore.
Jeong also adds that it features user controls similar to that of a regular flat-panel TV, making the 136-inch AIO easy to install and easy to use with ‘plug-and-play’ support.
For readers of The Edge Singapore, you can register your interest here and enjoy complimentary installation, set-up and mounting bracket (worth S$2,500) with the purchase of the LG 136-inch All-in-One LED screen.
For more information, visit https://www.lg.com/sg/business/led-signage/lg-laec015-gn.
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time of esg taggings 0.034290848998352885
https://www.theedgesingapore.com/news/environmental-social-and-governance/fidelity-fewer-singaporean-women-invest-citing-high-cost
Fewer women in Singapore are actively making decisions about where to save or invest their money. According to a recent Singaporean study on personal finance conducted by investment manager Fidelity International, only 59% of women here actively invest, compared to 72% of men.
While Singapore men hold an average of $93,201 in investments, women here have invested an average sum of only $76,467. The same is true for personal savings: On average, women hold $69,597 in savings while men hold an average of $82,061.
The Global Women and Money 2022 survey aims to understand the experiences and views of women towards investing and money management.
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https://www.theedgesingapore.com/issues/inclusive-society/women-boardroom-how-greater-gender-parity-helps-companies
For a long time, women were under-represented in boardrooms. However, slowly but surely, this is starting to change. According to key findings of Deloitte Global’s Women in the Boardroom report, women held about 19.7% of board seats globally in 2021, an improvement from 16.9% in 2018 and 15.0% in 2016.
The C-suite category has also shown some improvement, with 5% of CEOs last year being women, up from 4.4% in 2018, while 15.7% of CFO positions are held by women, up from 12.7% in 2018.
Although there was an increase in female board representation last year, the progress at the chair and CEO levels is less apparent. This underscores the notion that placing more women on corporate boards does not necessarily equate to progress across leadership positions.
article_here
time of esg taggings 0.025005328934639692
https://www.theedgesingapore.com/capital/insider-moves/keppel-corp-starts-500-mil-buyback-mandate-grand-banks-yachts-shareholder
Keppel Corp announced on Jan 27 that it will be spending up to $500 million to buy back shares on the open market. The buyback started the following day and has continued steadily since then, at ever bigger quantities and higher prices as well.
On Jan 28 and Jan 31, the company acquired 56,8000 shares at $5.56 each, and 430,800 shares for $5.64–$5.65 each respectively. On Feb 3 and 4, it acquired 490,000 shares for $5.69–$5.71 each, and 180,000 shares for $5.77–$5.79 each respectively.
On Feb 7, 8 and 9, it acquired nearly 1.3 million shares at $5.84–$5.92 each; nearly 2.2 million shares at $5.94–$6.03 each; and 1.28 million shares at $6.03–$6.08 each respectively. With these acquisitions, Keppel has bought back a total of nearly 6.4 million shares of the 36.4 million allowed under its current mandate.
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https://www.theedgesingapore.com/news/results/grand-banks-yachts-expects-net-loss-1fy22-due-construction-disruption-and-increased
Grand Banks Yachts (GBY) expects to report a net loss for the 1HFY22, advising shareholders and potential investors to exercise caution when dealing in its shares.
In a filing, GBY CEO Mark Richards said the loss is mainly due to the prolonged shutdown of the company’s manufacturing facility in Pasir Gudang during the three months ended Sept 30, 2021, in compliance with movement control order issued by the Malaysian government.
The disruption affected the construction schedules for pre-sold boats, impacting revenue recognition in 1QFY22.
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time of esg taggings 0.024622049182653427
https://www.theedgesingapore.com/capital/brokers-calls/dbs-starts-hour-glass-buy-back-anticipated-record-fy2022-earnings
DBS Group Research has initiated “buy” on The Hour Glass with a target price of $2.62, which offers a potential upside of 30%.
The Hour Glass, which opened its doors in 1979, is mainly in the business of the sales and distribution of luxury and speciality watches. Today, it is one of the region’s leading speciality luxury watch retailers, with 53 retail boutiques in Singapore, Malaysia, Thailand, Vietnam, Hong Kong, Japan, Australia, and New Zealand.
In his March 15 report, analyst Paul Yong says he anticipates the luxury watch retailer to report record earnings in the FY2022 ending March 31.
According to the analyst, the record earnings are likely to be driven by the V-shaped recovery in the luxury goods industry in 2021.
In the 1HFY2022 ended September, the group saw record earnings with revenue and net profit rising 63% and 110% y-o-y respectively.
“We believe this is supported by the bullish stock market in 2021, which drove consumer sentiment, and the shift in domestic spending from travel towards luxury goods. We anticipate this trend to continue in 2HFY2022 on the back of seasonal demand and as consumption on luxury goods stays firm,” writes Yong.
“Over the longer term, we estimate the group to add six retail boutiques, which should drive a firm earnings growth of 12% by FY2025,” he adds.
That said, Yong sees a potential moderation of sales in the FY2023 due to the volatile stock market, though the “frontloading of spending ahead of GST hikes could lend some support”, he says.
That said, the longer-term industry uptrend looks to remain intact, thanks to the growing number of wealthy individuals in Asia.
“We observe a positive correlation of 0.67 between the number of high-net-worth individuals (HNWIs) in Asia and the group’s sales; that Asia’s wealthy are growing should bode well for the luxury goods players, including Hour Glass,” says Yong.
Shares in The Hour Glass closed 5 cents higher or 2.5% up at $2.05 on March 15.
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time of esg taggings 0.0499969229567796
https://www.theedgesingapore.com/news/brokers-calls/kgi-initiates-outperform-hour-glass-tp-232
KGI Research has started coverage on luxury watch retailer The Hour Glass with an “outperform” recommendation and a target price of $2.32.
The target price is based on a discounted cash flow model, taking into account a weighted average cost of capital rate of 10.5% and terminal growth rate of 2%, according to analyst Megan Choo.
Choo points out that The Hour Glass’s revenue rose 63% y-oy-y to $472 million for the half year ended Sept 30, 2021, while net profit surged 110% y-o-y to $63.5 million in 1H22. This is mainly due to improved gross margins at 29.3% in 1H22, compared to the previous period at 26.2%.
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time of esg taggings 0.024729460012167692
https://www.theedgesingapore.com/news/new-appointments/avarga-appoints-lim-gooi-hwa-ceo-upp-pulp-paper-sdn-bhd
Avarga Limited has announced the appointment of its chief executive officer, Lim Gooi Hwa, for UPP Pulp & Paper Sdn Bhd, a wholly-owned subsidiary of the company.
Lim’s appointment on Jan 3, means he will oversee Avarga’s paper manufacturing business in Malaysia.
Prior to his appointment, Lim was most recently the general director of IDS Medical Systems (idsMED) Vietnam.
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time of esg taggings 0.05880628200247884
https://www.theedgesingapore.com/capital/results/penguin-international-reports-33-higher-earnings-124-mil-2hfy2021
Penguin International has reported earnings of $12.4 million for the 2HFY2021 ended December, 33% higher than earnings of $9.3 million in the corresponding period the year before.
The company’s earnings for the FY2021, however, fell 4.1% y-o-y to $12.7 million.
Earnings per share (EPS) stood at 5.61 cents and 5.75 cents for the 2HFY2021 and FY2021 respectively, from EPS of 4.22 cents and 6 cents in the 2HFY2020 and FY2020.
article_here
time of esg taggings 0.02447233209386468
https://www.theedgesingapore.com/news/company-news/sp-corporation-terminates-agreement-coal-allocation-arrangements-indonesian
SP Corporation announced, on Jan 5, that it had entered into a termination and release agreement with PT. Indexim Coalindo (INDEXIM) and PT. Bukit Baiduri Energi (BBE) in relation to the coal allocation arrangements made previously.
The agreement was signed by SPRI Pte Ltd, a wholly-owned subsidiary of SP Corporation, on Dec 6, 2021.
Under the terms of the agreement, SPRI has agreed to accept US$122,918 ($166,590) as payment in lieu of delivery of the outstanding coal allocation of 122,918 MT due from INDEXIM as at Nov 30, 2021.
article_here
time of esg taggings 0.024675182066857815
https://www.theedgesingapore.com/news/covid-19/broadway-industrial-group-suspends-shenzhen-operations-suspension-not-expected-have
Broadway Industrial Group has announced that it has suspended its operations in Shenzhen, China, following a directive from the local government that all non-essential manufacturing operations in the city had to be closed for a week due to Covid-19.
According to the group, it is currently closely monitoring the situation in Shenzhen and engaging with the relevant stakeholders.
Prior to this, the group had already put in place a Covid-19 response and contingency plan across its manufacturing operations since the outbreak of the pandemic in early 2020.
In view of the measures, the temporary suspension of the group’s operations in Shenzhen is not expected to have a material impact on its financial position.
The group’s manufacturing operations in Thailand, Wuxi and Chongqing remain fully operational.
As at 9.32am, shares in Broadway Industrial Group are trading 0.3 cents higher or 1.53% up at 19.9 cents.
Update
In an update on March 20, the group says it has resumed about 85% of its operations in Shenzhen as at March 19, after the local government announced that all non-essential manufacturing operations may be resumed on March 19 for factories and employees located in the Pingshan area. The earlier directive on resuming full operations on March 21 remains unchanged. In line with the local government’s latest directive.
Photo: Bloomberg
article_here
time of esg taggings 0.027326644165441394
https://www.theedgesingapore.com/news/new-appointments/fn-announces-new-ceo-and-other-leadership-appointments
Beverage and publishing group Fraser and Neave (F&N) has announced Hui Choon Kit as its CEO from Feb 1.
The 57-year-old will “focus on accelerating the execution of F&N’s growth strategy and driving the growth of the [its] businesses,” the group announced in a Jan 31 regulatory filing.
Hui – who joined the group in 2000 – is currently the CFO and company secretary of F&N group. He has also held several leadership positions in corporate planning & business development, corporate communications & special projects, group finance and the corporate secretariat departments.
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https://www.theedgesingapore.com/capital/brokers-calls/rhb-remains-neutral-china-aviation-oil-uncertainty-prevails
RHB Group Research analyst Shekhar Jaiswal has maintained a “neutral” rating on China Aviation Oil (CAO) with an unchanged target price of $1.
Jaiswal’s continued neutral outlook on CAO comes amid the recent increase in the number of Covid-19 cases in China, which continues to be negative for the recovery in the country’s domestic and international aviation traffic.
This is especially so since China's National Health Commission (NHC) reiterated the significance of the country firmly sticking to its zero COVID-19 policy last Friday.
“While there has been some easing of Covid-19 guidelines, we believe the uncertainty over China Aviation Oil’s earnings recovery will overshadow its compelling valuation,” says the analyst in his March 21 report.
“From a low base of 2021, we expect CAO to report a 28% y-o-y profit growth each in FY2022-FY2023,” he adds. “Its FY2022 P/E is at 11x, implying an exciting 0.4x FY2022 price-to-earnings growth (PEG).”
However, the uncertainty around CAO being able to deliver such earnings growth remains elevated, says the analyst. “The company has been holding on to a net cash position (69% of its market cap) for a long while now and has failed to deliver any inorganic growth,” he says.
Moreover, China had put over 45 million people under some form of lockdown as authorities sought to stamp out the country’s biggest pandemic spread in more than two years. “This has already started showing an impact on China’s aviation traffic, with domestic, international, and commercial aviation numbers at Shanghai Pudong International Airport (SPIA) trending lower y-o-y for the March 12-19 period,” Jaiswal says.
Some risks, according to the analyst, include China retaining its zero Covid-19 policy throughout 2022 and lower-than-expected margins for the trading business.
Shares in CAO are trading 0.5 cents up and 0.56% higher at 89 cents on March 21.
Photo: Bloomberg
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time of esg taggings 0.03149337391369045
https://www.theedgesingapore.com/capital/brokers-calls/analysts-downgrade-china-aviation-oil-neutral-delayed-reopening-chinas
Analysts from DBS Group Research and RHB Group Research are turning neutral on China Aviation Oil (CAO) amid the uncertain outlook on the reopening of China’s international air travel.
DBS analyst Jason Sum has downgraded his recommendation on the counter to “hold” from “buy” as he sees that the delay in China’s reopening will be a drag on CAO’s earnings.
He has also lowered his target price estimate to 85 cents from $1.20 to reflect the negative earnings revisions and his less optimistic outlook.
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time of esg taggings 0.024868990993127227
https://www.theedgesingapore.com/capital/brokers-calls/rhb-looks-past-china-aviation-oils-profit-warning-optimistic-gradual-traffic
Optimistic on gradual traffic recovery, RHB Group Research analyst Shekhar Jaiswal is choosing to look past China Aviation Oil’s profit warning for 2021 and China’s strict zero-Covid-19 policy.
“Despite lowering 2021F-2023F earnings by 3%-11%, we believe valuation remains compelling as we remain confident of a gradual profit growth as aviation traffic recovers over the next two years,” writes Jaiswal.
In a Feb 3 note, Jaiswal is maintaining “buy” on China Aviation Oil with a lowered target price of $1.09 from $1.13 previously. The new target price represents a 16% upside and about 2% yield.
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time of esg taggings 0.02575213392265141
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-genting-singapore-raffles-medical-group-sasseur-reit
Genting Singapore
Price target:
DBS Group Research “buy” $1
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https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-phillipcapital-remain-neutral-raffles-medical-group-weaker-fy2022
Analysts from CGS-CIMB Research and PhillipCapital are keeping their “hold” and “neutral” recommendations on Raffles Medical Group, in contrast to the “buy” calls put forward by analysts from DBS Group Research, Maybank Securities and RHB Group Research .
CGS-CIMB analyst Tay Wee Kuang has lowered his target price estimate to $1.33 from $1.44 as the group’s core net profit for the FY2021 fell short at 91% of his full-year estimate.
See: Raffles Medical posts 27.7% increase in FY2021 earnings to $84.2 million; declares final dividend of 2.8 cents
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time of esg taggings 0.02649367693811655
https://www.theedgesingapore.com/capital/results/raffles-medical-posts-277-increase-fy2021-earnings-842-million-declares-final
Earnings of healthcare provider Raffles Medical Group softened by 8.1% to $44.7 million in 2HFY2021 ended Dec 31 2021, from $48.6 million in the year before.
This follows higher tax expenses for 2HFY2021, as the period's earnings before interest, taxes, depreciation and amortisation (EBITDA) had grown 4.9% y-o-y to $86.1 million from $82.1 million.
However, the group’s full-year earnings for FY2021 rose by 27.7% to $84.2 million, from $65.9 million in the year before thanks to stronger revenue growth.
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time of esg taggings 0.024759819032624364
https://www.theedgesingapore.com/news/sgx-query/sgx-regco-issues-trade-caution-metech-international-after-51-share-price-surge
Singapore Exchange Regulation (SGX RegCo) has issued a trade with caution alert on Metech International.
Shares in the company rose 51% or 12.5 cents higher from Nov 1, 2021 to Dec 21, 2021, despite the Straits Times Index (STI) declining 133.97 points or 4.2% during the period.
In response to a trading query issued Dec 20, 2021, Metech made reference to its earlier announcement on Sept 24, 2021 regarding its subsidiary’s joint venture agreement relating to the lab-grown diamonds industry and mentioned plans to seek approval at an Extraordinary General Meeting for its business diversification. Shareholders' approval was obtained on Jan 11.
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time of esg taggings 0.0219489810988307
https://www.theedgesingapore.com/news/deals-joint-ventures-alliances/metech-international-establish-joint-laboratory-create-new
Catalist-listed Metech International announced, on Jan 3, that it had entered into a tripartite collaboration with TEINYO and Yuhang Technology to establish a joint laboratory for the research and development (R&D) of new materials in Shenzhen, China.
The agreement was signed on Dec 31, 2021, via Metech’s joint venture company (JVC), Asian Eco Technology.
TEINYO belongs to the HIT Robot Group, which is a leading brand of scientific rehabilitation in China, while Yuhang Technology specialises in intelligent manufacturing systems and the industrial applications of artificial intelligence-based Internet of Things.
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time of esg taggings 0.02686785697005689
https://www.theedgesingapore.com/capital/results/multi-chem-reports-28-y-o-y-jump-2hfy2021-earnings
Multi-Chem, whose main business is in the distribution of IT products, has announced earnings of $13.4 million for 2HFY2021 ended Dec 2021, up 28% y-o-y. Revenue in the same period was up 20% y-o-y to $305.1 million, as it enjoyed better business.
For the full year, the company reported earnings of $25 million, up 40% y-o-y, on the back of the 26% increase in revenue to $603.6 million.
Multi-Chem, which has already paid an interim dividend of 4.2 cents per share, plans to pay a final dividend of 6.9 cents, bringing full year total to 11.1 cents.
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time of esg taggings 0.07554565905593336
https://www.theedgesingapore.com/news/property/frasers-property-commits-rmb3-billion-potential-china-property-joint-ventures
Frasers Property has entered into a “strategic alliance framework” with two joint venture partners it did not name, to undertake property development in China.
As part of this agreement, Frasers, via its subsidiary, Suzhou Sing Heng Le Enterprise Development will provide funding of some RMB1.84 billion ($394.4 million).
In addition, Frasers, via another subsidiary, Singlong Property Development (Suzhou) will extend an interest-bearing bridging loan of some RMB1.2 billion to one of the JV partners.
The loan will be up to July 1 and carry an interest of 8% a year.
The two joint venture partners are related entities.
If the investments do materialise, Frasers will own up to 25% of each project.
Frasers believe that by extending the financial support, it can form a “strategic alliance” with the JV partners and potentially undertake other investments together down the road.
Frasers Property traded at $1.09.
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time of esg taggings 0.025806713150814176
https://www.theedgesingapore.com/news/sustainability/frasers-property-secures-1993-mil-first-sustainability-linked-loan-uk-business
Frasers Property’s subsidiaries, Frasers Property (UK) and Hillington Park S.à r.l., have jointly secured a GBP110 million ($199.3 million) five-year bilateral sustainability linked loan on Jan 28.
The loan is the first sustainability-linked loan for the group in the UK, bringing the total number of green or sustainability-linked loans secured by the group to 25. The loans, together with two additional sustainability bonds, have raised over $6 billion for the group in total.
The loan, which is made in line with the sustainability linked loan principles dated May 2021 and updated in July 2021, will have a reduction in interest margin from its second year if Frasers Property (UK) maintains its four-star Global Real Estate Sustainability Benchmark (GRESB) rating.
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time of esg taggings 0.028133708983659744
https://www.theedgesingapore.com/news/new-appointments/frasers-property-singapore-names-soon-su-lin-new-ceo
Frasers Property Singapore has appointed Soon Su Lin as its new CEO, effective April 1.
Soon will report directly to Frasers Property’s group CEO Panote Sirivadhanabhakdi.
“Frasers Property Singapore remains a resilient and important business of the group. Su Lin has been my choice to take on the Singapore leadership role with her deep knowledge of the real estate landscape,” says Sirivadhanabhakdi.
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time of esg taggings 0.029149434994906187
https://www.theedgesingapore.com/news/sustainability/singapores-nuclear-power-potential-depends-unproven-designs
Singapore’s contemplation of a potential nuclear power plant will depend on next-generation technologies, a move that indicates the goal is still decades away from fruition.
The island state says so-called small modular reactors or other next-generation nuclear technology have the potential to be much safer than many of the plants in operation today, Minister of State for Trade and Industry Alvin Tan said in response to questions in Parliament on April 4.
Singapore concluded roughly a decade ago that conventional nuclear reactors are not suitable, he said.
Many of the “nuclear technologies are still in research and development phase, and have not begun commercial operations,” said Tan.
The questions were raised after Singapore said in a report last month that it could aim for next-generation nuclear or geothermal technology to make up 10% of its energy mix by 2050 under one possible decarbonisation scenario. Small-scale nuclear is one of the few local low-carbon power options available to small island nations like Singapore, although there are challenges both with the technology and the disposal of atomic waste.
The types of designs that Singapore is exploring are in the very early stages of development, with most experimental units not even built yet. And while small modular reactors are the most mature advanced nuclear technology, they are still likely decades away from being commercially viable for export to countries like Singapore.
The government is supporting research in relevant areas of nuclear policy, science and engineering, as well as efforts to train scientists and experts in local and overseas universities, Tan said. As for the possibility of geothermal energy, Nanyang Technological University is conducting exploratory studies to estimate the potential in various parts of Singapore.
Photo: Bloomberg
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time of esg taggings 0.026201264932751656
https://www.theedgesingapore.com/news/oil-gas/singapore-raises-power-tariffs-10-adding-price-pressures
Singapore’s state-owned grid operator announced it is raising electricity tariffs to cover the higher cost of imported natural gas, adding to growing inflationary pressures.
Electricity prices for its consumers will increase on average by 10% in the three months beginning April, SP Group said in an emailed statement Thursday. For households, the electricity tariff, excluding taxes, will increase to 27.94 cents per kWh from 25.44 cents from April 1, the company said.
Significantly higher crude oil and gas prices in the first quarter of this year prompted the tariff increase, it said.
Higher energy prices following Russia’s invasion of Ukraine have added to the global supply squeeze, fanning inflation the world over. Singapore’s core inflation -- -- which excludes private transport and accommodation costs -- is expected to pick up from the 2.2% level seen last month, boosting the case for further tightening when the nation’s central bank reviews policy settings in April.
The hike in tariffs -- the highest in data going back to Jan. 2014 -- prompted the country’s Energy Market Authority to ask consumers to conserve energy, and to extend measures that reduce the impact of rising costs on businesses until June, according to its website.
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time of esg taggings 0.050950823817402124
https://www.theedgesingapore.com/news/budget-2022/daunting-and-significant-analysts-react-singapores-carbon-tax-rate-hike
Singapore is taking its green agenda “to a new level” with carbon tax hikes in the coming years , writes DBS Group Research senior economist Irvin Seah.
In a Feb 21 note on Budget 2022 , Seah says Singapore’s current carbon tax rate of $5/tonne of carbon emission “pales in comparison to many other economies at similar stage of economic development”.
Sweden, for example, has set its rate at US$119/tonne. while Switzerland levies US$99/tonne. France charges US$45/tonne, while South Korea has set their carbon tax rate at US$33/tonne, writes Seah.
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https://www.theedgesingapore.com/digitaledge/digital-economy/fringe-future-why-digital-assets-hold-key-singapores-financial-future
Up until recently, digital assets have been perceived with a degree of hesitancy from traditional financial institutions and governments across the world.
Yet, as new use-cases prove their merit and the underlying technology becomes more accepted, institutions have started to incorporate digital assets into established processes. Singapore is currently at the front of the pack when it comes to experimentation, but this process can be accelerated further with a concerted effort from government bodies to drive legitimacy and adoption.
While cryptocurrencies are the native asset of a blockchain (for example, Ethereum), tokens like NFTs are created as part of a platform that sits on an existing blockchain. The decentralised nature of the blockchain systems, which underpin digital assets gives them immutability, security and transparency — qualities that lend these assets to a host of use-cases.
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https://www.theedgesingapore.com/capital/deals-joint-ventures-alliances/federal-international-enters-mou-green-solutions-green-energy
Federal International (2000) has entered into a memoranfum of understanding (MOU) with The Green Solutions Group (TSG). Federal will support TSG in the procurement of equipment and co-explore alternative transportation solutions. The parties also intend to collaborate and explore business opportunities of clean energy alternatives by using green hydrogen technologies.
TSG is a leader in harnessing green energy in Vietnam for the manufacture of Green Hydrogen and Green Ammonia.
Under this partnership, the dup intend to develop TSG’s Green Hydrogen manufacturing plant in Vietnam. The plant will produce Green Hydrogen and Green Ammonia using sustainable wind and solar energy. In addition, both companies shall explore the opportunities to export Green Hydrogen and Green Ammonia to South-East Asia countries.
TGS has commenced the initial stage of development of the Plant. TGS plans to install a 200 MW electrolysis Plant in Tra Vinh province, Vietnam, to produce 150,000-180,000 MT of Ammonia per year and 30,000 MT of Green Hydrogen per year. This plant is targeted to commence production in 2024.
There are plans to develop additional projects in the Mekong Delta region with similar capacity. Each plant may be upscaled to 500MW in the second stage and further develop projects in the Central Highlands of Vietnam to supply Green Hydrogen for domestic consumption.
Shares in Federal closed at 8 cents on Mar 22.
Photo: Stock
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time of esg taggings 0.034433029126375914
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-lendlease-global-commercial-reit-qm-dental-singapore-post
Lendlease Global Commercial REIT
Price target: PhillipCapital “accumulate” 94 cents
Acquisition of rest of Jem underway
PhillipCapital analyst Natalie Ong has kept her “accumulate” call on Lendlease Global Commercial REIT (LREIT) after the REIT proposed to acquire the remaining interest it does not own in Jem on Feb 15. She has also kept her target price unchanged at 94 cents.
In her report on Feb 23, Ong notes that the proposed acquisition will double LREIT’s assets under management (AUM) and market capitalisation, making it one of the top 20 Singapore REITs (S-REITs).
However “the large quantum of the acquisition necessitates equity fundraising, which carries a higher cost of capital, making this leg of the Jem acquisition less accretive compared to previous rounds,” she says.
“Based on our forecast, the acquisition of the remaining 86.15% stake in Jem is marginally accretive at 0.1%, in line with the pro forma distribution per unit (DPU) accretion of 0.1%–3.0%,” she adds.
To this end, Ong has increased her DPU estimate for the FY2022 and FY2023 by 1.7% and 0.3% respectively, while her DPU estimates for FY2024–FY2026 were lowered by 0.4%– 1.1% due to the REIT’s enlarged share base. The REIT has a June year end.
“The current share price implies FY2022 DPU yields of 6.0%. Pipeline assets for LREIT include Paya Lebar Quarters and Parkway Parade,” she says.
Jem is one of the bigger malls in Jurong East, pulling from a catchment of some 1.1 million residents as at 2020. The mall’s retail occupancy was 100% as at Dec 31, 2021, and remained above 98% throughout the Covid-19 pandemic, says Ong. “Despite the 100% occupancy, the manager managed to increase revenue for the property by creating 1,500 sq ft in additional net lettable assets (NLA) at level 1 and basement 1,” she adds.
The office component is fully leased to the Ministry of National Development (MND) on a 30-year lease ending in 2045. The lease is subject to a rent review every five years and contributes 20% and 35% of JEM’s gross rental income (GRI) and NLA for the year ended Dec 31. — Felicia Tan
Q&M Dental Group
Price target: CGS-CIMB “add” 79 cents DBS Group Research “buy” 72 cents
Valuations still attractive despite earnings miss
While Q&M Dental Group reported record earnings of $30.5 million for FY2021, its earnings of $3.2 million for 4QFY2021 ended December 2021 was below expectations of some analysts.
CGS-CIMB Research analysts Tay Wee Kuang and Kenneth Tan, who expected the dental group to log earnings of $7.4 million for the quarter alone, attributed the lower-than-expected earnings to higher staff and tax expenses.
As indicated in their Feb 24 report, Q&M’s revenue for the 4QFY2021 was in line with their expectations at 99% of their forecasts as they had “expected a seasonally stronger dental core revenue to partially offset lower Covid-19 testing during the quarter as Singapore shifted towards self-testing”.
During the year, Q&M opened 14 new dental clinics in Singapore, in line with their estimates, but below management’s target of 20 new clinics in Singapore.
With the company “steadfast” to hit its goal of opening 20 new clinics in Singapore and 10 in Malaysia per year for the next 10 years, the analysts expect this aggressive expansion to underpin revenue growth in the future that will offset weaker testing revenues, note the analysts in their Feb 24 report, where they’ve kept their “add” call target price of 79 cents.
As the daily polymerase chain reaction (PCR) tests continue to decline in February, CGS-CIMB’s Tay and Tan believe the supervised antigen rapid test (ART) services offered at Q&M’s clinics should help to partly offset the drop in PCR volumes.
“Acumen is also exploring the rollout of new PCR use cases (e.g. sepsis, dengue), which we believe could be a new earnings driver should commercialisation be successful,” write the analysts.
DBS Group Research analyst Paul Yong has similarly deemed Q&M’s 4QFY2021 earnings a miss, as he keeps “buy” on the counter with a lower target price of 72 cents from 80 cents before.
Yong sees pressure on revenue and margins for Q&M’s Acumen business going forward on the back of lowered demand for polymerase chain test (PCR) tests.
“Hence, we cut our estimates as we moderate our expectations and await more concrete plans regarding the testing business,” writes Yong in his Feb 25 report, where he lowered his earnings estimates for the Acumen Diagnostics business due to the fall in demand for PCR tests in Singapore.
However, like the analysts at CGS-CIMB, Yong is positive on Q&M’s primary healthcare segment given its “clear expansion strategy” for the next 10 years. “We expect to see the fruits of organic growth in FY2022, with more to come in the next nine years,” says Yong.
He has also deemed Q&M’s valuations as “undemanding”, which makes its current share price a good time to buy.
Yong notes that Q & M is currently trading at 15.5x FY2022 P/E, which is around 1 standard deviation below its five-year average, with an EPS CAGR of 12.8% over FY2021–FY2023. It is also an attractive yield play with FY2022 yield of 7.5%, writes Yong. — Felicia Tan
Singapore Post
Price target: CGS-CIMB “add” 90 cents
Enroute to steady recovery
CGS-CIMB Research is keeping its “add” call on Singapore Post (SingPost) with an unchanged target price of 90 cents, following its latest 3QFY2021 ended December 2021 business update.
In its business update, SingPost recorded revenue of $437 million, up 24% y-o-y, driven mainly by Famous Holdings (FMH), growth in e-commerce logistics and the consolidation of FMH. The higher revenue was partly offset by lower international post and parcel (IPP) revenue.
During the quarter, operating expenses increased 23% y-o-y to $400 million from volume-related expenses on the back of higher volume in freight forwarding and e-commerce logistics. Operating profit surged 46% y-o-y to $38 million mainly due to higher profit from FMH, domestic post and parcel (DPP) and from the consolidation of FMH.
“We believe that SingPost’s post and parcel segment can see further recovery in FY2023,” states Ong Khang Chuen in his Feb 25 report.
Domestically, e-commerce volumes grew to 15.5 million in 3QFY2022, representing a 23% q-o-q increase and a 50% y-o-y growth. This is helped by year-end peak shopping season and one-off nationwide distribution projects such as for ART kits and mouth gargles, of which Ong expects continued growth riding on structural increase of e-commerce penetration.
On the international front, IPP business has already seen some profit recovery in 3QFY2022, and Ong expects further recovery as flight capacity out of Changi Airport recovers more significantly. That, according to the analyst, will help alleviate conveyance costs, and aid margin recovery for the IPP business.
Meanwhile, further investments in the group’s logistics are expected to grow.
SingPost’s freight forwarding business continued its strong performance in 3QFY2022, benefitting from higher volume and sea freight rates.
At the same time SingPost is stepping up its investments in Australia with the intention of building it into its second home market. Aside from the stake increase in FMH, SingPost will also continue to build scale and capabilities.
Looking forward, Ong expects earnings recovery as more flight through Changi gradually resumes. At this point of time, Ong believes that the stock’s valuation is attractive, as it is trading at 1.3x standard deviation below mean. — Samantha Chiew
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time of esg taggings 0.06960548995994031
https://www.theedgesingapore.com/news/budget-2022/gst-hike-needed-build-better-singapore-tomorrow-lawrence-wong
The impending hike in Singapore’s goods and services tax (GST) is necessary to “build a better Singapore for tomorrow”, says Minister of Finance Lawrence Wong in a Facebook post on Feb 9 .
Wong’s post comes at a time when Singapore is at a “critical turning point” amid the Covid-19 pandemic.
“To do so, we will need to invest more in our people and our social infrastructure. The GST increase will help generate the revenues we need for this purpose,” he adds in a video clip that accompanied the post.
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https://www.theedgesingapore.com/capital/results/ho-bee-land-sees-earnings-surge-nearly-five-times-2250-million-2hfy2021
Ho Bee Land has reported earnings of $225.0 million in the 2HFY2021 ended December, some 4.8 times higher than earnings of $46.5 million in the corresponding period the year before.
The half-year period’s figures have boosted the developer’s FY2021 earnings to $330.5 million, 141% higher than FY2020’s earnings of $137.1 million.
The boost in earnings were attributed to the contributions from development properties, says Ho Bee Land in its Feb 28 release.
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time of esg taggings 0.03981080814264715
https://www.theedgesingapore.com/news/property/ho-bee-land-acquires-londons-scalpel-13-bil
Ho Bee Land, on Feb 24, announced the acquisition of The Scalpel in London for a total consideration of £718 million ($1.3 billion) to be satisfied entirely in cash.
A deposit of £35.9 million has been paid on Feb 23. The balance will be paid upon the completion of the acquisition on March 7.
The acquisition was made via acquiring all the shares in 34 Leadenhall Street Limited from Berkley Insurance Company and Berkley Regional Insurance Company.
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time of esg taggings 0.03674905700609088
https://www.theedgesingapore.com/news/property/ho-bee-land-talks-buy-londons-scalpel-office-tower-15-bil
A report by the Financial Times reveals that Ho Bee Land will be buying London’s famed The Scalpel office tower for £820 million ($1.5 billion).
According to the report dated Feb 22 (US time), The Scalpel’s owner, US insurance group, WR Berkley, is in talks with the SGX-listed Ho Bee Land.
The deal could be signed off as soon as this week, according to sources. A sale at the price represents a yield of just below 4%.
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time of esg taggings 0.030690643936395645
https://www.theedgesingapore.com/capital/brokers-calls/property-sector-offers-deep-value-accumulate-further-weakness-dbs
DBS Group Research analysts Derek Tan and Rachel Tan believe it’s a good time to buy Singapore property stocks, given attractive valuations that are “too good to ignore”.
Their recommendation comes nearly a month after the government announced a fresh set of property cooling measures effective Dec 16, 2021.
See: Fresh set of property cooling measures with immediate effect
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time of esg taggings 0.048705668887123466
https://www.theedgesingapore.com/capital/bonds-and-treasuries/are-we-turning-point-corporate-bonds
While there have been multiple wars and conflicts in the past two decades with severe humanitarian implications, these have been contained geographically, with minimal spillover impact on financial markets.
Beyond the humanitarian impact, the Russia-Ukraine conflict has had a broad second-order impact, with likely impacts to supply chain disruptions and its inflationary impact on economic growth and knock-on effects on the geopolitical stability in regions unable to substitute their food and energy sources.
We take some time this month to update our views from what we shared at the beginning of the year and look at what this means for corporate credit.
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https://www.theedgesingapore.com/news/environmental-social-and-governance/sgx-and-ocbc-launch-low-carbon-index-tracks-singapores
Singapore Exchange (SGX) and Oversea-Chinese Banking Corporation (OCBC Bank) have jointly launched the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index on March 14.
The index is said to be first of its kind, and will track the top 50 Singapore or globally-listed companies domiciled or incorporated in Singapore based on their carbon intensity performance.
The top 50 companies are determined by free-float market capitalisation.
According to the joint statement released by SGX and OCBC, the index is developed by the exchange as part of the SGX Sustainability Indices product suite in collaboration with OCBC’s product specialists.
The index will use an exclusionary methodology to remove companies that have a heavy involvement in the fossil fuels sector, while upholding best-in-class selections based on Scope 1 and Scope 2 greenhouse gas emissions (GHG) per unit of revenue.
The companies that constitute the index will have capped weighting to ensure portfolio diversification. Environmental and carbon intensity data are sourced from environmental, social and governance (ESG) investment research firm, Sustainalytics.
The impact of portfolio decarbonisation in this index is measured through its Weighted Average Carbon Intensity (WACI), a metric recommended by the task force on Climate-Related Financial Disclosures (TCFD) for reporting by asset owners and managers to their beneficiaries and clients.
Historically, this index has achieved an average of 50% reduction in WACI when compared to a standard cap-weighted index.
“The global green awakening has seen investors paying close attention to the actual carbon profile of companies, over and above green targets. Interest levels and references made on our sustainability indices have grown year on year with the launch of SGX Sustainability Indices suite in 2016 and the expansion of our ESG indexing capabilities following the acquisition of Scientific Beta in 2020,” says Ng Kin Yee, managing director and head of data, connectivity and indices at SGX.
“We are very pleased to partner with OCBC Bank to develop this purpose-driven index, that serves a strong demand for portfolio decarbonisation,” he adds.
Sunny Quek, head of global consumer financial services at OCBC Bank says, “In recent years, the financial sector has evolved from treating sustainability as part of risk management to now seeing it as a viable business strategy and direction.”
“We hope that our efforts will resonate with the wider community and create a green ripple effect amongst other financial players and industry leaders. Given the focus and efforts on sustainability by the Bank, this index is a good example of how we ‘walk the sustainability talk’ and reinforce our commitment to work towards low-carbon economies. We shall continue the momentum to create and maintain a sustainable environment for future generations,” he adds.
As at 2.31pm, shares in SGX and OCBC are trading at $9.50 and $11.71 respectively. The index is trading 2.48 points lower or 0.118% down at 2,107.98 points.
Photo: Bloomberg
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time of esg taggings 0.03046962502412498
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-sees-strong-support-dbs-and-ocbc-30-and-11-respectively-amid
UOB Kay Hian analyst Jonathan Koh has maintained his “overweight” recommendation on the Singapore banking sector as the banks’ exposures to Europe and Russia are minimal.
With the sanctions levelled against Russia, Koh writes that systemic risk to the sector is “elevated” but remains below the levels seen during past crises. “[This is because] Russia is not well integrated into the global financial system,” says Koh in his March 10 report.
“Financial linkages with other countries have been reduced since the European Union first imposed sanctions after Russia annexed Crimea and Sevastopol in 2014. Foreign central banks have not tapped on swap lines and repo facilities established by the Fed, indicating most countries didn’t experience dislocation in their financial systems,” he adds.
So far, the sanctions have had a “crippling impact” on Russia’s financial system with the rouble losing 43% of its value year-to-date (y-t-d) against the US dollar. This has led the Bank of Russia to hike its key interest rate from 9.5% to 20% to defend the rouble, notes Koh.
“The picture is vastly different outside of Russia. The FRA-OIS spread, a measure of dollar funding stress, inched higher by 27 basis points (bps) y-t-d to 34 bps. The deterioration is modest compared to previous crises, such as Europe’s Sovereign Debt Crisis (peaked at 59 bps in December 2011) and the Covid-19 pandemic (peaked at 79 bps in March 2020). Financial markets are under stress but remain functional,” he writes.
FRA-OIS, which represents the US forward rate agreement (FRA) and overnight index swap (OIS) market, is used as a metric of potential stress in banking. It takes the difference between the three-month London interbank offered rate (LIBOR) and the overnight index rate.
Buy into Singapore banks during share price weakness
With the current uncertainties, Koh has estimated a potential downside of 30%-42% in DBS’s share price, a downside of 1%-13% for OCBC, and a downside of 15%-22% for shares in UOB.
These figures were based on the numbers from the past three crises – Europe’s sovereign debt crisis, the crash in oil and gas, as well as the Covid-19 pandemic – as a gauge, says Koh.
“Direction for share prices of banks depends on the progress of peace talks to end the Russia-Ukraine war,” he writes.
“We see opportunities for bargain hunting in current weakness. Technically, we see strong support for DBS at $30 and for OCBC at $11,” he adds.
Koh has kept his “buy” call on DBS with a target price of $35.80.
In FY2022, Koh has pegged a total dividend of $1.44, which represents a dividend payout of 54.8%.
For the FY2023, he has cut his earnings estimates by 6%to $7.06 billion, with an expected total dividend of $1.48, or a payout of 54.7%. During the same year, Koh says he expects the bank’s net interest margin (NIM) to expand by 11 bps to 1.55%, down from his previous estimate of 1.61%.
“DBS provides [a] dividend yield of 4.5% for 2022 and 4.6% for 2023,” he writes.
Koh has also kept his “buy” recommendation on OCBC with a target price of $15.10.
In the FY2022, Koh expects the bank to distribute a total dividend of 56 cents, representing a payout of 50.6%.
In FY2023, Koh has cut his earnings estimates by 2% to $5.46 billion, with an expected total dividend of 60 cents, or a payout of 49.4%. In FY2023, Koh expects OCBC’s NIM to expand by 9 bps to 1.63% from 1.65% previously.
“OCBC provides [a] dividend yield of 4.9% for 2022 and 5.2% for 2023,” says Koh.
According to the analyst, catalysts to the sector on the whole, include the easing of Covid-19 restrictions and a recovery in the 2HFY2022 after the economy has weathered the Omicron variant wave.
Higher dividends from banks on the back of receding Covid-19 risks will also be catalysts to the sector, he adds.
Meanwhile, risks include the escalation of the Russia-Ukraine war to go beyond the invasion of Ukraine. The geopolitical tensions and trade conflicts between the US, China and Russia is also another downside risk to the sector.
On the impending rate hikes, Koh expects a series of four hikes with the Fed Funds Rate reaching 1.0% by end-2022, unchanged from his previous estimate. “We expect no hikes in 2023 (previous: four hikes),” he writes.
Shares in DBS and OCBC closed at $33.26 and $11.72 respectively, while shares in UOB closed at $30.12 on March 11.
Photo: File photo
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time of esg taggings 0.045589973917230964
https://www.theedgesingapore.com/capital/brokers-calls/rising-inflation-valid-concern-s-reits-some-mitigating-factors-ocbc
The team at OCBC Investment Research (OIR) says it foresees higher inflationary pressures to be a concern on the impact of margins on the Singapore REITs (S-REITs) sector.
Amid the inflationary pressures, interest rates are poised to increase further as central banks are likely to raise their benchmark rates in 2022, notes the team.
“Although this could result in higher borrowing costs ahead, we believe the S-REITs under our coverage have continued to be prudent on their capital management. The average gearing ratio stood at 37.4%, as at Dec 31, while 74.4% of their borrowings are fixed or hedged, which would mitigate the expected increase in borrowing costs ahead,” writes the team in their March 1 report.
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time of esg taggings 0.023605366004630923
https://www.theedgesingapore.com/news/russia-ukraine-crisis/dbs-ocbc-uob-halt-russia-commodities-lending-cut-risks
Singapore’s biggest banks are restricting trade financing for Russian raw materials, as the war in Ukraine spurs lenders in Asia’s largest energy and commodities trading hub to reduce exposure to the sanction-hit country.
The limits include a halt on issuing so-called letters of credit in US dollars for trades involving Russian commodities, including oil and liquefied natural gas, according to people familiar with the situation.
DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. have stopped issuing letters of credit involving Russian energy deals because of uncertainty over the course of sanctions, according to the people, who asked not to be identified as the information isn’t public. OCBC’s restrictions cover all commodities, one of the people said.
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time of esg taggings 0.025571702048182487
https://www.theedgesingapore.com/capital/brokers-calls/analysts-still-positive-ocbc-fy2021-earnings-perform-below-expectations
Analysts from CGS-CIMB Research, DBS Group Research, PhillipCapital, RHB Group Research and UOB Kay Hian are recommending investors continue to add their positions in Oversea-Chinese Banking Corporation (OCBC) even after the bank’s net profit of $973 million for the 4QFY2021 stood below consensus’ estimates by 18%.
The miss was due to the heftier 44 basis points (bp) of credit costs, and above the 25 basis points CGS-CIMB analysts Andrea Choong and Lim Siew Khee expected.
According to their estimates, DBS’s 4QFY2021 net profit missed their estimates by 14%.
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time of esg taggings 0.03736874298192561
https://www.theedgesingapore.com/news/global-economy/briefs-former-ocbc-rep-charged-st-engineering-enters-mou-road-rail-and-ev
Former OCBC rep charged for fraud and dishonesty
The Monetary Authority of Singapore (MAS) has issued a five-year prohibition order (PO) against Zeng Xuan, effective Feb 23. Zeng, who was formerly a representative of Oversea-Chinese Banking Corp (OCBC), was convicted in the state courts for fraud and dishonestly.
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time of esg taggings 0.034594936994835734
https://www.theedgesingapore.com/news/banking-finance/did-market-over-react-or-ocbc-raging-buy
As at the opening bell following the announcement of its FY2021 results on the morning of Feb 23, Oversea-Chinese Banking Corp’s (OCBC) share price fell 5.8% to $12.40 compared to the previous session’s close. Although OCBC's share price recovered to end at $12.56 on Feb 23, it slumped to $12 on Feb 24, following Russia's invasion of Ukraine.
The “first look” notes from analysts indicated that OCBC’s net profit was below expectations. “OCBC reported net profit of $973 million for 4QFY2021 (down 14% y-o-y and 20% q-o-q), below our forecast of $1,122 million,” writes Jonathan Koh, an analyst at UOB Kay Hian. Elsewhere, Maybank analyst Thilan Wickramasinghe writes in his report: “While rising rates could be a boon to interest income, [OCBC’s] larger dependence on markets-linked income sources exposes it to volatility and lowers earnings visibility in the current geopolitical backdrop.” He has downgraded OCBC to a “hold” from a “buy”.
For FY2021 ended December 2021, OCBC reported a net profit of $4.86 billion, up 35% y-o-y. Excluding Great Eastern Holdings, OCBC’s banking business recorded a net profit of $3.926 billion, up 41% y-o-y. Net interest income decreased 2% from the previous year to $5.86 billion, mainly attributable to a 7 basis points (bps) fall in net interest margin (NIM), despite a 3% increase in average asset balances. This decline was offset by robust growth in non-interest income, which climbed 14% to a record $4.74 billion from $4.17 billion in FY2020. Net fee income rose 12% to a new high of $2.25 billion.
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time of esg taggings 0.027432271977886558
https://www.theedgesingapore.com/news/banking-finance/former-ocbc-rep-slapped-five-year-prohibition-order-mas-fraud-and-dishonesty
The Monetary Authority of Singapore (MAS) has issued a five-year prohibition order (PO) against Zeng Xuan, effective Feb 23.
Zeng is a former representative of Oversea-Chinese Banking Corporation Limited (OCBC).
The PO comes after Zeng’s conviction in the state courts involving fraud and dishonesty.
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time of esg taggings 0.024260621052235365
https://www.theedgesingapore.com/capital/results/record-non-interest-income-and-lower-allowances-lifts-ocbcs-fy2021-earnings-35-486
Oversea-Chinese Banking Corporation (OCBC) has reported earnings of $4.86 billion for the FY2021 ended December, bringing it back to its pre-pandemic levels, says the bank on Feb 23.
Earnings per share (EPS) for the FY2021 climbed 33.8% y-o-y to $1.07.
The surge in earnings were underpinned by strong growth in non-interest income and lower allowances. This offset a decline in net interest income (NII) amid a low interest rate environment.
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time of esg taggings 0.0296963129658252
https://www.theedgesingapore.com/capital/brokers-calls/mct-benefit-development-greater-southern-waterfront-uob-kay-hian
With five properties located in the Harbourfront area including VivoCity, Mapletree Commercial Trust (MCT) is set to benefit from the development of the Greater Southern Waterfront and the rejuvenation of Sentosa Island and Pulau Brani, says UOB Kay Hian analyst Jonathan Koh in his Feb 18 report.
Another re-rating catalyst for the REIT’s share price would be the distribution per unit (DPU) and net asset value (NAV) accretion from the merger with Mapletree North Asia Commercial Trust ( MNACT ), Koh adds.
MCT and MNACT, on Dec 31, 2021 , announced their proposed merger to form a new flagship commercial REIT named Mapletree Pan Asia Commercial Trust (MPACT).
In his report, Koh writes that investors are “overly worried” about MNACT’s anchor asset Festival Walk in Hong Kong, with an “overly pessimistic view” on Festival Walk’s outlook.
See: Reality check: questions posed by SIAS to MNACT and MCT managers and Analysts see strategic positives from MCT and MNACT merger
While the mall experienced mishaps in the form of the Hong Kong protests in November 2019 and the Covid-19 pandemic in 2020 and 2021, Koh sees the current weakness as “an opportune timing” to acquire the property.
To this end, Koh believes Festival Walk has started to experience a turnaround after two straight years of negative rental reversion.
Furthermore, domestic consumption in Hong Kong has begun to normalise and the reopening of Hong Kong’s border with mainland China is imminent, notes Koh.
In addition, Festival Walk, which has only 25 years left on its land-use right, will be extended by 50 years upon its expiry on June 30, 2047.
“Articles 120-123 of Basic Law provide the legal basis for renewal of land leases in Hong Kong. Based on a policy statement announced in Jul 1997, new leases of land would be granted a term of 50 years subject to payment of annual land rent equivalent to 3% of the annual rent value of the property,” writes Koh.
“There are many precedents for extension of land leases, the most notable being the extension of land lease for Pok Fu Lam Gardens by 50 years until 2056 in mid-2006. Under the current land lease extension policy, leasees need to apply for “conditions of regrant” two years before the expiry of land leases,” he adds.
The way Koh sees it, MNACT unitholders may vote against the merger with MCT.
“There is a new air of activism in the Singapore stock market. Proxy advisors Institutional Shareholder Services and Glass Lewis have questioned the deal process and unfavourable offer and have advised unitholders to vote against the merger between ESR REIT and ARA LOGOS Logistics Trust,” writes Koh.
“Similarly, activist fund manager Quarz Capital has also complained about the unattractive offer from MCT, which undervalues MNACT at a discount to NAV per unit of $1.27. If the deal is aborted, MCT’s unit price could recover back above $2.00,” he adds.
Koh has kept his DPU forecast for MCT on a standalone basis.
MCT’s unit price has corrected 9% since the proposed merger, whereas MNACT’s unit price has dropped by a smaller 1.8%.
On a relative basis, MCT has underperformed by 5.5%, while MNACT has outperformed by 1.7% relative to the FTSE all-share S-REIT index, says Koh.
He has kept “buy” on MCT with a target price of $2.48.
In their reports on Jan 27, analysts from Maybank Securities and OCBC Investment Research have also kept “buy”.
Maybank analyst Chua Su Tye has kept his target price unchanged at $2.35, as he expects MCT’s recovery to gain transaction in the coming quarters.
MCT, on Jan 26 , r eported gross revenue of $374.0 million for the 9MFY2021 ended December, up 7.3% y-o-y. Its net property income (NPI) for the same period was up by 5.6% y-o-y to $291.3 million.
To Chua, the REIT’s results were “operationally in line” with his estimates.
Noting that valuations have pulled back since the announcement of its proposed merger with MNACT, Chua says he continues to see “clear strategic merits of the deal” beyond the strong financial accretion.
“While MCT’s $1.8 billion debt headroom (at 45% limit) offers deal options, we see accelerated growth from a higher $3.8 billion debt capacity and $1.7 billion asset enhancement initiatives (AEI)/ development headroom, upon a successful MNACT merger, as we expect the larger MPACT to embark on more sizeable office acquisitions with its enlarged Pan Asian mandate,” writes Chua.
He adds that he expects MCT’s DPUs to recover in FY2022, following the decline in FY2020/2021 with the capital retention helped by the MBC II deal.
“Rental reversion should decelerate from strong double-digits to 1.5-2% in FY2021 to FY2022 as VivoCity rents catch up with the market. [MCT’s] rents at business park assets [are estimated to] grow at 2% to 3% per annum (p.a.) due to limited supply, and firm demand,” he says.
Upside to MCT’s share price includes an earlier-than-expected pick-up in leasing demand for retail, office and business park space, better-than-expected rental reversions, as well as accretive acquisitions or redevelopment projects.
Meanwhile, downsides include an extended slowdown in economic activity, which could reduce demand for retail, office and business park space resulting in lower occupancy and rental rates. The termination of long-term leases, which may contribute to a weaker portfolio tenant retention rate, and a sharper-than-expected rise in interest rates that could increase the cost of debt, are also downsides.
The research team at OCBC Investment Research (OIR) has lowered its fair value estimate to $2.04 from $2.14.
“Given that MCT’s share price has already declined 8% (as at the close on Jan 26) since it announced its proposed merger with MNACT, we see a more favourable entry point even with our reduced fair value,” writes the team, who sees signs of recovery.
“[We] believe MCT’s strong parentage and healthy balance sheet will allow it to tide over near-term uncertainties, while its strong management team and portfolio are well positioned over the longer-term,” add the team of analysts.
The team had also adjusted its cost of equity (COE) assumption upwards to 6.6% from 6.4% on account of the REIT’s potential into higher risk markets such as China and Hong Kong should its merger with MNACT go through. However, it believes that “this would be partially offset by the strategic benefits of having a larger scale, better trading liquidity and potential increase in its constituent index weight”.
MCT may offer investors a unique exposure to the retail, office and business park sub-sectors in Singapore, this could potentially change given the proposed joint merger with MNACT.
“If successful, the merged entity would become one of the largest REITs by market capitalisation listed in Asia, with a significantly larger scale and platform which is better positioned to unlock upside potential. That said, we believe MCT would gain new exposure to riskier markets and see dilution of its pure-play Singapore status,” writes the team.
Units in MCT closed 1 cent lower or 0.54% down at $1.85, or an FY2022 P/B of 1.1 times and dividend yield of 5.1%, according to OCBC’s estimates.
Photo: MCT
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time of esg taggings 0.039271177956834435
https://www.theedgesingapore.com/news/banking-finance/ocbc-bank-rolls-out-emergency-kill-switch-allows-customers-freeze-all-accounts
OCBC Bank has rolled out a kill switch that enables its customers to freeze all their current and savings accounts (CASA) in an emergency such as a scam.
The kill switch will also disable ATM access, debit and credit card transactions, as well as access to digital banking and the OCBC Pay Anyone app.
To activate the kill switch, OCBC’s customers only need to select option “8” via the bank’s official contact number, 1800 363 3333 or at 500 standalone OCBC Bank ATMs.
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time of esg taggings 0.024115568958222866
https://www.theedgesingapore.com/capital/reits/credit-investment-implications-recent-reits-and-developers-moves
Real estate investment trust (REIT) and property developers form a staple feature of the Singapore dollar (SGD) corporate credit market with $27.5 billion of bonds and perpetuals outstanding in total, rep­resenting around 26% of the market (excluding government bonds and statutory boards).
Given their significant prevalence and the earnings season is in full swing, we think it is an opportune time to share the key sector developments and implications to corporate credit investors.
REIT #1: Expect gradual rise in aggregate leverage
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https://www.theedgesingapore.com/capital/brokers-calls/phillipcapital-remains-overweight-banks-ahead-fy2021-results-ocbc-most
With attractive dividend yields, excess capital ratios and interest rates dipping slightly in January, PhillipCapital Research analyst Glenn Thum remains positive on Singapore banks.
“Bank dividend yields are attractive with upside surprise due to excess capital ratios. Improving economic conditions and rising interest rates remain tailwinds for the banking sector. Singapore Exchange (SGX) is another beneficiary of higher interest rates,” writes Thum.
In a Feb 9 note, Thum is maintaining “overweight” on the sector.
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time of esg taggings 0.024528571870177984
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-remains-positive-dbs-and-ocbc-ahead-4qfy2022-results
UOB Kay Hian analyst Jonathan Koh is keeping his “overweight” call on the Singapore banking sector, as he sees all three banks as being the prime beneficiaries of higher interest rates.
Ahead of the banks’ results for the 4QFY2021 and FY2021, Koh predicts a lull in all three banks’ results, as is typically seen during the quarter.
DBS Group Holdings is slated to release its results on Feb 14, while UOB and OCBC are scheduled to release their results on Feb 16 and Feb 23 respectively.
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time of esg taggings 0.02399250795133412
https://www.theedgesingapore.com/capital/brokers-calls/analysts-neutral-starhill-global-reit-results-stood-below-expectations-soochow
Analysts from OCBC Investment Research (OIR) and Soochow CSSD Capital Markets have rated “hold” on Starhill Global REIT, with the recommendation from the latter being a downgrade.
The lacklustre recommendation was due to the REIT’s weaker-than-expected results for the 1HFY2021/2022 ended December.
For the 1HFY2021/2022, Starhill Global REIT reported a distribution per unit (DPU) of 1.78 cents, down 5.3% y-o-y, with the decline largely attributed to the $3.1 million in distributions given out in the same period the year before.
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time of esg taggings 0.02502520103007555
https://www.theedgesingapore.com/capital/brokers-calls/rhb-trims-ocbc-target-price-after-scam-attacks-expects-steady-4q21-results
OCBC Bank is on track to post steady 4QFY2021 results on Feb 23, say RHB Group Research analysts. Despite this, a recent phishing scam targeting OCBC Bank customers revealed heightened risks, and RHB Group Research is trimming the bank’s share price estimate.
“We expect OCBC Bank to post a net profit of $1.188 billion in 4QFY2021, with the estimated 3% q-o-q dip in earnings coming mainly from seasonally lower wealth management fees and higher operating expenses,” says RHB Group Research. “That said, underlying operations remain healthy and asset quality stable. Key share price catalyst would come from the imminent interest rate upcycle and its undemanding valuation.”
In a Jan 25 note, RHB Group Research is maintaining “buy” on OCBC Bank, but with a lowered target price of $14.80 from $15.10 previously. The new target price represents a 20% upside and 4% yield.
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time of esg taggings 0.026539907092228532
https://www.theedgesingapore.com/capital/brokers-calls/ocbc-lowers-yanlord-land-groups-tp-116-weaker-contracted-sales-outlook
The team at OCBC Investment Research has kept its “hold” rating on Yanlord Land Group with a lower fair value estimate of $1.16 from $1.20 due to a weaker contracted sales outlook.
“We factor in Yanlord’s actual FY2021 contracted sales in our model, and also assume a 5% contraction for FY2022,” writes the team in its Jan 14 report.
To be sure, Yanlord’s contracted sales for FY2021 ended December fell 24.0% y-o-y to RMB59.6 billion ($12.63 billion), due to a decline in both contracted gross floor area (GFA) and average selling price (ASP) of 12.7% and 13.0% y-o-y to 1.87 million sqm and RMB31,889 per sqm respectively.
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time of esg taggings 0.024602486053481698
https://www.theedgesingapore.com/capital/brokers-calls/10-share-price-growth-over-two-weeks-ocbc-positive-uobs-acquisition-citi
OCBC Investment Research welcomes United Overseas Bank ’s acquisition of Citi’s consumer business in Indonesia, Malaysia, Thailand and Vietnam, announced Jan 14.
The proposed acquisition, which will cost UOB nearly $5 billion, is said to further strengthen and deepen UOB’s Asean franchise. The transaction should be completed between mid-2022 and early 2024.
“Post-acquisition, the bank expects an immediate $1 billion in incremental annual income uplift and asset growth through the expanded franchise,” writes OCBC Investment Research in a Jan 14 note. “Its proforma 1HFY2021 geographical loan mix is expected to remain largely unchanged in terms of regional distribution post transaction, with Singapore anchoring the majority of group loans.”
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time of esg taggings 0.02364522684365511
https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-adds-ocbc-its-alpha-picks-drops-thai-beverage
UOB Kay Hian Research has added OCBC Bank to its alpha picks portfolio for the month of January.
The move comes after the team’s portfolio saw a flat month in December, which stood 0.2% higher month-on-month (m-o-m), compared to the benchmark Straits Times Index’s (STI), which grew 2.7% m-o-m.
“Our portfolio was hurt in December 2021 by the lack of financial sector exposure which rose by an aggregate 2.5% m-o-m,” writes the team in a Jan 3 report.
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time of esg taggings 0.024756263941526413
https://www.theedgesingapore.com/capital/results/micro-mechanics-reports-2qfy2022-earnings-456-mil-23-y-o-y
Micro-Mechanics has reported revenue of $20.4 million for its 2QFY2022 ended Dec 2021, up 8.7% y-o-y. However, because of higher costs, the company’s earnings was up by 2.3% y-o-y to $4.56 million.
For the six months ended Dec 2021, revenue was up 10.7% y-o-y to $40.8 million whereas earnings was up 4.6% y-o-y to $9.5 million in the same period.
Chris Borch, CEO of Micro-Mechanics says the pandemic has presented a number of significant challenges to the company.
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time of esg taggings 0.07324567507021129
https://www.theedgesingapore.com/capital/insider-moves/temasek-increases-stake-aem-holdings-open-market-buying-142-mil-shares-around
Temasek Holdings, AEM Holding’s largest shareholder, has increased its stake after an indirect subsidiary bought more shares in the market.
As indicated via an SGX filing on March 9, Temasek’s indirect subsidiary Venezio Investments, paid $5,647,480.02 for 1,416,900 shares. That works out to an average of $3.9858 each.
With that Venezio has increased the number of AEM shares held to 30,998,500, or 10.02%, from 9.56%.
Temasek has a deemed interest in additional AEM shares held via another entity SeaTown Holdings, which is run separately. Its total deemed interest is now 31,814,600 shares, or 10.29%, up from 9.83%.
Temasek become AEM’s largest shareholder in September following its investment of $103.1 million via placement of 26.8 million new shares at $3.8477 each.
AEM shares closed at $4.11 on March 9, up 1.99%, but down 21.56% year to date.
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time of esg taggings 0.0800943928770721
https://www.theedgesingapore.com/capital/results/aem-holdings-reports-2hfy2021-earnings-624-million-plans-final-dividend-5-cents
AEM Holdings has reported earnings of $62.4 million for 2HFY2021 up 47.5% from 1HFY2021. However, full year earnings was down 5.6% to $92.1 million over FY2020 because of lower margins.
Revenue for 2HFY2021 was up 52.2% y-o-y to $373.2 million, with contributions from recently acquired CEI.
For the whole of FY2021, revenue was up 9% to $565.5 million, which exceeds the company’s guidance.
article_here
time of esg taggings 0.023955561919137836
https://www.theedgesingapore.com/news/company-news/raffles-education-directors-arrested-cad-relation-loan-affin-bank
Raffles Education’s chairman and CEO Chew Hua Seng, along with lead independent non-executive director Lim How Teck, non-independent non-executive director Joseph He Jun, independent non-executive director Ng Kwan Meng and Doris Chung Gim Lian, a director and key management of Raffles K12 Sdn Bhd and Raffles Iskandar Sdn Bhd, have been arrested by the Commercial Affairs Department (CAD).
On Feb 21, Raffles Education announced that the individuals were notified to attend the CAD’s offices to effect their formal arrest and posting and release on bail.
The bail amount for each person has been set at $30,000.
article_here
time of esg taggings 0.028952877037227154
https://www.theedgesingapore.com/capital/results/raffles-education-corporation-reports-51-lower-earnings-183-mil-2qfy2022
Raffles Education Corporation (REC) has reported earnings of $18.3 million for the 2QFY2022 ended December, 51% down from earnings of $37.3 million in the same period a year ago.
This brings the company’s 1HFY2022 earnings to $8.7 million, down 76% y-o-y. In the 1QFY2022 , REC reported a loss of $9.6 million on lower other operating income
2QFY2022 earnings per share (EPS) stood at 1.33 cents.
article_here
time of esg taggings 0.033479697071015835
https://www.theedgesingapore.com/news/tech/addvalue-secures-idrs-order-new-customer
Satellite-based communication company Addvalue Technologies has secured an Inter-Satellite Data Relay System (IDRS) order from a new customer on Feb 10.
The order will see Addvalue Technologies supplying IDRS terminals as well as the provision of related airtime service.
The latest order now brings the total number of IDRS customers for Addvalue Technologies to eight. The order was secured by Addvalue Technologies’ wholly-owned subsidiary, Addvalue Innovation.
article_here
time of esg taggings 0.026539498008787632
https://www.theedgesingapore.com/news/company-news/boustead-projects-wholly-owned-subsidiary-slapped-94000-fines-after-pleading
Boustead Projects E&C, the wholly-owned subsidiary of Boustead Projects, has pleaded guilty to 10 charges under the Air Navigation Act (ANA).
The charges were in relation to the use of unmanned drones by Boustead Projects E&C at two of its construction sites in a bid to leverage on the use of technology to increase the efficiency and productivity of its operations, and to mitigate the disruptions caused by the pandemic.
At a hearing held by the State Courts of Singapore on March 28, Boustead Projects E&C pleaded guilty to four charges relating to operating an unmanned aircraft at the Kranji site without a class 1 activity permit in 2020.
Boustead Projects E&C pleaded guilty to another four charges for operating an unmanned aircraft at the Cleantech site without a class 1 activity permit in 2020, as well as two charges relating to the failure to operate an unmanned aircraft at the Cleantech site in 2020 in accordance with the class 1 activity permit granted to the company.
The unmanned aircrafts were operated on specific dates and timings that were not covered under the permits applied by Boustead Projects E&C.
Due to this, Boustead Projects E&C has been slapped with fines totalling $94,000 for the 10 charges.
“The company has since reviewed and implemented a standard operating procedure (SOP) in respect of the permit applications and dissemination, with a view to ensuring that such contraventions will not occur in the future,” says Boustead Projects in its March 29 statement.
As at 4.37pm, shares in Boustead Projects are trading flat at 96.5 cents.
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time of esg taggings 0.027349309995770454
https://www.theedgesingapore.com/capital/brokers-calls/analysts-remain-positive-delfi-fy2021
Analysts stay positive on Delfi Limited in lieu of strong showings for 2HFY2021 ended December, topped with cost discipline, as a leading chocolate confectionery player in Asean’s largest economy.
DBS Group Research analyst Woon Bing Yong has maintained a “buy” rating on Delfi with an increased target price to $1.10 from $1.07.
According to Wong, Delfi’s 2HFY2021 core PATMI – or earnings – beat expectations, soaring approximately 110% y-o-y to US$14.0 million ($18.9 million). “Delfi’s valuation is attractive, at 12.1x FY2022 P/E (below -1 s.d. of its four-year historical mean),” he says. “Following the group’s special dividend announcement, we see Delfi as a potential dividend play, offering between a 4%-5% yield based on current prices.”
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time of esg taggings 0.02510934486053884
https://www.theedgesingapore.com/capital/results/delfi-announces-675-rise-patmi-special-dividend
Delfi achieved full-year Patmi (including non-recurring items) of US$29.3 million for the 12 months ended Dec 31, the company's FY2021, up 67.5%. Excluding the US$3.3 million of non-recurring items, the Group’s Patmi y-o-y growth was 48.9% as revenue and profit margins in 2021 were higher y-o-y.  Revenue grew 5.2% y-o-y to US$405.1 million in FY2021.Earnings per share in FY2021 was 4.79 US cents compared to 2.86 US cents in FY2020. Net asset value per share was 39.2 US cents as at Dec 31, up 6.2% y-o-y.
Delfi has proposed a final dividend of 1.08 US cents per share and a special dividend of 0.48 US cents per share, which together with the interim dividend of 1.27 US cents per share, brings the total dividend for FY2021 to 2.83 US cents per share. Delfi last traded at $0.75.
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time of esg taggings 0.05398878897540271
https://www.theedgesingapore.com/issues/stocks-watch/delfi-aiming-new-sweet-spots-and-next-generation-sweet-tooth-growth
Chocolate confectionery company Delfi has seen gradual recovery from the pandemic, supported by the reopening measures in its key operating markets. While there are still some lingering uncertainties in the business prospects, the company has guided its business to recover in the short term. Furthermore, at the moment, Delfi is relatively cheaper than its peers, which suggests potential upside.
Founded by the Chuang family back in the 1950s in Indonesia but now based in Singapore, Delfi has a well-established portfolio of chocolate confectionery brands such as “SilverQueen”, “Ceres”, and “Delfi”. According to Euromonitor, Delfi commanded about 40% of Indonesia’s chocolate confectionery market based on retail value in 2020.
Despite the spike in infection rates across its key markets, Delfi recorded ebitda of US$6.4 million ($8.6 million) on revenue of US$87 million in 3QFY2021. This 20.8% and 4.1% growth y-o-y respectively was driven by higher sales and margin.
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time of esg taggings 0.02829005615785718
https://www.theedgesingapore.com/capital/results/challenger-technologies-reports-lower-2hfy2021-earnings-plans-higher-dividend-payout
IT retailer Challenger Technologies has reported earnings of $8.4 million for 2HFY2021 ended Dec 2021, down 38% y-o-y. Revenue in the same period down 3$ y-o-y to $147.4 million.
For the full year FY2021, the company reported earnings of $17.8 million, down 24% y-o-y, or %5.5 million, as it did not enjoy the same quantum of government wage subsidies it had for the 2HFY2020 period.
If this one-off item is excluded, the company’s earnings would be $0.4 million lower.
article_here
time of esg taggings 0.026366865960881114
https://www.theedgesingapore.com/capital/results/kingsmen-creatives-back-black-fy2021
Kingsmen Creatives has reported lower revenue of $156.1 million for 2HFY2021 ended Dec 2021, down 4.8% y-o-y.
However, thanks to cost control, the company was able to report earnings of $2.7 million for the same half year ended Dec 2021, a reversal from the year earlier red ink of $5.8 million.
For the whole of FY2021, the company recorded earnings of $1 million, versus a loss of $11.1 million incurred in FY2020, when the pandemic hit its business. FY2021 revenue was down 4.8% over FY2020 to $273.2 million.
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time of esg taggings 0.024695871165022254
https://www.theedgesingapore.com/capital/contracts/king-wan-corp-secures-269-mil-worth-new-me-contracts-grand-hyatt-singapore
King Wan Corporation has secured a new mechanical and electrical (M&E) contract worth approximately $26.9 million for the supply, installation & commissioning of air conditioning and mechanical ventilation services for the proposed additions and alterations to Grand Hyatt Hotel Singapore.
This project is scheduled to be completed in 2023 and this contract is not expected to have any significant earnings impact for the FY2022 financial year ending Mar 31, 2022.
Shares in King Wan closed at 3.6 cents on Jan 28.
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time of esg taggings 0.024041070137172937
https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-starts-pan-united-add-sac-capital-sees-brightening-outlook-higher-tp
Analysts from CGS-CIMB Research and SAC Capital are positive on Pan-United’s prospects.
On March 29, CGS-CIMB analysts Kenneth Tan and Ong Khang Chuen have initiated “add” on Pan-United Corporation with a target price of 56 cents as it sees the ready-mix concrete (RMC) supplier as being a beneficiary of Singapore’s multi-year construction cycle.
The target price is pegged to an FY2023 EV/EBITDA of 6.6x based on a discount of around 10% compared to its peers, the analysts say.
Pan-United Corporation is the largest RMC supplier in Singapore with a market share of around 40% as at end-FY2021.
In their report, Tan and Ong predict that Singapore’s construction industry is set for a strong recovery due to accelerated construction works, easing labour shortage and healthy demand from new projects.
The Building and Construction Authority (BCA) has also forecasted a growth of 11% to 23% y-o-y in construction output for the FY2022, note the analysts.
In addition, the BCA also expects demand for RMC to reach a growth of 7% to 20% y-o-y in FY2022, its highest level since 2017.
“With the rollout of mega infrastructure projects (potentially Changi T5 and the Integrated Resorts expansion), we expect sustained construction demand in Singapore over the next three years,” write Tan and Ong.
In addition, Pan-United, which is a leading producer of high-grade green concrete that is designed to reduce carbon emissions, is also well-placed to blend sustainability and tech into the construction sector.
The company has leveraged its research and development (R&D) capabilities to develop over 300 specialised concrete products since 2012.
On this, the analysts say they “expect increased demand for higher grade concrete in Singapore driven by larger and more complex projects, and greener buildings”.
“Pan-United has also self-developed an in-house digital logistics platform Artificial Intelligence for RMC (AiR), which helped yield cost savings by streamlining operations and cutting manpower wastage,” they note.
In the FY2022, the analysts expect Pan-United’s revenue for concrete and cement (C&C) to grow 21% y-o-y to $692 million as construction activities resume across its key markets.
“Coupled with gradually easing labour shortage, we expect C&C EBITDA margins to sustain at 8.8% in FY2022 (versus FY2021’s 8.7%),” they write.
“This translates to strong earnings per share (EPS) growth of 31% y-o-y in FY2022. Current valuations look attractive at 3.9x FY23F EV/EBITDA, [around] 1 standard deviation below its 10-year historical mean,” they add.
To this end, Ong and Tan believe that a dividend yield of 5.4% is sustainable, assuming dividends of 2.1 to 2.3 cents in the FY2022 to FY2024. This is due to the company’s strong cash-generating capabilities and net cash position, they add.
According to them, a faster-than-expected recovery in construction activities, the successful commercialisation of AiR and continued share buybacks are re-rating catalysts for the counter. Meanwhile, margin pressures should the company fail to pass on higher input costs, as well as a slowdown in the demand for construction are downside risks.
In her March 29 report, SAC Capital analyst Lim Shu Rong has maintained her “buy” call on Pan-United due to the company’s “brightening outlook”.
Lim has also given the company a higher target price of 53 cents from 50 cents previously as Pan-United’s revenue and gross profit for the FY2021 ended December stood largely in line with her estimates.
Pan-United’s net profit of $18.7 million surpassed her estimates by 12% due to the higher share of profits from associates and government grants.
While construction works are gaining pace, with consumption of RMC forecast to come within 12.5 – 14 million cubic metres from FY2021’s 11.6 million cubic metres, cost of raw materials remain a concern, notes Lim.
The price of cement has been rising steadily since July 2021 to $98 per tonne in January, up 3%.
“With coal prices up [around] 178% y-o-y, cement prices are unlikely to correct in the near term. Higher costs will be reflected in RMC prices,” says Lim.
“January’s price of $104 per cubic metre is +10% higher [compared to that of] January 2021’s prices. RMC prices will also be further propped up by robust demand as FY2022 forecasted construction demand returns to FY2019 level of $27 billion - $32 billion,” she adds. “The coming years (FY2023- FY2026) also have an average annual demand of $25 billion - $32 billion and this have yet to include the development of the 2 integrated resorts ($5 billion to $7 billion) and Changi Airport T5,” she continues.
In Vietnam and Malaysia, where Pan-United’s subsidiaries make up 7% of its total revenue, the construction sector in the former is forecasted to grow at a compound annual growth rate (CAGR) of 8.71% in the next five years.
In Malaysia, “we would only get a clearer picture of its spending plan for major infrastructure projects post-election,” says Lim.
“In the meantime, MRT3 Circle Line project of RM30 billion ($9.66 billion) is slated to open for tender this coming May. Timely rollout of this major project would help to lift Malaysia’s construction outlook,” she adds.
In her report, Lim has kept her topline estimate for the FY2022 unchanged. She has, however, upped her earnings estimate to account for a higher share of profit from Pan-United’s associates due to the upward trend in coal prices.
Her target price is pegged to Pan-United’s pre-pandemic ratio of 12.3x for the FY2019.
As at 3.23pm, shares in Pan-United are trading 3 cents higher or 7.79% up at 41.5 cents.
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time of esg taggings 0.07028806791640818
https://www.theedgesingapore.com/capital/brokers-calls/phillipcapital-ups-pan-uniteds-tp-46-earnings-fy2021-results-perform-above
PhillipCapital analyst Terence Chua has kept his “buy” recommendation on Pan-United Corporation as the company’s earnings for the FY2021 ended December stood above expectations.
On the back of the higher earnings, Chua has also upped his earnings estimates for the FY2022 by 11%.
“[This is] on account of the higher demand for ready-mixed concrete brought about by the construction recovery,” Chua writes in his March 14 report.
“Our target price is based on 16x FY2022 P/E, a 15% discount to its 10-year historical average P/E on account of the still uncertain environment,” he adds.
On Feb 22, Pan-United Corporation reported revenue of $310,288 for the 2HFY2021 and earnings of $11.73 million for the same period.
The half-year earnings surged 15.5 times compared to earnings of $759,000 in the corresponding period the year before.
According to Chua, Pan-United’s 2HFY2021 revenue and profit beat his expectations at 60.7% and 76.2% of his FY2021 estimates respectively, thanks to the higher sales from its concrete and cement business, which recovered faster on the back of the faster pace of recovery in the construction sector.
Other positives include the lower-than-expected net gearing, which stood 22% lower than Chua’s forecasts, as well as the higher-than-expected FY2021 distribution per share (DPS) of 1.6 cents.
However, Chua has lowered his gross profit margins (GPM) lower for the FY2022 and FY2023 in anticipation of higher raw materials cost from supply-chain disruptions.
In its FY2021 results, the company reported a slightly weaker GPM as prices for raw materials rose at a faster pace than average selling prices (ASPs).
“Given the strong demand for construction materials in the region, we do not think prices would moderate in the near-term,” says Chua.
“Pan-United also faced disruptions in raw-material supplies and had to search for alternatives. Supplies from new sources require lead times of a month for BCA testing before they can be imported. This hampered its ability to fulfil contracts,” he adds.
Looking ahead, Chua notes that the Building and Construction Authority (BCA) has upgraded its forecast for the demand for construction in 2022, which he sees as an upside for the company.
“With an approximately 40% market share in the industry, we continue to see Pan-United as a key beneficiary of the construction sector recovery. Pan-United’s batching plants still have capacity to take on a 10-15% increase in ready-mixed concrete (RMC) demand in Singapore,” he says.
“Stock catalysts are expected from higher contract volumes and better margins,” he adds.
Shares in Pan-United closed 1.5 cents higher or 4.48% up at 35 cents on March 16, or an FY2022 P/B of 1.06x and a dividend yield of 4.1%.
Photo: Pan-United
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time of esg taggings 0.02751025091856718
https://www.theedgesingapore.com/capital/results/pan-united-corp-announces-earnings-recovery-fy2021
Pan-United Corp announced a net profit of $18.7 million in FY2021, for the 12 months to Dec 31, a marked improvement on the $1m million in net profit in FY2020.
Revenue rose 45% y-o-y, to $586.9 million, on the back of a recovery in the company’s Concrete and Cement which rebounded with the recovery of construction activities in Singapore.
Raw materials, subcontract cost and other direct costs were all higher as was staff cost. The group’s Ebitda increased to $42.9 million in FY2021, versus $27.9 million in FY2020. Both operating and free cash flow generation were strong, resulting in lower bank borrowings and reduced interest expense.
article_here
time of esg taggings 0.023076058831065893
https://www.theedgesingapore.com/news/sustainability/pan-united-and-shell-sign-mou-explore-decarbonisation-solutions-built
Pan-United Corporation and Shell Eastern Petroleum have signed a memorandum of understanding (MOU) on Jan 12 in a bid to explore decarbonisation solutions in the construction and urban solutions industries.
The collaboration is expected to create benefits in terms of decarbonisation in the built environment by creating possible new business models and market opportunities.
The three-year MOU is the first of its kind between both companies, and it outlines the joint effort to identify opportunities in areas including low-carbon and renewable energy products, electric mobility solutions and other digitalisation-enabled solutions.
article_here
time of esg taggings 0.02195036713965237
https://www.theedgesingapore.com/news/sustainability/pan-united-explore-decarbonisation-over-1000-trucks-partnership-surbana-jurong
Pan-United Concrete, a subsidiary of concrete and cement provider Pan-United Corp, has entered into a project development partnership agreement with Surbana Jurong to study the feasibility of using electric and hydrogen fuel cells to power a fleet of more than 1,000 trucks used to move concrete.
In a Jan 5 press release announcing the partnership, Pan-United says the collaboration is in line with its sustainability targets to firstly, offer only low carbon concrete by 2030, secondly, offer carbon-neutral concrete products by 2040 and lastly, become a carbon-neutral ready-mix concrete company by 2050.
As part of the partnership, Surbana Jurong will study and evaluate the potential of decarbonising Pan-United’s fleet of concrete mixer trucks and tipper trucks that currently operate on diesel.
article_here
time of esg taggings 0.025278895162045956
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-mapletree-commercial-trust-wilmar-international-esr-reit-first
Mapletree Commercial Trust Price target: CGS-CIMB “add” $2.18 Bank of Singapore “buy” $2.04 UOB Kay Hian “buy” $2.48
MCT’s prospects still attractive after MNACT’s all-cash option Analysts from CGS-CIMB Research and the Bank of Singapore (BoS) are remaining positive on Mapletree Commercial Trust (MCT) following the introduction of an all-cash option offered to Mapletree North Asia Commercial Trust (MN-ACT) unit holders.
On March 21, the REIT managers of both MCT and MNACT announced the revision of their existing trust scheme agreement with the addition of a third option — a 100% cash consideration at $1.1949 per MNACT unit. Moving forward, this option will also be the default option.
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https://www.theedgesingapore.com/capital/results/wilmar-international-reports-record-2hyf2021-earnings-us114-bil
Wilmar International has reported record earnings of US$1.14 billion for 2HFY2021 ended Dec 2021, up 23.4% y-o-. Revenue in the same period was up 30.1% y-o-y to US$36.3 billion.
For the whole of FY2021, earnings similarly hit a record of US$1.89 billion, up 23.2% from FY2020. Revenue, meanwhile, was up 30.2% to US$60.8 billion.
The company attributes the record earnings to higher margins of its various business segments, even though higher raw material prices offset the gains somewhat.
article_here
time of esg taggings 0.028987676138058305
https://www.theedgesingapore.com/capital/brokers-calls/disconnect-between-cpo-and-share-prices-remain-due-esg-concerns-rhb
RHB Group Research analyst Hoe Lee Leng maintains “underweight” on the plantation sector, as she expects the disconnect between crude palm oil (CPO) and share prices to remain due to environmental, social and governance (ESG) concerns.
She kept a "buy" call for Wilmar International and a “neutral” call for the remaining three Singapore-listed stocks covered.
In a Feb 11 note, Hoe says January production dropped 13.5% m-o-m, but rose 11.3% y-o-y. The m-o-m decline came from Sarawak at 20%, West Malaysia at 12.4% and Sabah at 10.1%.
article_here
time of esg taggings 0.025453750975430012
https://www.theedgesingapore.com/capital/brokers-calls/analysts-remain-underweight-plantation-sector-citing-dampened-valuations-and
Despite expecting the year’s fundamentals of supply to improve with moderation in crude palm oil (CPO) prices in 2H22, RHB Group Research analyst Hoe Lee Leng says valuations will remain dampened by ESG risks.
She maintains “underweight” on the plantation sector, with a "buy" call for Wilmar International and “neutral” call for the remaining three Singapore-listed stocks covered.
Similarly, UOB Kay Hian Research analysts Leow Huey Chuen and Jacquelyn Yow have also maintained their “underweight” rating on the plantation sector as they expect earnings to contract by 24% in 2022.
article_here
time of esg taggings 0.06514432397671044
https://www.theedgesingapore.com/news/reits/legal-proceedings-against-dxc-technology-services-over-payment-default-keppel-dc-reit
The manager of Keppel DC REIT, on March 21 announced that Keppel DC Singapore 1 has commenced a suit against DXC Technology Services Singapore in Singapore’s High Court.
Keppel DC Singapore 1 is the master lessee and appointed facility manager of the data centre located at 25 Serangoon North Avenue 5.
The dispute is said to pertain to DXC’s partial default of payment in connection with the provision of colocation services at the data centre.
DXC has disputed its liability to make payment.
According to the REIT manager, a portion of the revenue from Keppel DC Singapore 1, which is generated from its management of the data centre, is payable to Keppel DC REIT, under the lease and facilities management arrangement between Keppel DC Singapore 1 and Keppel DC REIT.
The revenue includes amounts generated from colocation services provided to customers like DXC.
The amount being disputed is around $14.8 million over a four-year period from April 1, 2021, to March 31, 2025.
The affected occupancy is approximately 0.4% of Keppel DC REIT’s total attributable lettable area as at Dec 31, 2021.
The impact arising from the disputed sum per annum is approximately 2.0% of Keppel DC REIT’s distributable income for the financial year ended Dec 31, 2021.
The dispute is said to not have a material impact on the REIT’s overall financial performance.
The manager adds that despite various commercial discussions and mediation between itself, Keppel DC Singapore 1 and DXC, the parties have not been able to arrive at a mutually acceptable resolution.
Further updates will be provided.
Units in Keppel DC REIT closed 2 cents higher or 0.89% up at $2.28 on March 21.
Photo: TES
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https://www.theedgesingapore.com/news/new-appointments/hsbc-singapore-appoints-chairman-keppel-reit-manager-first-independent-board
HSBC Bank (Singapore) has appointed Penny Goh as its first independent chairman of its board.
Goh’s appointment is effective on Feb 16.
Goh succeeds outgoing board chair Mervyn Fong, who has served as interim board chair since August 2021.
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https://www.theedgesingapore.com/capital/brokers-calls/analysts-keppel-pacific-oak-us-reit-steady-performance
Analysts from DBS Group Research and RHB Group Research are keeping “buy” on Keppel Pacific Oak US REIT (KORE) after the REIT saw distribution per unit (DPU) for the FY2021 ended December grow by 1.8% y-o-y to 6.34 US cents (8.53 cents).
DPU for the 4QFY2021 also increased by 2.6% y-o-y to 1.60 US cents.
The higher DPUs were due to the REIT’s newly-acquired assets in the 2HFY2021, and are in line with the estimates by DBS analysts, Rachel Tan, Geraldine Wong, Dale Lai and Derek Tan.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/analysts-largely-positive-keppel-reit-likely-recovery-office-sector
Analysts from DBS Group Research, Maybank Securities and RHB Group Research are mostly positive on Keppel REIT after it posted its results for the FY2021 on Jan 25 .
For the FY2021 ended December, Keppel REIT reported a distribution per unit (DPU) of 5.82 cents, up 1.6% y-o-y. In the 2HFY2021, the REIT’s DPU fell 1.7% y-o-y to 2.88 cents.
The higher total FY distribution is attributed to accretive acquisitions made in Melbourne and Sydney, as well as Singapore’s Keppel Bay Tower.
article_here
time of esg taggings 0.024531998904421926
https://www.theedgesingapore.com/capital/results/keppel-pacific-oak-us-reit-posts-18-increase-fy2021-dpu-634-us-cents
Keppel Pacific Oak US REIT (KORE) has delivered a DPU of 6.34 US cents for the FY2021 ended December 2021 period, representing a 1.8% increase from 6.23 US cents in FY2020.
Income available for distribution increased by 6.5% y-o-y to US$62.4 million ($83.9 million) from US$58.6 million a year ago.
This came on the back of a 1.2% growth in revenue to US$141.3 million from US$139.6 million, largely due to contributions from 105 Edgeview and Bridge Crossing.
article_here
https://www.theedgesingapore.com/capital/results/keppel-reit-reports-2hfy2021-dpu-288-cents
Keppel REIT has reported a distribution per unit of 2.88 cents for 2HFY2021, down 1.7% y-o-y. Full year DPU, meanwhile, was up 1.6% y-o-y to 5.82 cents.
Net property income attributable to unitholders for the six months ended Dec 2021 was $79.9 million, up 17.5% y-o-y. Property income for the same period was $110.8 million, up 16.9% y-o-y.
Keppel REIT attributes the higher distribution in FY2021 to accretive acquisitions namely the Victoria Police Centre in Melbourne and Pinnacle Office Park in Sydney in 2020, and Keppel Bay Tower in Singapore in May 2021.
article_here
time of esg taggings 0.026997609063982964
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-keppel-dc-reit-trimmed-tps
CGS-CIMB and DBS Group Research analysts observe upbeat FY2021 earnings reported by Keppel DC REIT (KDC), driven by acquisitions, AEIs, and higher occupancy rate.
However, for CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee, they’ve lowered their target price on this stock to $2.70 from $2.78 previously, to take into account higher cost of equity assumptions in view of the increasing interest rate environment.
The analysts, who are keeping their “add” call on KDC, noted that its FY2021 revenue increased 2.1% y-o-y to $271.1 million, driven by asset enhancement initiative contributions from Dublin and Singapore assets, full-year contribution from Kelsterbach and Amsterdam DC, as well as the acquisitions of Eindhoven and Guangdong DC.
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https://www.theedgesingapore.com/capital/results/keppel-dc-reit-reports-2hfy2021-dpu-4927-cents-28-y-o-y
Keppel DC REIT has reported a distribution per unit of 4.927 cents, up 2.8% y-o-y for 2HFY2021 ended Dec 2021. Distributable income for the same period was up 6.6% y-o-y to $87.4 million, on the back of a 4% y-o-y dip in revenue to $135.9 million.
The higher income can be attributed to contributions from new acquisitions such as the Kelsterbach Data Centre in Germany (May 2020), Amsterdam Data Centre (December 2020) and Eindhoven Campus (September 2021) in the Netherlands.
In addition, the completion of Intellicentre 3 East Data Centre (IC3 East DC) development at Intellicentre Campus in Sydney, Australia in July 2021; as well as the completion of asset enhancement initiatives at data centres in Dublin and Singapore in 1Q 2021 helped too.
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https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-mapletree-commercial-trust-wilmar-international-esr-reit-first
Mapletree Commercial Trust Price target: CGS-CIMB “add” $2.18 Bank of Singapore “buy” $2.04 UOB Kay Hian “buy” $2.48
MCT’s prospects still attractive after MNACT’s all-cash option Analysts from CGS-CIMB Research and the Bank of Singapore (BoS) are remaining positive on Mapletree Commercial Trust (MCT) following the introduction of an all-cash option offered to Mapletree North Asia Commercial Trust (MN-ACT) unit holders.
On March 21, the REIT managers of both MCT and MNACT announced the revision of their existing trust scheme agreement with the addition of a third option — a 100% cash consideration at $1.1949 per MNACT unit. Moving forward, this option will also be the default option.
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https://www.theedgesingapore.com/news/reits/eventful-week-reits
Recently, the REIT IPO that did not quite take off was GLP’s logistics REIT with Chinese assets. The book was two-thirds covered by cornerstones and anchors ahead of a potential IPO. That may not have ensured a good post-IPO performance, some market watchers have said, while others pointed out that the demand is an indication of strength.  Whatever the case, the IPO is likely to be postponed for some weeks because of market volatility.
On the other hand, Lendlease Global Commercial REIT’s (LREIT) placement was 3.3 times subscribed, with strong demand from long-only institutional investors and real estate specialist funds, which accounted for more than 80% of the total proceeds.
On Feb 14, LREIT’s manager announced the proposed acquisition of the remaining stake in Jem it did not own, based on an agreed value of $2.079 billion. At that time, LREIT’s manager had indicated that the accretion to distribution per unit (DPU) would be as high as 10% depending on the equity fund raising (EFR) plan.
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https://www.theedgesingapore.com/capital/brokers-calls/rhb-keeps-buy-esr-reit-unitholders-approve-merger
RHB Group Research analyst Vijay Natarajan has maintained his “buy” rating on ESR-REIT after the REIT’s unitholders voted in favour of the merger with ARA LOGOS Logistics Trust (ALOG) on March 21.
The analyst has also kept his target price of 53 cents.
In his report dated March 22, the analyst has not factored in the effects of the merger into his forecasts, but he expects that the merger should contribute positively to the REIT’s distribution per unit (DPU).
“We expect the combined REIT to execute its strategy of portfolio optimisation and asset enhancements, which should lead to a rerating,” Natarajan says. “With a strong and supportive sponsor and a healthy pipeline of assets, we see good growth potential.”
According to Natarajan, with the merger, new economy assets such as high-technology and logistics warehouses will take up 66% of portfolio rental income, as opposed to 47% at present.
The merger between both REITs is slated to be completed by the end of the 1HFY2022. It will result in a combined REIT asset size of $5.4 billion, making the merged REIT, ESR-LOGOS REIT, one of the top 10 Singapore REITs (S-REITs) by free float market cap.
Following the merger, the REIT’s sponsor ESR Cayman will remain as a key shareholder with 11.2% of combined entity and the REIT manager.
The analyst likes the merger for three reasons.
Firstly, the sizeable new economy and well-diversified portfolio will reduce concentration risks while resolving the conflict of interest from overlapping acquisition mandates with the sponsor.
Secondly, it lowers the cost of capital, with the interest cost alone expected to fall by approximately 100 basis points post-merger.
Finally, the merger offers opportunities to transform its portfolio, by accelerating the divestment of its older, shorter-tenure assets and reinvesting the proceeds into modern new economy assets in the Asia-Pacific, with an estimated US$2 billion ($2.7 billion) worth of sponsor pipeline assets.
As at 3.01pm, units in ESR-REIT are trading at 1 cent up or 2.38% higher at 43 cents, at a price-to-book ratio of 1.07x and dividend yield of 7.2%.
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https://www.theedgesingapore.com/news/reits/esr-reit-receives-approval-unitholders-merger-ara-log-and-proposed-issue-new-units
Unitholders in ESR-REIT voted overwhelmingly in favour of the merger with ARA LOGOS Logistics Trust (ALOG) at an extraordinary general meeting (EGM) held on March 21.
Following the EGM, the manager of ESR-REIT revealed that shareholders holding 98.57% of units within the REIT voted for the merger.
The percentage represents some 1.205 billion of units within ESR-REIT’s total of 1.222 billion units.
During the EGM, shareholders holding 98.44% of units in ESR-REIT also voted in favour of the proposed issue of new units to ALOG’s unitholders at an issue price of 49.24 cents per unit as part of the consideration for the merger.
Units in ESR-REIT last traded at 42 cents before its trading halt on the morning of March 21.
Photo: ESR-REIT
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https://www.theedgesingapore.com/capital/brokers-calls/buy-esr-reit-it-inches-closer-merger-ara-logos-logistics-trust-analysts
The extraordinary general meeting (EGM) for the ESR-REIT and ARA Logos Logistics Trust (EREIT-ALOG) merger has been set for March 21. CGS-CIMB Research analysts Eing Kar Mei and Lock Mun Yee see more merits from the REITS merging than on a standalone basis.
In a March 7 note, Eing and Lock are maintaining “add” on both REITS, which are trading at 6-7% distribution per unit (DPU) yields.
CGS-CIMB sees a target price of 92 cents for ARA Logos Logistics Trust, against an 81.5 cent close on March 6; and a target price of 50 cents for ESR-REIT, against a 42 cent close that same day.
“Based on the revised offer, ESR-REIT is offering 97 cents per ALOG unit (10% cash and 90% units), which values ALOG at 1.45x P/NAV (based on an issue price of 49 cents). Based on ESR-REIT’s current price of 42 cents, ESR-REIT is still valuing ALOG at 84 cents, or 1.26x P/NAV, above ALOG’s five-year historical, one-year historical and current P/NAVs of 1.12x, 1.26x or 1.2x respectively,” write the CGS-CIMB analysts.
For the merger to go through, ESR-REIT requires more than 50% of the total number of votes cast from shareholders, while ALOG requires more than 50% of total number of votes cast and at least 75% in value of ALOG units. If the merger is approved, the scheme will be effective by end April 2022.
The issue of conflict of interest arose after the proposed ARA acquisition by ESR Group was completed on Jan 20. With both ESR-REIT and ALOG now sharing a common sponsor and having overlapping mandates, there will be conflicts of interest if both REITs continue to operate as different entities, write Eing and Lock.
“For instance, both REITs may have to compete for the same assets from the sponsor/third parties in the future. We understand that both REITs were often the direct competitive bidders for the same assets recently. In addition, the sponsor has to split its operational and finance sources between the two REITs, and both REITs may also need to compete for the same pool of tenants, all of which could impact the growth of both REITs negatively,” they add.
Eing and Lock believe a merger brings more benefits, such as diversification and ability to grow, in the longer term, in particular when other REITs are also scaling up their portfolio size for diversification and to compete for growth. “We think ESR-REIT is valuing ALOG fairly and the merger provides 12.8% and 5.3% DPU and NAV accretion, respectively, to ALOG. Although the deal is DPU accretive but NAV dilutive for ESR-REIT, ALOG’s portfolio could strengthen the portfolio of the merged entity with its pure logistics assets in Singapore and freehold land exposure in Australia.”
They add that logistics assets in both countries have been seeing “strong demand” and an increase in valuation would offset ESR-REIT’s initial NAV dilution from the merger in the longer term.
Meanwhile, RHB Group Research analyst Vijay Natarajan is maintaining “buy” on ESR-REIT, with a target price of 53 cents, higher than CGS-CIMB’s 50 cents.
“ESR-REIT is inching closer to its merger with ARA Logos Logistics Trust, with proxy advisors who opposed previous deal terms now recommending to vote in favour of the revised offer. We maintain that a sizeable, well-diversified portfolio with unwavering backing from its sponsor is crucial for the REIT to navigate increasing market uncertainties. Operationally, it remains resilient, benefitting from the increase in industrial sector demand,” he writes in a March 8 note.
ESR-REIT’s operating metrics continue to improve, says Natarajan. Its occupancy rate in 4QFY2021 rose by 0.8 percentage points q-o-q to 92%. This is the highest since 1QFY2019, on strong leasing demand from the logistics and engineering sectors.
Its rental reversion also narrowed to -1.7% (3QFY2021: -2.2%), excluding certain large renewals for the business parks segment which is facing some pressure, it would have been +3%.
Management is guiding for flattish reversion rates this year. Net gearing dipped to 40% (FY2020: 41.6%), with 92% of debts hedged against interest rate hikes for the next two years.
As at 2.55pm, units in ARA Logos Logistics Trust are trading flat at 81.5 cents; while units in ESR-REIT are trading flat at 42 cents.
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https://www.theedgesingapore.com/capital/ma/proxy-advisor-recommends-vote-merger-between-alog-and-esr-reit
On Mar 4, Institutional Shareholder Services is recommending that unitholders of ARA LOGOS Logistics Trust to vote in favour of resolutions put forward in the trust scheme. These resolutions are to vote for a change in the trust deed, and secondly to vote for the scheme, that is to merge with ESR-REIT.
Karen Lee, CEO of ALOG’s manager says that the proposed transaction is not a sale process of ALOG or its assets. “ALOG Unitholders are not selling out their units, but instead rolling over into an enlarged platform with a strong sponsor, while crystalising part of their investment returns in cash. The enlarged platform with access to the sponsor’s new economy pipeline will create unparalleled and long term sustainable value for our unitholders,” she has said on a number of occasions.
Lee adds that since the proposed merger was announced in October last year and no other offer has emerged. ALOG’s manager is required to consider any offer that comes along after the ESR-REIT offer. The ESR-REIT offer is a result of the merger between ESR Cayman and ARA Asset Management. ARA had a controlling stake in LOGOS, ALOG’s sponsor. Hence ESR inherited LOGOS and now indirectly owns ALOG’s manager and around an 11% stake in ALOG.
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time of esg taggings 0.026740818982943892
https://www.theedgesingapore.com/news/reits/growth-esr-reit-and-ara-logos-likely-be-negatively-impacted-if-conflicts-interest-not
The manager of ESR-REIT, on Feb 9, released answers to a list of frequently asked questions (FAQ) in relation to the proposed merger of ESR-REIT and ARA LOGOS Logistics Trust (ALOG).
Within the list, the REIT manager explained that growth for both REITs are likely to be “negatively impacted” should the conflicts of interest arising from being under a common sponsor are not resolved.
Following the completion of the proposed ARA acquisition on Jan 20, the ESR Group, which is the sponsor of ESR-REIT, is now an indirect majority controlling shareholder of the LOGOS group.
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time of esg taggings 0.02568369498476386
https://www.theedgesingapore.com/capital/results/esr-reit-reports-27-lower-dpu-0721-cents-4qfy2021
The manager of ESR-REIT has reported a distribution per unit (DPU) of 0.721 cents for the 4QFY2021 ended December, 2.7% lower than DPU of 0.741 cents in the same period the year before.
The fourth quarter’s DPU has brought FY2021 DPU to 2.987 cents, 6.7% higher than the DPU of 2.80 cents in the FY2020.
Gross revenue in the FY2021 grew 5.0% y-o-y to $241.3 million mainly due to the absence of Covid-19 rental rebates to tenants. The higher revenue was also attributable to contribution from 46A Tanjong Penjuru, as well as the leasing up of certain properties during the year.
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time of esg taggings 0.026848652167245746
https://www.theedgesingapore.com/capital/brokers-calls/rhb-recommends-ara-logos-unitholders-take-profit-after-sweetened-merger-offer
RHB Group Research analyst Vijay Natarajan has recommended unitholders of ARA LOGOS Logistics Trust (ALOG) “take profit” with an unchanged target price of 95 cents representing a yield of 6%.
Natarajan’s report on Jan 24 comes after both REIT managers jointly announced that ESR-REIT will pay a higher scheme consideration of 9.7 cents in cash for each ALOG unit on Jan 22.
The rest will be paid in 1.7729 new ESR-REIT units at an issue price of 49.24 cents per unit.
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time of esg taggings 0.031101559987291694
https://www.theedgesingapore.com/capital/results/ara-logos-logistics-trust-reports-2hfy2021-dpu-2464-cents-down-158-y-o-y
ARA LOGOS Logistics Trust has reported a distribution per unit of 2.464 cents for its 2HFY2021, down 15.8% y-o-y, because of a larger unit base. For the whole of FY2021, DPU was 5.034 cents, down 4.1%.
Net property income for the same six-month ended Dec 2021 period was up 16.1% y-o-y to $53.5 million. Revenue, meanwhile, was up 15.1% y-o-y to $68.7 million, lifted by contributions from newly-acquired assets.
Karen Lee, CEO of ALOG’s manager, says that the REIT has continued to deliver a “stable and resilient performance” for FY2021, despite the ongoing pandemic.
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time of esg taggings 0.0416381370741874
https://www.theedgesingapore.com/capital/ma/alog-gets-14x-pnav-offer-following-proxy-advisers-comments-egm-postponed-mid-march
On Jan 14 and 15, proxy adviser Glass, Lewis & Co and Institutional Shareholder Services (ISS) had advised unitholders of ARA LOGOS Logistics Trust (ALOG) to vote against a merger with ESR-REIT because of pricing.
Glass Lewis had said, “while Glass Lewis does not question merits [of the merger], we believe the terms of the scheme are unfair to ALOG unitholders because it implies a discounted market valuation for ALOG units.”
Glass Lewis reasons that ALOG’s volume weighted average price (VWAP) was much higher for ALOG than what was used in the ratio. The Scheme terms were not compelling for ALOG unitholders and most of the benefits of the merger would accrue to ESR-REIT, Glass Lewis had indicated.
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time of esg taggings 0.02548976498655975
https://www.theedgesingapore.com/news/reits/ara-logos-logistics-trust-receive-higher-scheme-consideration-esr-reit
The manager of ARA LOGOS Logistics Trust (ALOG) has announced on Jan 22  that ESR-REIT will pay a higher scheme consideration in relation to the proposed merger between the two REITs by way of a trust scheme of arrangement.
ESR-REIT will now pay 9.7 cents in cash for each ALOG unit, and the rest through the allotment and issue of 1.7729 new ESR-REIT units (the consideration units) at an issue price of 49.24 cents per consideration unit.
Previously the scheme consideration comprised of 9.5 cents in cash, and the rest in units through the allotment and issuance of 1.6765 new ESR-REIT units at an issue price of 51 cents for each consideration unit.
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time of esg taggings 0.02382488502189517
https://www.theedgesingapore.com/news/reits/esr-reit-divests-28-senoko-drive-12-mil
The manager of ESR-REIT has divested 28 Senoko Drive, a single-storey general industrial building, for a sale consideration of $12.0 million.
The REIT entered into an agreement with Tat Seng Packaging on Jan 10.
The divestment of the property represents an 8.4% discount to the fair value of the property at $13.1 million. It is not expected to have a material impact on ESR-REIT’s net asset value (NAV) and net property income (NPI) for the FY ending Dec 31.
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time of esg taggings 0.022964081959798932
https://www.theedgesingapore.com/capital/ma/riverstone-holdings-acquires-6-parcels-land-perak-rm176-mil
Glove manufacturer Riverstone Holdings annnounced that its wholly-owned subsidiary Eco Medi Glove is acquiring six parcels of leasehold industrial lands with a total land area of about 18.33 acres located in an industrial area in Taiping, Perak, Malaysia.
The consideration of RM17.57 million ($5.66 million) was arrived based on commercial negotiation on a “willing buyer, willing seller” basis taking into account, inter alia, the market value of similar property in that area. This acquisition will be funded via the group's internal resources.
According to the group, this land space will help support its expansion of production capaity for the gloves and group's operations.
Shares in Riverstone closed at 99 cents on Mar 21.
Photo: Bloomberg
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https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-yangzijiang-shipbuilding-grab-holdings-sia-engineering-and
Yangzijiang Shipbuilding (Holdings) Price target: Citi Research “buy” $1.98 DBS Group Research “buy” $2.15
Share price ‘will re-rate’ upon successful spin-off Analysts from Citi Research and DBS Group Research have kept their “buy” calls on Yangzijiang Shipbuilding (Holdings) (YZJ) after the component stock of the Straits Times Index announced that it had increased the share capital of its proposed fund management and investment business to $4.3 billion. The analysts also believe that YZJ’s share price will re-rate following the successful completion of the proposed spin-off.
On March 25, YZJ said that it had increased the share capital of Yangzijiang Financial Holding (YZJFH), the entity that will soon be spun off from YZJ, to $4.3 billion comprising 3.95  billion shares, or $1.08 per share. YZJFH will be headed by Ren Yuanlin, former executive chairman of YZJ and father of current chairman and CEO Ren Letian.
The amount is exactly the same as guided by YZJ’s management during the recent FY2021 ended December results and does not come as a surprise, notes Citi analyst Jame Osman. “More importantly, we believe the move is an affirmation of YZJ’s intent to crystallise value via the spin-off, given that its core shipbuilding business is currently trading at a deep valuation discount, in our view,” the analyst writes in his report on March 27.
“As we previously flagged, at YZJ’s current valuation, the market is essentially assigning almost zero residual value for YZJ’s core shipbuilding business versus its past 10-year through-the-cycle mean of 5.4x P/E.”
“Even if we ascribe a more conservative value of 0.5x P/B multiple to its financial assets, it would yield an implied FY2022 P/E of 7x for its shipbuilding business,” he adds. “We continue to believe that a successful spin- off of its investment arm could drive a potential re-rating of YZJ on the basis of improved earnings quality and attract investors seeking more direct exposure to the company’s core shipbuilding business.”
So far, the valuation of the proposed entity has been the main concern for investors with the distribution of the shares of the new entity in specie to existing YZJ shareholders, in which some investors are concerned of a potential sell-off and valuation de-rating.
“We think these concerns may be overdone, considering that 90% of YZJ’s financial assets currently are liquid; classified under current assets. Management had flagged that it is targeting a potential valuation of 1x P/B. Ultimately, the shares of YZJFH could trade on a yield basis,” says Osman.
“Little is known at this stage in terms of [its] potential income distribution, although management has outlined broad plans for the asset management business and its structure,” he adds.
To Osman, YZJ has strong medium-term earnings visibility and momentum, with its record order book and delivery slots filled till 2024. The group also has a positive near-term industry outlook; the potential spin-off of its debt business is a key catalyst to its share price re-rating.
Osman has given YZJ a target price estimate of $1.98 based on a sum of the parts (SOTP) valuation methodology.
“Debt investments currently account for about 30% of the group’s total assets. We have accorded a 13x P/E multiple, a slight discount to +1 standard deviation historical mean, to YZJ’s shipyard operations given lower expected earnings volatility going forward as the shipping industry recovers; and also taking into account that: we expect the group to remain profitable, with respectable ROEs or return on equities (in excess of its peers); and to recognize significant strides the group has made in market share gains,” he writes.
“We value the group’s debt investments at 0.5x book, a slight discount to trading valuations of Chinese banks (0.7x) taking into account YZJ’s less developed credit controls when compared to banks,” he continues.
In his report, Osman sees weaker-than-expected margins from orders secured during the downturn disappointing contract-win quantum/or significant number of order cancellations; and the execution risk of projects as key downside risks to YZJ’s share price performance.
In a note dated March 27, DBS Group Research has given YZJ a target price estimate of $2.15, which values YZJFH at 0.7x P/B of 77 cents. The remaining shipbuilding-related business is valued at $1.38.
“Assuming fair value of YZJFH at 77 cents, Yangzijiang’s current share price of $1.46, only value shipbuilding-related business at 69 cents per share, implying unwarrantedly low valuation of 0.8x P/B and [an estimated] 6x P/E despite 13% ROE and potential upside to 4% dividend yield,” says the brokerage.
In its note, the brokerage believes that YZJ is set to re-rate closer to its target price of $2.15 following the completion of the spin-off.
If all goes to plan, the listing of YZJFH could be completed by end-April or early May this year, says the brokerage.
As at 4.53pm, shares in YZJ are trading 3 cents higher or 2.055% up at $1.49. — Felicia Tan
Grab Holdings Price target: Maybank Securities “buy” US$4.32
Grab’s risk reward deemed ‘attractive’
Maybank Securities analyst Lai Gene Lih has initiated a “buy” call on Grab Holdings with a target price of US$4.32 ($5.88). The target price offers a potential upside of 30% to Grab’s last-closed share price of US$3.32 as at March 25.
Lai’s report on March 28 comes after the NASDAQ-listed counter saw its shares fall some 70% since its Spac merger in December 2021.
According to the analyst, Grab’s risk-reward is deemed “attractive” in the next 24 months as it strives for profitability.
On Dec 2, 2021, shares in Grab made its debut on the Nasdaq, opening at US$13.06. The counter ended the day with its shares trading at US$8.75, down more than 20%. Lai sees Grab as a beneficiary of the economic digitisation and rising affluence in Southeast Asia and that its superapp model drives strong retention among its users. He also says that the one-year retention of users who use over three offerings stands at a retention rate of 86% compared to the 37% of users who use just one offering. “This makes Grab more efficient with incentives, which we see as key to its ability to achieve profitability over time,” writes Lai.
Grab has given a total of US$80 in incentives per monthly transacting users in 2019; US$74 in 2021 and is expected to give US$65 in 2025. Its strong hyperlocal executive across Southeast Asia’s diverse countries, which allows it to scale its user base, is another positive. “Grab has localised ‘boots-on-the ground’/ app-features/ transport modes, and even has its own proprietary maps and mapping technology to boost transit efficiency,” adds Lai.
In addition, Grab’s mobility offerings reduce travel time for its users compared to public transportation. For instance, it has reduced travel time for 20% of its users in Thailand and 70% in the Philippines. Lai expects the region’s economic reopening to drive the recovery of Grab’s mobility segment.
He continues: “Despite loosening restrictions, Grab observes deliveries becoming integral to daily life (average order value +41%/ transactions per monthly transaction user or MTU +28% versus pre-Covid-19).” Lai has also projected a mobility gross merchandise value (GMV) CAGR of 27% for the FY2021 ended December 2021 to FY2025, and has an estimated normalised deliveries GMV CAGR of 28% for the same period. Normalised deliveries in FY2021 saw a 56% y-o-y increase, he adds.
However, any price wars from Grab’s competitors or higher-than-estimated incentives may hurt Grab’s profitability, warns Lai. “Rising inflation and/or regulatory changes that require pension contributions by Grab to driver-partners could also hurt its path to profitability.” Furthermore, a resurgence of Covid-19 related lockdowns is a risk for mobility. Finally, co-founder Anthony Tan has 63% of voting rights (and owns 6%), which may create risks for minority shareholders who may find it difficult to exercise control over the company’s direction, says Lai. He has forecast GMV and net revenue CAGR of 27% and 31% over FY2021 to FY2025 respectively. “We are projecting Grab to deliver adjusted Ebitda/Patmi break-even by FY2024 and FY2025, respectively,” he says. “As regional economies reopen, stronger than expected mobility segment recovery may be a catalyst.” — Felicia Tan
SIA Engineering Price target: UOB Kay Hian “buy” $2.80
Preferred proxy to ride Singapore’s aviation recovery
UOB Kay Hian analyst Roy Chen has re-initiated a “buy” recommendation on SIA Engineering with a target price of $2.80 as the industry’s recovery is “well on track” and SIA Engineering is positioned in a faster lane of recovery compared to peers whose financial performances are more geared to the relatively laggard passenger volume growth.
Chen adds that SIA Engineering is set to be first among the local aviation-related companies to report positive core earnings, with an earnings estimate of $92 million for the FY2023 ending March 2023, which will be equivalent to 57% of FY2019, the full year before the pandemic hit.
The company is also well positioned to resume dividend payment in as early as FY2023. This is considering its earnings recovery and strong balance sheet carrying some $679 million in net cash. “We do not rule out the possibility of a special payout by FY2024, given its major shareholder Singapore Airlines’ (SIA) cash needs for mandatory convertible bond (MCB) redemption,” Chen adds.
Moreover, SIA Engineering’s various joint ventures across the region are set for recovery too, as airlines contract out more work before the impending pick up heightened demand with full recovery of the aviation industry. This has been made possible with SIA Engineering’s strong business development foundation and ties with the major engine makers, says Chen. Some risks the analyst notes include events that disrupt the sector’s recovery and increase competition for SIA Engineering’s maintenance, repair and overhaul (MRO) business. — Chloe Lim
Singapore Exchange Price target: RHB Group Research “neutral” $10
SGX’s ‘volatile times’ could imply short-term benefit RHB Group Research Shekhar Jaiswal has kept a “neutral” rating on Singapore Exchange (SGX) with an increased target price of $10, from $9.80.
“While we are positive on SGX’s long-term growth prospects from its latest acquisitions and potential pipeline of new listings, we remain concerned about the lack of near-term re-rating catalysts,” he writes. The analyst notes that continued global macroeconomic uncertainty could in fact lead to better-than-expected trading volume in the near term.
With the continuing Russia-Ukraine crisis causing elevated geopolitical tensions, this has in turn created heightened price volatility in global equity markets, with SGX seeing increased trading activity in February.
The securities daily average value (SDAV) increased 21% y-o-y to $1.6 billion, bringing the YTD SDAV to $1.2 billion for FY2022 ending June, in line with the analyst’s FY2022 SDAV estimates of $1.2 billion. SGX’s derivatives segment also saw an uptick in trading activity, with the average daily trading volume (DDAV) of 1.03 million.
In addition, the US Federal Reserve has started the cycle for higher interest rates with a 25 basis points (bps) interest rate hike in the Federal Funds Rate in March. Jaiswal expects another five to six interest rate hikes this year that could create scope for higher treasury income for SGX.
However, Jaiswal has some concerns as the exchange’s cost is “elevated”. Meanwhile, revenue contribution from its recent acquisitions could take time to scale up. There also appears to be stiffer competition from Hong Kong Exchange’s bid to grow its derivatives business which risks taking away trading volume from SGX.
Finally, with the full induction of New York-listed Sea into MSCI Singapore, securities market turnover could remain soft as some trading volume could move away from SGX-listed stocks to Sea.
On the other hand, Jaiswal foresees a number of upside risks that include higher-than-estimated trading volume from the potential pipeline of ETFs, REITs and spac listings. Overall, the analyst views the stock’s valuation as “reasonable” amid modest earnings growth, as it is trading at an FY2022 P/E of 23.4x, above its historical average, while offering a modest yield of 3.3% that is lower than the Straits Times Index’s yield of 4%. — Chloe Lim
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time of esg taggings 0.052183634135872126
https://www.theedgesingapore.com/capital/brokers-calls/uobkh-maintains-its-buy-call-yangzijiang-shipbuilding-following-better
Yangzijiang Shipbuilding’s “better than expected” earnings for FY2021 ended Dec 31 2021 has pushed UOBKayHian (UOBKH) analyst Adrian Loh to maintain his “buy” call on the counter, at a revised target price of $1.95.
This is down 5 cents from his previous $2.00 call, but is expected to give the counter a 41.4% upside from its $1.38 price, Loh writes in a Mar 1 note.
His lower target price follows a small downgrade of 2% in his Earnings Per Share (EPS) forecast for 2022 due to anticipations of a margin compression in the shipbuilding segment in 1HFY2022.
“We use a target P/E (price-to-earnings) multiple of 9.3x (1 standard deviation above Yangzijiang’s five-year average) which is applied to our 2022 EPS estimate,” explains Loh.
At his target price, the counter would be trading at a price-to-book (P/B) of 0.9x, “which we believe is fair,” he mulls.
Loh notes that the stock remains inexpensive as it is trading at “2022 multiples of 6.2x P/E, 2.6x EV/EBITDA and 0.6x P/B”. He adds that Yangzijiang’s net cash per share of 43 cents as at end 2021 equates to 31% of its current share price.
The shipbuilder’s revenue and PATMI (profit after taxes minus interests) “exceeded expectations” by coming in at RMB17 billion ($3.7 billion) (+13% y-o-y) and RMB3.7 billion (+47% y-o-y) respectively.
The bottom line was helped by forex (foreign exchange) hedging gains, reversals of impairments and higher interest income.
However, the company’s shipbuilding margins fell h-o-h to 10.8% in 2HFY2021 from 13.5% in 13.5% in 1HFY2021 due to progressive construction of ships with lower margins, higher steel prices and a stronger RMB vs USD.
For reference, the shipbuilder had delivered 50 vessels in 2021 (up from 45 vessels in 2020), of which 27 was in 2HFY2021.
The company is looking to enjoy a growth in its earnings, thanks to a target delivery of 60 ships this year. This will come alongside shipbuilding margins of 13% to 15%, notes Loh.
“Yangzijiang’s management guided for margins to remain in the low teens in 1HFY22 and once its low margin-contracts are completed, its margins should trend higher in 2HFY22,” the analyst says.
This comes as steel plate prices have stabilised at RMB6,000/tonne, below the peak of around RMB7,000/tonne. While the management is not expecting material price increases this year, Loh says that its shipbuilding contracts – which were struck when steel prices were around RMB6,500 – 7,000/tonne – are expected to be more profitable.
Meanwhile, the shipping business is expected to continue performing strongly in 1HFY2022  given its young fleet with an average age of eight years. The gleet has a relatively low carrying value of RMB2.18 billion or only US$18 million per vessel.
Back in 2021, Yangzijiang’s fleet of 26 vessels generated 40% gross margin, on the back of a 32% increase in revenue. The company had also sold two vessels and recognised a gain of RMB70 million in FY2021.
Looking ahead, the shipbuilder is seemingly on track to spin-off its investment business onto the mainboard. The company is targeting a valuation of RMB20 billion for this business, which was at its book value as at end 2021.
Yangzijiang’s upcoming plans for this segment include transferring “25% of its total assets of RMB20 billion out of China to Singapore and acquire a Capital Markets Services license for wealth and investment management, with the ultimate aim of managing its own as well as third party funds,” says Loh.
“Although 80% of its investments are currently in debt and private equity, Yangzijiang plans to reposition the portfolio by going up the risk curve into private debt, credit and equities, as well as public credit and equities, and plans to invest around 40% of its portfolio outside China,” he adds.
Shares in Yangzijiang Shipbuilding closed up 2 cents or 1.43% at $1.42 on Mar 9.
Cover image: Yangzijiang Shipbuilding
article_here
time of esg taggings 0.04282184597104788
https://www.theedgesingapore.com/capital/results/hmcs-fy2021-net-profit-surges-following-recovery-and-low-base-effect-2020
Healthway Medical Corporation's FY2021 revenue rose 43.6% y-o-y to $139.9 million in FY2021. The increase in revenue from the Primary Healthcare Segment was driven by higher patient volumes as compared to FY2020. This was further supplemented by revenue contributions from vaccination, Covid-19 Polymerase Chain Reaction (PCR) and serology testing projects, the company said. The revenue from the Specialist Healthcare Segment increased due to higher demand for specialist services compared to FY2020, which was impacted by circuit breaker measures imposed by the Singapore Government during FY2020. The Group’s Ebitda grew 54.5% y-o-y from $14.4 million in FY2020 to $22.2 million in FY2021. Profit After Taxgrew 230.7% from $3.2 million in FY2020 to $10.7 million in FY2021. The Group’s cash and cash equivalents increased to $33.6 million.
Healthway Medical will continue to offer Covid-19 Polymerase Chain Reaction (PCR), serology and Antigen Rapid Testing (ART) across 51 of its participating Public Health Preparedness Clinics (PHPC), as regular testing remains essential in minimising the transmission of COVID-19 and managing the pandemic. Healthway Medical also runs two Quick Test Centres (QTC) where the public can take a selfadministered ART supervised by an approved COVID-19 test provider.
Strengthening the Group’s Healthcare presence Healthway Medical continues to forge ahead with its plans to expand its footprint of GP clinics and meet the growing needs of the Primary Care sector, enabling hospitals and the tertiary healthcare system to focus their resources on complex conditions and emergency cases. In September 2021, Healthway Medical invested in a Primary Healthcare chain operating nine clinics, with the majority of clinics located primarily in key locations in Singapore’s commercial business district. With this acquisition, Healthway Medical becomes the largest outpatient clinic chain in Singapore.
article_here
time of esg taggings 0.025785319041460752
https://www.theedgesingapore.com/capital/brokers-calls/marco-polo-marine-heads-toward-greener-path-rhb
RHB Group Research analyst Jarick Seet has kept his “buy” rating on Marco Polo Marine (MPM) with the same target price of 4 cents, in light of the company’s increased proclivity towards expanding and diversifying towards a greener initiative.
According to Seet, MPM has been actively looking into renewable energy projects– a step beyond the oil and gas industry. As of 1QFY2022 ended September 2022, 20% of MPM’s utilised vessels are working on offshore windfarm projects in Taiwan.
“We believe that MPM will expand its operations in Taiwan, and will likely look to double its chartering fleet in this space by end 2QFY2022 – then have at least 50% of its fleet servicing the renewable energy sector by 2QFY2023,” says the analyst.
A key highlight from MPM is also that a MP S80-20 Service Operation Vessel (SOV) and a S83-21 Commissioning Service Operation Vessel (CSOV) are expected to service the global offshore wind farm market, in addition to being the first SOV and CSOV designed in Asia, writes the analyst.
“The SOV will function as a mother ship for wind turbine technicians performing maintenance and service work at offshore wind farms, while the CSOV is designed to support commissioning works during the construction of offshore wind farms, as well as their maintenance operations,” explains Seet.
The push for a greater green initiative on part of MPM is clear with the acquisition of Taiwan-based PKR Offshore, that will add two offshore supply vessels (OSVs) to the group, boosting MPM’s fleet size to 13 OSVs. Of the 13, four will service the windfarm sector in Taiwan, according to Seet.
Moreover, MPM’s vessels will be designed to be equipped with greener features, such as  hybrid battery-based energy storage systems, enhanced automation and drone-equipped capabilities. The use of these green features stands to cut the amount of fuel consumption and emissions by up to 15-20%, as compared to that of a non-diesel electric hybrid vessel, writes Seet.
As crude oil prices have been recovering strongly these days, MPM is seeing an improvement in ship charter utilisation rates and shipyard operations. “With the Covid-19 situation in Taiwan improving, this will likely speed up the progress of its winning renewable energy projects,” Seet says. “We also believe that the continued recovery will be positive for MPM.”
As at 2.44pm, shares in MPM are trading flat at 2.9 cents with an FY2022 P/B ratio of 0.8x.
article_here
time of esg taggings 0.03235684800893068
https://www.theedgesingapore.com/news/offshore-marine/marco-polo-marine-co-developing-first-sov-and-csov-designed-asia
Marco Polo Marine is co-developing two new specialised offshore wind service, operation and maintenance vessels with green tech ship design company Seatech Solutions International to service the global offshore wind farm market.
The vessels are the MP S80-20 Service Operation Vessel (SOV) and the S83-21 Commissioning Service Operation Vessel (CSOV). When completed, these vessels will be the first SOV and CSOV designed in Asia, the company said in a statement.
The SOV functions as a mother ship for wind turbine technicians performing maintenance and service work at offshore wind farms, while the CSOV is designed to support commissioning works during the construction of offshore wind farms, as well as their maintenance operations.
The SOV and CSOV will be constructed with a focus on energy efficiency, in line with environmental sustainability targets. Equipped with a full suite of daughter craft, elevator towers and skidding systems, the vessels will be future-ready with hybrid battery-based energy storage systems, enhanced automation and drone-equipped capabilities.
Marco Polo Marine said these features will cut fuel consumption and emissions by up to 15%-20% as compared to a non-diesel electric hybrid vessel.
Both vessels have 3D-motion compensated crane and gangway, while the launching, landing and storing of drones are incorporated in each vessel’s design and workflow. The SOV and CSOV can accommodate up to 60 persons and up to 110 persons respectively.
Marco Polo Marine CEO Sean Lee said the project showcases the company’s established track record in constructing Offshore Supply Vessels as well as its operational expertise in servicing the offshore wind farm market.
“Essentially, the SOV and CSOV represent a milestone and a giant leap forward for the offshore maritime industry, as it transitions to fuels with a lower or minimal carbon footprint. This project brings together different industry players with aligned values to cut greenhouse gas emissions, which dovetails with global and Singapore government initiatives to combat climate change.”
Shares in Marco Polo Marine closed flat on March 16 at 2.8 cents.
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time of esg taggings 0.07245365786366165
https://www.theedgesingapore.com/news/deals-joint-ventures-alliances/marco-polo-marine-signs-mou-co-develop-worlds-first-delivery
Marine logistics company Marco Polo Marine has signed a memorandum of understanding (MOU) with F-drones to co-develop the world’s first large-scale, electric aerial delivery drones for offshore wind farms.
F-drones is a Singapore-based company that develops large scale autonomous delivery drones.
The partnership will see Marco Polo and F-drones co-develop drones that are customised for development in the Asia-Pacific region. The drones will send supplies and critical items to offshore wind installations.
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time of esg taggings 0.02484357706271112
https://www.theedgesingapore.com/capital/results/marco-polo-marine-sees-y-o-y-growth-revenue-and-gross-profit-1qfy2021-cautiously
Integrated marine logistics company Marco Polo Marine has recorded a y-o-y improvement in its 1QFY2021 ended Dec 31 2021.
This follows y-o-y growth in its revenue and gross profit that were driven by both its shipyard and ship chartering segments, the group announced in a voluntary business update on Feb 21.
Shipyard operations grew on the back of higher ship repair and ship building activities.
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time of esg taggings 0.023050196934491396
https://www.theedgesingapore.com/news/offshore-marine/marco-polo-marine-completes-extension-dry-dock-eyes-higher-recurring-ship
Marco Polo Marine has completed the extension works on its dry dock 1, lifting the company’s capacity for ship repairs by up to 20%.
The move will help the company grow a bigger stream of recurring income from ship repairing operations, with between 50 and 70% of the business from repeat customers.
The dry dock was extended to 240 metres from 150 metres. Construction started in July 2021 and was funded by internal resources.
article_here
time of esg taggings 0.025256003951653838
https://www.theedgesingapore.com/capital/ma/marco-polo-marine-acquires-pkro-offshore
Marco Polo Marine announced that its joint venture company (JVCo) Oceanic Crown Offshore Marine Services has entered into a share purchase agreement with Kerry TJ Logistics and Posh Investment Holdings (Taiwan) to acquire the entire share capital of PKR Offshore (PKRO).
The JVCo, incorporated by the group’s indirect, wholly-owned subsidiary, Marco Polo Offshore and Taiwanese company Shengfan, aims to expand the group’s offshore and marine business in Taiwan by supporting the country’s offshore wind farm projects. The JVCo is 51% owned by Shengfan and 49% owned by Marco Polo Offshore.
PKRO is part of the POSH Kerry Renewables joint venture, a unique one-stop solutions provider for the offshore renewables sector that offers a comprehensive suite of services across the entire life cycle of offshore wind projects. The acquisition will add another two vessels to the group’s fleet, reinforcing its capacity to service the offshore wind farm market.
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time of esg taggings 0.02656312589533627
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-grab-marco-polo-marine-cdl-hospitality-trust-kimly-capitaland
Grab Holdings Price target: DBS Group Research “buy” US$9
Multi-sector leadership but competition looming
DBS Group Research has initiated “buy” on Grab Holdings with a 12-month target price of US$9 ($12.19), representing a 25% upside to its last-traded price of US$7.22 on Jan 3. The company has a December year end.
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https://www.theedgesingapore.com/news/offshore-marine/marco-polo-marine-ventures-green-ship-recycling
Integrated marine logistics company Marco Polo Marine has announced that its Indonesian subsidiary, Marcopolo Shipyard, has ventured into green ship recycling, to help shipowners recycle their end-of-life ships.
In a Jan 5 press release, the company states that it has been awarded the permit by local authorities to conduct ship recycling activities and has also become the first shipyard in Indonesia to be certified and awarded the ISO 30000:2009 certificate by ABS Quality Evaluations (QE).
“Given the growing interest in sustainability by the shipping industry, we are excited to expand our shipyard services to include green ship recycling. With the ISO certification by ABS QE, ship-owners can be assured that their vessels are recycled in safe and environmentally sound facilities,” says Sean Lee, Marco Polo Marine’s CEO.
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time of esg taggings 0.04864412802271545
https://www.theedgesingapore.com/capital/brokers-calls/sac-capital-initiates-coverage-marco-polo-marine-buy-call-32-cent-price-target
SAC Capital is initiating coverage on integrated marine logistics company Marco Polo Marine with a ‘buy’ call and target price of 3.2 cents.
This is up 5 cents from the counter’s 2.7 cent price on Jan 3, analyst Lim Shu Rong writes in a report.
Lim's 3.2 cent target is pegged to 8.0x FY2022 enterprise value to earnings before interest, taxes, depreciation, and amortisation ratio. This is the median for the offshore sector and close to that of ASL Marine – Marco Polo Marine’s closest peer.
article_here
time of esg taggings 0.025243998039513826
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-mapletree-commercial-trust-wilmar-international-esr-reit-first
Mapletree Commercial Trust Price target: CGS-CIMB “add” $2.18 Bank of Singapore “buy” $2.04 UOB Kay Hian “buy” $2.48
MCT’s prospects still attractive after MNACT’s all-cash option Analysts from CGS-CIMB Research and the Bank of Singapore (BoS) are remaining positive on Mapletree Commercial Trust (MCT) following the introduction of an all-cash option offered to Mapletree North Asia Commercial Trust (MN-ACT) unit holders.
On March 21, the REIT managers of both MCT and MNACT announced the revision of their existing trust scheme agreement with the addition of a third option — a 100% cash consideration at $1.1949 per MNACT unit. Moving forward, this option will also be the default option.
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https://www.theedgesingapore.com/news/brokers-calls/dbs-lifts-first-resources-tp-250-strong-cpo-price-and-earnings-prospect
DBS Group Research analyst William Simadiputra has kept his “buy” call for First Resources, citing rising earnings prospects on strong crude palm oil (CPO) price outlook and production volume growth.
In his March 21 report, Simadiputra believes there is room for the share price to further perform this year, as First Resources’ P/E multiple is still below its 5-year average of 15x. To this end, he raises his target price to $2.50 and lifts his earnings forecast for FY2022 by 33% to US$194 million.
The plantation company's CPO yield will continue to perform above its peers in 2022, adds Simadiputra. "First Resources could deliver stronger earnings this year due to its unhedged sales volume amid rising CPO prices. Last year, FR’s earnings performance underperformed its peers due to hedged CPO selling prices and we only saw a meaningful improvement in 4Q21," he says.
In 2022 and 2023, DBS’s CPO benchmark price assumption is US$1,125 per metric tonne while the selling price assumption is US$850 per metric tonne. With this, Simadiputra forecasts First Resources to achieve US$48 million earnings per quarter in 2022.
This is a conservative estimate, he explains, considering that First Resources had booked earnings of US$63 million and US$53 million in 4Q2021 and 3Q2021 respectively.
“Back then, CPO benchmark price had averaged US$1,215 per metric tonne and US$1,064 per metric tonne respectively. Despite the outlook for higher CPO selling prices, we anticipate higher cash cost per ton for nucleus CPO on higher fertiliser cost. However, we believe First Resources can weather rising costs on strong yield performance which will keep the cost per hectare low,” he adds.
As at 12.08pm, shares in First Resources are trading 1 cent higher or 0.47% up at $2.12.
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time of esg taggings 0.03196684387512505
https://www.theedgesingapore.com/news/brokers-calls/analysts-raise-first-resources-tps-higher-cpo-price-assumptions
Analysts at RHB Group Research, CGS-CIMB Research and Maybank have raised their target prices for First Resources to $2, $2.12 and $1.88 respectively on the back of higher crude palm oil (CPO) price assumptions.
Maybank Investment Bank analyst Ong Chee Ting who has a “hold” call on First Resources expects the company to deliver 37% y-o-y growth in FY22 core PATMI, following Maybank's industry-wide CPO average selling price (ASP) revisions to RM4,100 per tonne from the previous RM3,200 per tonne.
CGS-CIMB’s Ivy Ng Lee Fang and Nagulan Ravi have kept their “add” call on First Resources, raising their FY22-FY23 net profit forecasts by 21%-50% to reflect higher CPO price assumptions and downstream margins.
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time of esg taggings 0.02532198396511376
https://www.theedgesingapore.com/news/brokers-calls/rhb-upgrades-plantation-sector-neutral-geopolitical-risk-war-becomes-reality
RHB Group Research analyst Hoe Lee Leng has upgraded her plantation sector call from “underweight” to “neutral” as the geopolitical risk of war has become a reality, causing all commodity prices to spike up.
In her Feb 25 note, Hoe says crude oil prices have shot past US$100 per barrel while crude palm oil (CPO) futures prices have shot past RM6,500 per tonne.
“As we have no idea of knowing the extent of this intrusion and how long it will last, we are not revising up our CPO price assumptions as yet. However, we are upgrading our sector weighting to ‘neutral’, given the knock-on effect on commodity prices and, therefore, earnings and valuations of the planters.
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https://www.theedgesingapore.com/capital/results/first-resources-sees-2hfy2021-double-1740-mil-proposes-final-dividend-51-cents
First Resources has reported earnings of US$128.6 million ($174.0 million) for the 2HFY2021 ended December, more than double the earnings of US$60.6 million in the corresponding period the year before.
This brings the group’s earnings for the FY2021 to US$161.1 million, up 61.6% y-o-y.
During the year, First Resources achieved its highest-ever total sales of US$1.03 billion, which grew 56.3% y-o-y, and lifted by total sales of US$619.4 million in the 2HFY2021, which was up 62.0% y-o-y.
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time of esg taggings 0.025099657010287046
https://www.theedgesingapore.com/news/kopi-c-company-brew/oceanus-group-secures-future-food-technology
Entrepreneur Peter Koh always focuses on leading by example, because he believes that actions resonate more powerfully than words.
“Your title may gain you some form of respect, but people don’t follow your title, they follow courage,” says the CEO of Singapore Exchange (SGX)-listed food technology company Oceanus Group .
“They follow a leader who will lead them and show them the path that is made of purpose,” he says.
article_here
time of esg taggings 0.023362335050478578
https://www.theedgesingapore.com/news/property/chip-eng-seng-acquire-minority-interest-8-shenton-way-213-mil
Chip Eng Seng, on April 5, announced that it has proposed to acquire a minority interest in the property at 8 Shenton Way (the former AXA Tower).
On April 4, Chip Eng Seng’s wholly-owned subsidiary, CEL Shenton, entered into a share purchase agreement (SPA) with Kuok (Singapore), Shenton Circle, Imagine Properties, PE One and Huatland Development (collectively the sellers) to acquire 21.0% of the issued share capital in PRE 13 for a consideration of $2.13 million.
PRE 13 holds a 50% effective stake in 8 Shenton Way.
The consideration was based on an agreed asset value of $1.68 billion for the property and took into account the net asset value (NAV) of PRE 13 as at Feb 28. It also took into consideration the redevelopment potential of the property and the marketability of the new development. The consideration excludes loans.
Under the SPA, CEL Shenton will take over a proportionate principal amount of the shareholders’ loans granted by the sellers to PRE 13. It will also commit to contribute its proportionate share of additional shareholders' loans required for the redevelopment of the property and other funding requirements of up to $251.0 million.
At the same time, Sing-Haiyi Emerald had also entered into a separate SPA on April 4 with the sellers to acquire another 21.0% of the issued share capital in PRE 13 for a consideration of $2.13 million.
The terms of the SPA for Sing-Haiyi Emerald are similar to that of CEL Shenton’s.
The acquisition of both CEL Shenton and Sing-Haiyi Emerald is not inter-conditional on the other.
Following the completion of the acquisitions, CEL Shenton and Sing-Haiyi Emerald will hold a total stake of 42.0% in PRE 13. The remaining 58.0% will be held by PRE 13’s remaining shareholders, Perennial Singapore Investment Holdings, Piermont Holdings Limited, and HPRY Holdings Limited.
In addition, CEL Shenton and Sing-Haiyi Emerald will hold an effective interest of 10.5% in the property.
According to Chip Eng Seng, the proposed acquisition is said to allow the company to acquire a meaningful stake in a prime real estate site located within the central business district (CBD).
In addition, the company is able to participate in a large-scale redevelopment project, which is expected to be an iconic landmark within the CBD upon its completion.
The project will add to the pipeline of Chip Eng Seng’s property development projects in Singapore; the company will be able to mitigate its financial and execution risks through participating in a large-scale redevelopment project with other partners.
The property and proposed redevelopment
Photo: Perennial Real Estate
8 Shenton Way is owned by Perennial Shenton Property, the wholly-owned subsidiary of Perennial Shenton Holding.
PRE 13, being the target company, holds 50% of the issued share capital in Perennial Shenton Property. The remaining 50% is held by Alibaba. Alibaba purchased the stake in May 2020 .
The property has a total site area of 10,983.80 sqm. It has a 99-year leasehold land tenure starting from July 19, 1982.
The property will be redeveloped into a mixed-use commercial and residential development, comprising office, retail, hotel and residential components, with a maximum allowable gross floor area of 144,162.38 square metres and a gross plot ratio of 13.125.
Perennial Group is also expected to continue to provide property management and asset management services in respect of the property.
Interested person transaction
Gordon Tang and his wife Celine Tang are the controlling shareholders of Chip Eng Seng. Celine Tang is also the non-independent and non-executive director, and non-executive chairman of Chip Eng Seng. The Tangs, through intermediate holding companies, collectively have an interest in all the shares of Sing-Haiyi Emerald.
Perennial Singapore Investment Holdings is a wholly-owned subsidiary of integrated real estate and healthcare company Perennial Holdings. Piermont Holdings is a wholly-owned subsidiary of agribusiness group Wilmar International. HPRY Holdings is wholly-owned by Kuok Khoon Hong, a director and controlling shareholder of Perennial. Kuok is also the chairman and CEO of Wilmar.
The proposed acquisition will be funded by CEL Shenton from internal cash sources. Its pro rata share of the equity portion of the total redevelopment costs for the property will be funded from internal cash sources and, or bank borrowings. The proposed acquisition is not expected to have a material impact on Chip Eng Seng’s net tangible assets (NTA) and earnings per share (EPS) for the current financial year ending Dec 31.
Shares in Chip Eng Seng closed at 45 cents on April 4.
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time of esg taggings 0.03320388286374509
https://www.theedgesingapore.com/capital/results/frasers-logistics-commercial-trust-says-pandemic-has-had-no-material-impact-business
Frasers Logistics & Commercial Trust (FLCT) has seen a $0.2 million dip in its distributable income for 1QFY2021 ended Dec 31.
However, this has not been so material to the Real Estate Investment Trust (REIT), its manager announced in a business update on Feb 7.
The amount comes from rental waivers and allowance for doubtful receivables due to the pandemic.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/rhb-keeps-starhill-global-reits-tp-68-cents-calls-reit-reopening-play-bargain
RHB Group Research Vijay Natarajan is keeping his “buy” recommendation on Starhill Global REIT with an unchanged target price of 68 cents.
The REIT’s current valuation is considered a “bargain” as it will benefit from the reopening of Singapore’s economy, says the analyst.
“[Starhill Global REIT’s] Orchard Road malls should be among the beneficiaries of the border reopening and gradual return of tourists. With [a] relatively strong balance sheet (gearing: 36%), and bulk (90%) debt hedged, coupled with an attractive 0.7x P/BV, we believe the REIT’s risk-reward profile is tilted towards the upside,” writes Natarajan in his March 24 report.
To date, the REIT’s portfolio has remained resilient amid the challenging market conditions, and outperformed expectations. Its Singapore retail portfolio reported a committed occupancy rate of 99.6%, up 0.4 percentage points q-o-q as at end-December. The figure stands among its highest in the last five years.
Occupancy at the REIT’s key Wisma Atria mall grew 2.28 percentage points to an occupancy rate of 98.9% with new tenants from the food and beverage (F&B) and jewellery space.
However, the analyst points out that the REIT’s rent reversion is expected to remain under pressure at FY2022 at a range of -10% to -20%.
This, he says, is mitigated slightly by the fact that only 14.8% of leases are pending renewal in FY2022.
In Malaysia, the REIT’s asset enhancement at The Starhill has been completed. The mall is also currently under a long master lease till 2038, with a step-up of 4.75% in rental every three years.
Similarly, the REIT’s master leases for its other Malaysian asset, Lot 10, KL is until June 2028, with a 6% rental step-up once every three years.
These two assets account for 15% of portfolio value and offer income stability despite concerns over Malaysia’s challenging retail market conditions, note Natarajan.
In Australia, the market is showing signs of a turnaround. The REIT’s net property income (NPI) in the 1HFY2022 ended December rose 10.6% y-o-y due to lower rental rebates and allowance for rental arrears.
To this end, Natarajan says he expects the REIT to provide minimal rental assistance ahead with the Australian government relaxing most of its Covid-19 related restrictions.
Leasing activity has also picked up with Uniqlo opening its first retail store (measuring 10,000 sq ft) at the Myer Centre in Adelaide, South Australia, and the expansion of the existing tenant, CDW Studios, notes the analyst.
Finally, the REIT manager has announced its intention to diversify its portfolio mainly via the acquisition of office assets in markets such as Japan, the UK and Australia, something Natarajan is positive on.
The REIT is looking at a medium- to long-term target of 50% revenue from the office segment, which currently stands at 14.4%.
“Gearing is comfortable at 36.1%, presenting debt head room (of over $300 million assuming 45% levels), for a combination of higher debt mix to make an accretive acquisition,” writes the analyst.
To this end, he has upped his distribution per unit (DPU) estimates by 0%-2% for the FY2022 to FY2024 due to adjusted occupancy and interest cost assumptions.
As at 3.35pm, units in Starhill Global REIT are trading 1.5 cents higher or 2.57% up at 60 cents, or an FY2022 P/B of 0.71x.
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time of esg taggings 0.03613798110745847
https://www.theedgesingapore.com/capital/brokers-calls/analysts-neutral-starhill-global-reit-results-stood-below-expectations-soochow
Analysts from OCBC Investment Research (OIR) and Soochow CSSD Capital Markets have rated “hold” on Starhill Global REIT, with the recommendation from the latter being a downgrade.
The lacklustre recommendation was due to the REIT’s weaker-than-expected results for the 1HFY2021/2022 ended December.
For the 1HFY2021/2022, Starhill Global REIT reported a distribution per unit (DPU) of 1.78 cents, down 5.3% y-o-y, with the decline largely attributed to the $3.1 million in distributions given out in the same period the year before.
article_here
time of esg taggings 0.024286200059577823
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-brc-asia-ifast-corp-digital-core-reit
BRC Asia
Price target:
CGS-CIMB “add” $2.10
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https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-genting-singapore-raffles-medical-group-sasseur-reit
Genting Singapore
Price target:
DBS Group Research “buy” $1
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https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-upgrades-japfa-add-following-listing-plans-china-dairy-business
CGS-CIMB Group Research analyst Tay Wee Kuang upgrades Japfa to an “add” rating with an increased target price from 65 cents to 81 cents.
This is in light of Japfa’s milk-producing business in China, AustAsia Investment Holdings (AIH), having applied for its listing in Hong Kong, which will result in two separately run entities with more flexibility and better focus to grow their respective businesses.
As part of the initial public offering (IPO), existing Japfa shareholders will receive a distribution of AIH shares in specie, potentially resulting in Japfa shareholders holding shares worth more than what Japfa shares are trading at now.
See: Japfa's China-focused milk business to split off for own listing in Hong Kong
“We believe that Japfa could crystalise AIH’s total equity valuation of about US$1.2 billion ($1.5 billion), which we derive from the sale of a 12.5% stake in AIH to private companies Genki Forest Technology Group Holdings, Honest Dairy Group, and GGG Holdings undertaken by Japfa in FY2021 (ended December 2021),” says Tay.
The valuation translates into a forward EV/EBITDA and P/E ratio of 11.6x and 13.1x respectively, a mark over its China dairy farming peers’ 4.7x and 5.3x respectively.
The analyst believes that this premium is due to a number of factors; firstly, the quality of Japfa’s milk yields far exceeding that of other industry players; secondly, an increasing portion of downstream businesses for AIH, potentially suggesting a shift in valuations closer to downstream players in the future; and lastly, the persistent demand-supply gap that continues to support buoyant raw milk prices to offset rising feed costs, with increasingly limited land suitable for cattle farming.
Taking away the potential equity value of US$730 million, representing a 62.5% equity stake in AIH, that could be realised through the eventual IPO, the current share price then suggests a remaining equity value of about US$328.5 million. This remaining equity value also translates to an implied FY2023 EV/Ebitda and P/E ratio of 4.3x and 4.4x, respectively.
Tay sees these valuations as attractive, despite risks of short-term profitability being affected by margin pressures due to rising raw material prices.
Previously, the analyst valued Japfa’s entire business at 7x FY2023 P/E (now 7.7x FY2023 P/E), as he believed that valuations were not as rich for the group’s animal protein business, as compared to its China dairy business. “We remain on the lookout for the indicative new share issuance from AIH’s listing that could dilute existing JAP shareholders’ stake in AIH,” adds Tay.
However, certain considerations regarding the wider poultry business that Japfa is involved in has risen as well. In light of Japfa tackling African Swine Flu (ASF) amidst the effects of the Covid-19 pandemic in 2021, their business in Vietnam and Myanmar remained affected, though Indonesia returned to the black in 4QFY2021.
Some downside risks include a possible delayed IPO timeline for AIH and extenuating business conditions persisting, in light of there being a recent history of ASF outbreak across crucial areas in Southeast Asia.
As at 2.48pm, shares in Japfa are trading at 1.5 cents lower or 2.08% down at 70 cents at a FY2022 P/B ratio of 0.73x and dividend yield of 2.8%.
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time of esg taggings 0.04984560888260603
https://www.theedgesingapore.com/news/company-news/japfas-china-focused-milk-business-split-own-listing-hong-kong
Japfa’s milk-producing business in China, AustAsia Investment Holdings, has applied for its listing in Hong Kong, which will result in two separately run entities with more flexibility and better focus to grow their respective businesses.
As part of the IPO, existing Japfa shareholders will receive a distribution of AIH shares in specie, potentially resulting in Japfa shareholders holding shares worth more than what Japfa shares are trading at now.
The number of AIH shares to be distributed to Japfa shareholders is to be determined.
This deal is subjected to approval by shareholders at an EGM to be called.
Following the listing of AIH, the remaining business, Japfa Animal Protein will continue to run its animal feed and chicken, beef and seafood farms in Indonesia under Jakarta-listed PT Japfa Comfeed Indonesia. Japfa will also continue to hold its pig farming business in Vietnam as well as similar but smaller ones in India, Myanmar and Bangladesh.
With its own listing, AIH will have another avenue to access capital to further grow its dairy business in China, while Japfa can better focus its financial resources on the remaining businesses.
Tan Yong Nang, Japfa’s executive director and CEO calls the separation of AIH and Japfa a “watershed moment”.
“Japfa Animal Protein has emerged stronger from the Covid-19 down-cycle and played an important role in providing food security and minimising disruption to the supply chain in countries that it operates in,” he says.
“We are confident Japfa Animal Protein is well-positioned in shaping the animal protein industry with a multi-year runway to take advantage of the growth opportunities in these countries,” adds Tan.
Upon completion of the split, Japfa Animal Protein would have a pro forma FY2021 revenue of more than US$4 billion with a corresponding Ebitda of US$374 million.
According to Japfa, based on recent transactions of stakes in AIH late last year, Japfa’s 62.5% stake in AIH is worth $992 million, or 49 cents per Japfa share. Its stake in PT Japfa Tbk is similarly valued at 49 cents per Japfa share, using the Indonesia-listed entity’s current market value as a gauge.
In contrast, Japfa closed March 29 at 65 cents, up 0.78% for the day and up 4.84% year to date.
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time of esg taggings 0.028643802041187882
https://www.theedgesingapore.com/capital/brokers-calls/dbs-remains-neutral-japfa-it-expects-its-near-term-outlook-remain-subdued
DBS Group Research analyst Cheria Christi Widjaja has kept “hold” on Japfa as she sees the group’s near-term outlook to remain subdued due to the limited room for margin improvements in FY2022.
“We foresee cost pressure lingering in 2022, as raw material and logistics costs stay elevated,” says Widjaja. This is in light of the recent Russia-Ukraine crisis, which has impacted a variety of commodity prices such that materials including soybean meal and corn skyrocketed recently. The analyst notes how this stands to limit margin improvements from demand recovery amid gradual reopening.
Moreover, in light of the resurgence of the African Swine Flu (ASF) outbreak, the analyst believes that there is a weak near-term outlook for Japfa’s Vietnam swine operation. This is compounded by existing Covid-19 movement restrictions that influenced softer swine prices.
However, Widjaja remains positive on certain aspects of Japfa’s business, such as strong broiler prices in Indonesia with the upcoming Ramadhan season and favourable raw milk prices in China.
Some risks include a surge in Covid-19 infections, higher-than-expected raw material costs, weaker-than-expected consumer demand, and greater or continued outbreak of diseases that would lead to price volatility.
In her report dated March 24, Widjaja has kept her target price unchanged at 67 cents, as she has kept her EBITDA forecasts for the FY2022/FY2023 the same following Japfa’s FY2021 results.
“We used a sum-of-the-parts valuation and pegged our valuation of Animal Protein Indonesia to our target price for Japfa Comfeed Indonesia (JPFA) at 2,060 rupiah (19.46 cents), while valuations of its Animal Protein Others and Dairy segments are based on FY2022 EV/EBITDA,” she writes.
“Our target price implies a 7.9x FY2022 P/E. Japfa currently trades at an FY2022 EV/EBITDA of 5x and an FY2022 P/E of 7x, which is lower compared to the average of its regional peers in the animal protein and dairy sector, which is at an FY2022 EV/EBITDA of 10x and an FY2022 P/E of 14x,” she continues.
As at 11.19am, shares in Japfa are trading at 1.5 cents up or 2.36% higher at 65 cents at an FY2022 P/B of 0.6x and dividend yield of 1.6%.
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time of esg taggings 0.05478933686390519
https://www.theedgesingapore.com/news/results/japfa-posts-20-higher-revenue-fy2021-earnings-slip-over-60-y-o-y
Agri-food company Japfa has recorded a 20% increase in revenue for its FY2021 ended December from US$3.86 billion ($5.23 billion) to US$4.6 billion, but PATMI has dropped 63% to $118.7 million, from the $343.9 million in FY2020.
However, Japfa said the FY2020 figure included an “extraordinary net gain” of US$140.2 million from the effective sale of 80% in Dairy Southeast Asia in 2020.
Should this be excluded, the company will see a 34.6% drop in PATMI from US$181.8 million in FY2020 to US$118.7 million.
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time of esg taggings 0.041892775101587176
https://www.theedgesingapore.com/capital/brokers-calls/dbs-downgrades-japfa-hold-near-term-outlook-remains-subdued
DBS Group Research is downgrading its call on Japfa to “hold” from “buy” with a lower target price of 67 cents from 89 cents previously.
Despite its cheap valuation, analyst Cheria Christi Widjaja expects near term outlook to remain subdued and margin pressure may linger in 2022, as raw material and logistics costs stay elevated.
According to the analyst, the group’s swine operation in Vietnam is expected to remain weak, dragged by softer swine prices due to the lingering impact of the Covid-19 pandemic and the resurgence of African Swine Fever (ASF) during 4Q2021.
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time of esg taggings 0.06419890094548464
https://www.theedgesingapore.com/capital/ma/frencken-acquires-penchem-technologies-52-mil
Frencken Group is acquiring Penchem Technologies, a high tech company focused on the designing, developing, formulating and manufacturing of polymer materials that are primarily aimed at applications and solutions for the electrical and electronics industry and also in markets such as coatings, adhesives, as well as fillers for industries such as automotive, marine and aerospace.
In conjunction with this deal, Frencken will be purchasing 261,500 ordinary shares in the company from two individuals - Wong Kah Gin and Ng Chee Mang - representing a 50% stake in Penchem. The group has also simultaneously entered into a subscription agreement with Penchem to subscribe for 10,058 ordinary shares amounting to 1.92% of the ordinary shares of Penchem.
The consideration payable for this transaction is RM15.6 million ($5.2 million), which the group will satisfy wholly in cash.
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time of esg taggings 0.026686432072892785
https://www.theedgesingapore.com/news/company-news/no-signboard-holdings-controlling-shareholder-proposes-29-share-transfer-qm
No Signboard Holdings’ controlling shareholder GuGong has entered into a conditional sale and purchase agreement (SPA) with the founder and group CEO of Q&M Dental Group Dr Ng Chin Siau in relation to the sale of 134 million ordinary shares in the capital of the company.
This represents approximately 29% of the total issued and paid-up capital of No Signboard by GuGong to Ng, for a total consideration of $1 based on the terms and conditions of the SPA.
As a condition to the completion of the proposed share transfer, Ng and No Signboard will enter into a conditional loan agreement on terms to be agreed between the parties, pursuant to which Ng shall extend the company an interest-free unsecured loan of an aggregate principal amount of $2.6 million.
GuGong has agreed to enter into the proposed share transfer in order to secure the loan to assist the group with its working capital needs, No Signboard said.
“For the avoidance of doubt, the loan would not be sufficient to meet the working capital requirements of the company for the next 12 months. As such, the company and GuGong are currently in negotiations with other investors to secure additional financing in order to meet the working capital needs of the group, and the company shall make the relevant announcements as and when there are any material developments,” it said.
The shareholders and directors of GuGong are executive chairman and CEO Lim Yong Sim (Lin Rongsen) as well as chief operating officer and executive director Lim Lay Hoon. As at the date of SPA, GuGong holds an aggregate of 253 million shares, representing approximately 54.91% of No Signboard’s total issued and paid-up share capital.
As the shares in the company have been suspended from trading since January 24, the proposed share transfer is subject to the necessary approval to be obtained from SGX-ST.
Shares in No Signboard last traded at 3.1 cents.
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time of esg taggings 0.028027978958562016
https://www.theedgesingapore.com/capital/results/qm-dental-group-sees-fy2021-earnings-grow-55-305-mil-back-record-fy2021-revenue-2056
Q&M Dental Group has reported earnings of $30.5 million for the FY2021 ended December, 55% higher than FY2020’s earnings of $19.7 million.
The earnings were due to a total revenue surge of 49% y-o-y to $205.6 million during the year, making this the highest-ever revenue recorded for the group.
Segmentally, revenue from Q&M’s dental and medical clinics increased by 27% y-o-y to $160.2 million due to higher revenue from its existing and new dental clinics in Singapore.
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time of esg taggings 0.028011848917230964
https://www.theedgesingapore.com/issues/stocks-watch/qm-dental-group-outlook-bright-expansion-and-spin
Even before the pandemic, Q&M Dental Group (Singapore) was already Singapore’s largest private dental chain with 90 clinics across the country. It also has 37 clinics in Malaysia and one in China.
When the pandemic struck in 2020, Q&M, led by CEO Dr Ng Chin Siau, was able to tap new opportunities. Seeing how testing for Covid would practically become a way of life, it went big into testing services, acquiring Acumen Diagnostics, which sells and distributes Covid test kits on top of providing Covid-19 lab-testing capabilities. That paid off.
As Q&M’s 9MFY2021 ended September 2021 numbers show, revenue rose 36% y-o-y to $116.6 million while earnings nearly doubled to $27.3 million, thanks to maiden contributions from testing services even as revenue from core dental services grew.
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time of esg taggings 0.025138617027550936
https://www.theedgesingapore.com/capital/right-timing/rh-petrogas-gains-war-sembmarine-breaks-out
The Russo-Ukraine War should have provided the trigger for a pivot to renewables. Instead, RH Petrogas ’ share price has surged. Sembcorp Industries (SCI) is also at a post-Covid high. However, Keppel Corp ’s chart pattern indicates some consolidation while Sembcorp Marine breaks out.
Bloomberg reports that commodity markets have been in turmoil since the invasion on Feb 24. While sanctions have not directly targeted Russian energy exports, trade has seized up amid a reluctance to buy the country’s raw materials, the report adds. Oil majors, international banks and shipowners are pulling investment and financing, making it tough for refiners and traders to secure credit lines and the vessels needed to continue with their usual purchases of oil grades like Urals, ESPO and Sokol, according to Bloomberg.
Last year, Russia accounted for 12% of the world’s total crude exports and almost 10% of oil-product shipments. Bloomberg points out that oil trading giant Trafigura Group tried to sell a cargo of Russia’s flagship Urals grade this week at a record discount to benchmark prices for northwest Europe but found no bidders, highlighting how toxic trade with the country has become.
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time of esg taggings 0.03326218877919018
https://www.theedgesingapore.com/capital/results/ttjs-order-book-reaches-187-million-newly-secured-projects
TTJ Holdings Limited today announced its order book has reached $187 million on the back of several new structural steel contracts secured. The company expects to substantially complete these projects between FY2022 and FY2024.
The Group’s core business lies in the design, supply, fabrication and erection of a wide spectrum of structural steelworks for use in the construction of buildings, factories, plants and infrastructure, with fabrication facilities located in Singapore and Johor, Malaysia.
“While constraints on foreign labour and headwinds such as global inflationary pressures and rising material costs weigh down the outlook for the immediate term, we believe the construction sector will continue to normalise as Singapore gradually opens its economy and its borders,” Teo Hock Chwee, TTJ’s Executive Chairman, says. “Over the immediate horizon, we will maintain our disciplined approach to managing our resources, so as to deliver our order book on schedule, and continue to work towards growing the business in a sustainable manner.”
Shares in TTJ Holdings closed at 18 cents on March 11.
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time of esg taggings 0.02808934496715665
https://www.theedgesingapore.com/news/company-news/shares-viking-offshore-marine-plunge-102-after-rights-cum-warrants-issue
Shares in Viking Offshore & Marine plunged 10.204% to 8.8 cents at market open on March 28 after the company made several announcements including its name change and proposed diversification of its existing core business. The company has also announced its intention to raise funds via a rights cum warrants issue and proposed placement on the same day.
Renounceable non-underwritten rights cum warrants issue
Viking Offshore & Marine, on the morning of March 28, has proposed a renounceable non-underwritten rights cum warrants issue of up to 140.57 million new ordinary shares in the company at 2.5 cents apiece.
The shares will come with up to 281.15 million free detachable and transferable warrants at an exercise price of 4 cents for each new share.
The issue price represents a discount of approximately 74.5% to the closing price of 9.8 cents per share on the SGX-ST on March 24, whereas the exercise price represents a discount of 59.2% to the last traded price.
Under the issue, entitled shareholders will receive one rights share for every four existing shares held in the capital and two warrants per rights share subscribed.
Should all the rights shares be subscribed and all warrants exercised, the company will raise $3.33 million and $11.25 million respectively.
According to the company, the rights cum warrants issue and proposed placement is to raise funds to strengthen its financial position and expand its capital base.
“In view of the current financial circumstances, the company believes that the rights cum warrants issue and proposed placement will strengthen the company's balance sheet, and a stronger financial position will also allow the group to seize opportunities swiftly,” reads the statement released on SGX on March 28.
Should all the rights shares be fully subscribed, Viking Offshore & Marine will use $1.95 million of the $3.33 million raised to repay its existing loans.
The remaining $1.38 million will go towards the company’s general working capital requirements.
The proceeds from the warrants will also go towards the company’s general working capital requirements.
There has been no undertaking from the company’s substantial shareholders to take up their respective rights shares with warrants.
Proposed placement
In addition, the company intends to place up to 300 million new shares at an issue price of 5 cents, raising gross proceeds of up to $15 million.
After the deduction of fees, the company will net some $14.4 million. Of the sum, $10.0 million will fund the company’s proposed business diversification, where it will add supply chain management and lifestyle retail businesses to its current core businesses of offshore and marine, as well as its chartering service and corporate businesses.
The remaining $4.4 million will go towards the company’s general working requirements.
The proposed placement will take place after the rights cum warrants issue.
UOB Kay Hian Private Limited has been appointed as manager for the rights cum warrants issue.
Proposed diversification
On the same day, Viking Offshore & Marine has proposed to diversify its core businesses to include supply chain management and lifestyle retail business.
The proposed diversification is said to benefit the company from increased business opportunities with an aim to enhance its financial position and long-term prospects.
In a statement, the company says it “intends to leverage upon its management team and the experience network and track record of the relevant shareholders, whom have relevant expertise in the supply chain management, amongst others, to diversify into the new business”.
The proposed diversification will also allow the company to “organically grow” its revenue and customer base.
“The group is currently in discussions with suppliers and distributors of such technologies and machineries, with a view to customising them for the group’s expanded offerings in the group’s existing industries and other applicable industries,” reads the statement released by Viking Offshore & Marine.
“It is anticipated that such offerings would involve two business models, namely sub-distributorship of these technologies and machineries to customers, and the offerings of leasing services of these technologies and machineries, such as robots for the customers' businesses,” it adds.
To this end, the company has incorporated a wholly-owned subsidiary in Malaysia, Diverse Supply Chain Sdn Bhd to undertake such offerings. Diverse Supply Chain was incorporated on Jan 19 with a share capital of 1 million ringgit ($322,077).
Proposed name change
In tandem with the proposed diversification, Viking Offshore & Marine intends to change its name to 9R Limited.
The new name is intended to be an abbreviation of its new inspirations, which potentially include these nine Rs, “Rebuild, Reborn, Restore, Recreate, Revamp, Reform, Revive, Remedy and Recast”.
According to the company, the proposed name will more accurately reflect its new strategic direction. It will also allow the company to create a new brand identity and develop a new positioning in the market.
Proposed disposal to interested person
The company is also seeking to dispose its entire issued and paid-up share capital of its wholly-owned subsidiaries, Viking Airtech and Viking Hvac, to Acapella Energy.
Ng Yeau Chong is the sole director and CEO of Acapella Energy. He is also the sole director of Airtech and Hvac, making this an interested person transaction.
According to Viking Offshore & Marine, the proposed disposal will allow the company to exit from a loss-making business segment. The move is also expected to free up the company’s cash flows as the subsidiaries are expected to continue making losses.
Following the waiver of all inter-company debts within the company, which resulted in the one-off gains of approximately $3.3 million, the subsidiaries, which were originally in a net liability position, are in a net asset position of $292,000 as at Dec 31, 2021.
Excluding the $3.3 million, the subsidiaries would have posted a cumulative net loss before income tax, non-controlling interests and extraordinary items of approximately $1.37 million for the FY2021. It would also have recorded a net liability of around $3.008 million as at Dec 31, 2021.
Airtech was incorporated on Oct 4, 1994, and has an issued and paid-up share capital of $60,000 comprising 60,000 shares.
Airtech has direct interests in 100% of the entire issued and paid-up share capital of Viking Airtech (Yantai) Co., Ltd, 49% of the issued and paid-up share capital of Viking Airtech (Shanghai) Co., Ltd, 100% of the entire issued and paid-up share capital of Viking Offshore Malaysia Sdn Bhd, and 100% of the entire issued and paid-up share capital of PT Viking Offshore.
HVAC was incorporated in Singapore on June 20, 2007, and has an issued and paid-up share capital of $10,000 comprising 10,000 shares.
The principal activities of the subsidiaries include designing, package engineering, sales, servicing, installation and commissioning of all kinds of heating, ventilation and air-conditioning systems for the marine and offshore industry.
As at 9.39am, shares in Viking & Offshore Marine are trading 1 cent lower or 10.204% down at 8.8 cents.
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time of esg taggings 0.04033412714488804
https://www.theedgesingapore.com/news/offshore-marine/viking-offshore-and-marine-raise-880000-through-private-placement
Viking Offshore and Marine is seeking to raise gross proceeds of $880,000 through the private placement of 10,987,143 new shares in a bid to raise funds and strengthen its financial and working capital position.
The company had, on Jan 18, entered into a placement agreement with Xiang Xiping to place the shares at an issue price of 8.01 cents apiece.
The issue price represents a discount of 8.58% to the volume weighted average price of 8.762 cents per share based on trades done on Jan 17.
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https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-mapletree-commercial-trust-wilmar-international-esr-reit-first
Mapletree Commercial Trust Price target: CGS-CIMB “add” $2.18 Bank of Singapore “buy” $2.04 UOB Kay Hian “buy” $2.48
MCT’s prospects still attractive after MNACT’s all-cash option Analysts from CGS-CIMB Research and the Bank of Singapore (BoS) are remaining positive on Mapletree Commercial Trust (MCT) following the introduction of an all-cash option offered to Mapletree North Asia Commercial Trust (MN-ACT) unit holders.
On March 21, the REIT managers of both MCT and MNACT announced the revision of their existing trust scheme agreement with the addition of a third option — a 100% cash consideration at $1.1949 per MNACT unit. Moving forward, this option will also be the default option.
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time of esg taggings 0.025986982975155115
https://www.theedgesingapore.com/news/contracts/leader-environmental-technologies-clinches-245-mil-contract-treat-municipal-sludge
Leader Environmental Technologies has secured a public-private partnership project worth RMB114.75 million ($24.5 million) in China’s Bazhou city in Hebei province.
The project involves the design, construction and operation of a sludge treatment plant that treats some 120 tonnes a day.
The project also involves the recycling of the treated sludge into bricks for a concessionary period of 30 years. The minimum tariff payment for the project is guaranteed and has been included in the approved annual finance budget of the province.
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time of esg taggings 0.05944561306387186
https://www.theedgesingapore.com/capital/brokers-calls/analysts-keep-buy-mapletree-industrial-trust-after-yet-another-strong-quarter
Analysts from Maybank Securities, OCBC Investment Research and UOB Kay Hian have recommended “buy” on Mapletree Industrial Trust (MINT) after the REIT reported a distribution per unit (DPU) of 3.49 cents, up 6.4% y-o-y for the 3QFY2022 ended December on Jan 25.
Maybank analyst Chua Su Tye has kept his target price unchanged at $3.35 as MINT’s DPU stood within expectations. His forecasts for the FY2022 have also remained the same.
To him, MINT boasts “stronger fundamentals with improved DPU visibility from its rising data centre tenancies”.
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time of esg taggings 0.05050033796578646
https://www.theedgesingapore.com/capital/results/mapletree-industrial-trust-reports-3qfy2022-dpu-349-cents-64-y-o-y
Mapletree Industrial Trust has reported a distribution per unit of 3.49 cents, up 6.4% y-o-y for its 3QFY2022 ended Dec 2021.
Net property income was up 24.1% y-o-y to $122.7 million; revenue was up 31.3% to $162.4 million, due to contributions from the recently acquired portfolio of 29 data centres in the US.
Average portfolio occupancy rate for 3QFY2022 was down marginally to 93.6% from 93.7% in the preceding quarter, as MIT aggregated the 29 US data centres which had a lower average occupancy rate.
article_here
time of esg taggings 0.024500589119270444
https://www.theedgesingapore.com/capital/results/nordic-group-posts-1531-surge-earnings-139-million-fy2021-declares-final-dividend
Nordic Group has reported earnings of $6.1 million in its 2HFY2021 ended Dec 31 2021, a 63.1% jump from the $3.6 million posted in the year before.
This follows a 12.8% rise in revenue to $58.9 million in 2HFY2021, amid a higher take up for its PS and MS segments.
For FY2021 ended Dec 31 2021, the company – which provides a range of system integration solutions and repair and maintenance works – posted earnings of $13.9 million, a 153.1% surge from the $5.5 million in FY2020.
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time of esg taggings 0.032216879073530436
https://www.theedgesingapore.com/news/offer/nordic-group-makes-238-cents-share-offer-starburst-holdings
Nordic Flow Control, a wholly-owned subsidiary of Nordic Group (NGL), has made a cash offer of 23.8 cents per share for all the shares in Starburst Holdings on Jan 24.
The group had previously announced its intent to make the all-cash offer for Starburst Holdings on Nov 10, 2021.
Following an extraordinary general meeting (EGM) on Jan 7, NGL’s shareholders have granted their approval for the offer to be undertaken.
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time of esg taggings 0.025391030125319958
https://www.theedgesingapore.com/news/kopi-c-company-brew/halcyon-agri-leading-natural-rubber-franchise
Relentless in his pursuit of excellence, rubber industry veteran David Li Xuetao always plays to win.
“My passion is winning — that’s my definitive goal,” says the CEO of Singapore Exchange (SGX)-listed natural rubber supplier Halcyon Agri Corp . “I want Halcyon Agri, and myself, to be the best we can be in the natural rubber industry.”
“My deep-seated passion and belief in the business of natural rubber is driven by the fact that it’s a strategically important but scarce raw material for the world. Without rubber, the world will stop moving as there would be no tyres! This passion keeps me going, and I’m determined to inspire changes in this critical industry,” he adds.
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time of esg taggings 0.034649390960112214
https://www.theedgesingapore.com/news/deals-joint-ventures-alliances/far-east-orchard-enters-jv-relation-hospitality-management
Far East Orchard, on March 4, announced that it has entered into a joint venture agreement (JVA) with Real Hospitality Group Asia Co in relation to a hospitality management business in China.
The JVA was entered into by the group’s subsidiary, Far East Hospitality Management Asia (FEHMA).
Under the JVA, FEHMA and Real Hospitality Group will set up a joint venture company (JVCo) in Hong Kong with a joint committed capital of RMB3 million ($645,000). The JVCo will then establish a wholly-owned subsidiary in China.
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https://www.theedgesingapore.com/news/results/far-east-orchard-report-net-profit-fy2021-reversing-net-loss-fy2020
Far East Orchard has guided that it expects to report a net profit for the FY2021 ended December, reversing from its losses reported in the FY2020.
The expected net profit is mainly attributed to the fair value gains on investment properties.
On Nov 9, 2021, Far East Orchard reported losses of $12.8 million for the 9MFY2021 as the Covid-19 pandemic continues to affect the hospitality sector.
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https://www.theedgesingapore.com/capital/brokers-calls/analysts-mixed-sheng-siong-group-amidst-year-normalisation
Analysts are mixed on Sheng Siong Group in lieu of shifts in consumption patterns to focus on “value for money”, following the economic toll caused by Covid-19.
DBS Group Research analyst Woon Bing Yong has maintained his ‘buy’ rating with an increased target price to $1.76 from $1.58, based on Sheng Siong’s pre-Covid P/E multiple of 21.0x, which represents the stock’s pre-Covid average forward P/E. “We expect supermarket sales to gradually normalise in FY2022 as Singapore transitions to “living with Covid-19,” Woon says.
The supermarket reported earnings of $32.5 million, up 6.6% y-o-y, for the 4QFY2021 ended December, as Sheng Siong’s gross profit margin set another record high.
article_here
time of esg taggings 0.029644998954609036
https://www.theedgesingapore.com/capital/results/sheng-siong-group-reports-48-higher-earnings-669-mil-2hfy2021-declares-final
Sheng Siong Group has reported earnings of $66.9 million for the 2HFY2021 ended December, 4.8% higher than earnings of $63.8 million in the same period the year before.
Earnings per share (EPS) for the 2HFY2021 stood at 4.45 cents, up from the 4.25 cents in the 2HFY2020.
2HFY2021 revenue increased 6.4% y-o-y to $688.1 million as three new stores, which were opened in the 2HFY2020, contributed 23.9% to the increment. Two new stores that were opened in August and November 2021 in China also contributed to the revenue growth.
article_here
time of esg taggings 0.025106529938057065
https://www.theedgesingapore.com/capital/brokers-calls/rhb-upgrades-centurion-corp-buy-it-expects-its-financial-performance-improve
RHB Group Research analyst Jarick Seet has upgraded his recommendation on Centurion Corp to “buy” from “neutral” following Centurion’s release of its results for the FY2021 ended December on Feb 24 .
During the year, Centurion saw core PATMI increase 13% y-o-y to $46.5 million.
FY2021 revenue grew 11% y-o-y to $143 million mainly thanks to the four quick-build dormitories (QBDs) and two migrant worker onboarding centres (MWOCs) in Singapore, and a purpose-build worker accommodation (PBWA) facility in Selangor, Malaysia, notes Seet. Centurion’s UK student accommodation occupancy rate also rose to 82% in the 2HFY2021, from the 53% in the same period the year before.
In his report dated March 9, Seet says he expects Centurion’s numbers to “point to a continued recovery” in FY2022, as he raises his target price estimate to 38 cents from 36 cents.
“Centurion’s business has been resilient throughout the pandemic, and we expect its financial performance to improve further as Covid-19 infections stabilise and subside. As such, we upgrade our stock recommendation to ‘buy’, and expect PATMI to grow by 12% y-o-y this year,” writes Seet.
The analyst has also given Centurion an environmental, social and governance (ESG) score of 3, which is on par with the median score of the Singapore-listed stocks covered by the brokerage.
In Singapore, Seet says Centurion’s new assets should further boost its revenue streams. At the same time, he expects occupancy rates to recover gradually from the recovery of migrant worker numbers in the construction, marine and processing industries.
In addition, he also expects rental rates from Centurion’s properties to remain resilient in FY2022.
In Malaysia, Seet notes that the demand for “good-quality and well-planned worker accommodations is expected to increase”.
“We [also] expect its business in Malaysia to continue to fare well,” he adds.
Finally, Centurion’s UK student accommodation business is expected to see a further recovery in its occupancy rate, especially when the pandemic stabilises even more, says Seet.
Seet’s new target price represents an FY2022 yield of 7%.
UOB Kay Hian analyst Adrian Loh has kept "buy" on Centurion with a higher target price of 45 cents from 43 cents previously.
In his March 10 report, Loh estimates that the company is likely to continue experiencing a recovery post the Covid-19 peak, following its strong FY2021 results, as well as its "robust" sequential recovery.
"Looking back to the start of Covid-19 in 1HFY2020, the company’s revenue and gross profit have clearly troughed in 2HFY2020. In our view, Centurion’s profitability and business prospects should continue its pace of recovery in 2022," he writes.
During the FY2021, Centurion had declared a final dividend of 0.5 cent per share. To Loh, this is a good sign and a "welcome return to dividend payments" as the company had suspended its dividend due to the financial effects of Covid-19.
In addition to his higher target price, Loh has also upped his net profit forecasts for the FY2022 and FY2023 by 3% and 8% respectively "on the back of greater conviction in the company’s business recovery".
"Our earnings changes incorporate an increase in occupancy rate for Singapore and the UK by 2 percentage points to 88% and 85% respectively and a 20% decline in rental rates for Australian PBSA (vs pre-Covid-19 levels) due to increased competition as the industry gets back on its feet," says Loh. "However, we highlight that there may be changes coming in the form of new government specifications for PBWA assets in Singapore and this may necessitate some downtime as Centurion adapts to these changes."
A full resumption of domestic and international flights, as well as the faster-than-expected easing of Covid-19 restrictions in Centurion's key countries are key catalysts to the company's performance, says Loh.
As at 1.56pm, shares in Centurion are trading flat at 33.5 cents.
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time of esg taggings 0.03263642196543515
https://www.theedgesingapore.com/capital/results/centurion-corp-reports-2hfy2021-earnings-439-mil-plans-05-cent-dividend
Centurion Corp has reported earnings of $43.9 million for 2HFY2021, reversing from red ink of $3.8 million in the year earlier. Revenue in the same period was up 27% y-o-y to $78.3 million.
For the full year, the dormitory operator reported earnings of $52.7 million, up 207% y-o-y, revenue, meanwhile, was up 11% to $143 million.
The company attributes the better numbers to better occupancy of its dormitories – both workers’ and students’.
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https://www.theedgesingapore.com/capital/brokers-calls/dbs-ups-bumitama-agris-tp-1-it-sees-strong-earnings-prospects-fy2022
DBS Group Research analyst William Simadiputra is keeping his “buy” call on Bumitama Agri Limited (BAL) with a higher target price of $1 from 75 cents previously as he sees the company’s strong earnings trend continuing in FY2022.
Furthermore, the counter is currently trading at an undemanding FY2022 P/E of 7.8x, which is well below its average P/E multiple of 9.7x.
“We believe BAL’s positive 2022 earnings prospects are not priced in yet, as it is still trading at a single-digit P/E multiple,” writes the analyst in his March 21 report.
In addition to his higher target price estimate, Simadiputra has also raised his price forecast for crude palm oil (CPO) to US$850 ($1,153.82) per metric tonne (MT) for FY2022 and FY2023, bringing BAL’s earnings estimates to 1.90 trillion rupiah ($179.7 million) for the FY2022 and 2.06 trillion rupiah for the FY2023.
In his report, the analyst notes that the company will be able to manage rising costs this year on the back of efficient operations and strong profitability on its decent nucleus estates CPO yield despite the rising costs of fertiliser.
BAL’s estates are in the prime-age cycle with an average age of just 13 years old, he adds.
That said, the company may face risks in the form of a reversal in the prices of CPO, where prices could decline on the back of stronger-than-expected pressure from soybean price or higher-than-expected CPO output, both in Indonesia and Malaysia in 2022.
As at 3.54pm, shares in BAL are trading 0.5 cent lower or 0.66% down at 75.5 cents.
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time of esg taggings 0.030273290118202567
https://www.theedgesingapore.com/news/brokers-calls/bumitama-agri-gets-buy-calls-earnings-expected-remain-robust-fy22
Expecting earnings to remain robust in FY22, analysts at RHB Group Research and UOB Kay Hian Research have upgraded and kept their “buy” calls for Bumitama Agri (BAL) with higher target prices of 90 cents and 85 cents respectively.
With recent crude palm oil (CPO) prices continuing to spike, UOB KH analysts Leow Huey Chuen and Jacquelyn Yow Hui Li expect BAL to continue benefiting with the current Indonesia tender price hovering around INR17,000 per kg.
Meanwhile, RHB analysts note that BAL managed to achieve a higher average selling price of INR13,500 per kg in 4Q — a 55% increase y-o-y — resulting in a realised selling price of INR9,852 for FY21. For FY22, it has some minimal forward sales locked in a year ago which have yet to be realised, but the amount is insignificant.
article_here
time of esg taggings 0.05861684889532626
https://www.theedgesingapore.com/news/brokers-calls/rhb-upgrades-plantation-sector-neutral-geopolitical-risk-war-becomes-reality
RHB Group Research analyst Hoe Lee Leng has upgraded her plantation sector call from “underweight” to “neutral” as the geopolitical risk of war has become a reality, causing all commodity prices to spike up.
In her Feb 25 note, Hoe says crude oil prices have shot past US$100 per barrel while crude palm oil (CPO) futures prices have shot past RM6,500 per tonne.
“As we have no idea of knowing the extent of this intrusion and how long it will last, we are not revising up our CPO price assumptions as yet. However, we are upgrading our sector weighting to ‘neutral’, given the knock-on effect on commodity prices and, therefore, earnings and valuations of the planters.
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https://www.theedgesingapore.com/capital/results/bumitama-agri-reports-earnings-1167-mil-2hfy2021
Bumitama Agri (BAL) has reported earnings of IDR1.24 trillion ($116.7 million) for the 2HFY2021 ended December, 80.6% higher than earnings of IDR685.1 billion in the same period the year before.
The half-year period’s earnings took BAL’s earnings for the FY2021 to IDR1.72 trillion, up 52.8% y-o-y.
Earnings per share (EPS) for the 2HFY2021 and FY2021 stood at IDR709 and IDR986 respectively.
article_here
time of esg taggings 0.024581272155046463
https://www.theedgesingapore.com/news/contracts/civmec-led-consortium-selected-causeway-pedestrian-and-cyclist-bridge-project
A Civmec-led consortium, Civmec SWC WSP Alliance, has been selected as the preferred proponent for the design and construction of The Causeway Pedestrian and Cyclist Bridge in the Perth metropolitan area.
The project comprises two cable-stayed bridges and approach embankments, connecting Victoria Park foreshore with Heirisson Island and the Perth central business district.
The scope of work includes the completion of the architectural and engineering design, community and stakeholder engagement as well as fabrication and transportation to site of approximately 1,500 tons of complex steel structure from Civmec’s heavy engineering facility in Henderson, among others.
The company said the project will be delivered in an alliance model, directly involving the consortium and the related state government body. The consortium will continue to work with Main Roads Western Australia to finalise the project alliance agreement and negotiate remaining outstanding matters with the final award targeted in the coming months.
The anticipated share of the works attributable to Civmec is approximately $55 million. Site works are planned to commence in Q32022 with project completion anticipated for Q32024 (calendar year).
“Having already been extensively involved in so many of Perth’s iconic structures, we look forward to working with our client and our consortium partners to deliver this important piece of infrastructure, while ensuring the community has a bridge that will be enjoyed by so many for future generations and will recognise the important Aboriginal history of the area,” said Civmec CEO Patrick Tallon.
Once the contract is finalised and awarded, coupled with other recent maintenance contract wins and extensions, the group’s order book will remain over A$1.1 billion.
Shares in Civmec closed flat at 65 cents on March 17.
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time of esg taggings 0.025418536039069295
https://www.theedgesingapore.com/news/kopi-c-company-brew/civmec-engineering-resilient-long-term-growth
James Fitzgerald and Patrick Tallon — founders of dual-listed construction and engineering services provider Civmec — believe in a hands-on approach. The pair, who are long-time friends, advocate playing an active and visible leadership role in the daily operations of the organisation.
“There is no replacement for dedication and hard work. To get a company off the ground you must lead from the front,” says Fitzgerald, executive chairman of Civmec, which is listed in Singapore and Australia. “Leadership is all about trust and doing what you say you will, no matter what you do or look after.”
Agreeing, Civmec’s CEO Tallon adds: “Regardless of what you do, you are in charge of your own actions and decisions, and it’s imperative to lead by example.”
article_here
time of esg taggings 0.035044978838413954
https://www.theedgesingapore.com/capital/brokers-calls/civmec-well-positioned-benefit-australias-public-infrastructure-and-defence
KGI Research has remained positive on Civmec as it deems the counter a “value stock” with “strong fundamentals and growth opportunities”.
In her report on March 1, analyst Megan Choo has kept her “outperform” call on Civmec as Civmec posted a strong set of financials for the 1HFY2022 ended December.
For the half-year period, Civmec reported a 50.4% y-o-y growth in earnings of A$22.6 million ($22.3 million). Revenue for the same period improved 27.4% y-o-y to A$389.4 million.
article_here
time of esg taggings 0.021038454957306385
https://www.theedgesingapore.com/capital/brokers-calls/expectations-better-year-fy2022-gives-far-east-hospitality-trust-strong-buy
Analysts have taken a strong liking for Far East Hospitality Trust (FEHT) following its results for FY2021 ended Dec 31 2021.
The trust – which has a portfolio of Singapore-focused hotels and serviced residences – reported a 4.1% y-o-y increase in its net property income to $75.2 million. This comes despite revenue coming in flat y-o-y on $83.2 million.
In this time, revenue from hotels was up by 4.7% y-o-y while that from serviced residences and commercial premises declined by 9% and 8.8% y-o-y respectively.
article_here
time of esg taggings 0.030534080928191543
https://www.theedgesingapore.com/capital/results/far-east-hospitality-trust-posts-109-higher-2hfy2021-dps-153-cents
The manager of Far East Hospitality Trust (FEHT) has reported a distribution per stapled security (DPS) of 1.53 cents for the 2HFY2021 ended December, 10.9% higher than the DPS of 1.38 cents in the corresponding period the year before.
This brings DPS for the FY2021 to 2.63 cents, 9.1% higher than the DPS of 2.41 cents in the FY2020.
2HFY2021 gross revenue grew 6.9% y-o-y to $41.7 million due to the serviced residences (SR) segment performing above the fixed rent. The master lease rental for the hotel segment remained at the fixed rent level during the half-year period.
article_here
time of esg taggings 0.02261169906705618
https://www.theedgesingapore.com/news/avs-and-evs/gss-energy-rides-precision-engineering-chops-enter-market-ev-motorbikes
In the push toward electric vehicles or EVs, four-wheelers are the ones hogging the headlines. Electric motorcycles, from the perspective of some businesses such as GSS Energy , is an over-looked segment with plenty of growth potential, especially in southeast Asia where two-wheelers are a popular mode of transport.
“We know that there’s going to be longevity for the product,” says CEO Sydney Yeung in an interview with The Edge Singapore . “If you look at all the infrastructure in Southeast Asia — like Vietnam, Jakarta, Manila, Thailand and Bangkok — I think for the foreseeable future the two-wheeler will be in high demand.”
In November 2021, GSS Energy’s subsidiary Giken Mobility teamed up with the Lamborghini family to launch its first electric motorcycle, called the Iso UNO-X. This year, the UNO-X on Feb 22 received certification by the Thai authorities that it is road-worthy and fit for sale.
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time of esg taggings 0.055312516167759895
https://www.theedgesingapore.com/news/kopi-c-company-brew/gss-energy-eyes-electric-micro-mobility-revolution
For finance industry specialist Sydney Yeung, leading by empathy is a daily imperative.
Empathetic leadership lays the foundation for the development of mutual respect and authentic human connections — essential ingredients for building morale, productivity and employee loyalty in any organisation, the CEO of SGX-listed GSS Energy points out.
“When a leader is empathetic, he is more understanding and less judgemental; his overall view is more flexible and less restricted — qualities that are critical in today’s world, where we are required to adapt continuously to changing circumstances,” he notes.
article_here
time of esg taggings 0.023115816991776228
https://www.theedgesingapore.com/news/company-news/business-russia-be-negatively-impacted-short-term-jb-foods
JB Foods expects its business in Russia to be negatively impacted in the short term due to various factors such as the massive devaluation of the Russian rouble as well as supply chain disruption.
In a business update, JB Foods said it is actively assessing the conflict situation in Russia and Ukraine and would continue to exercise caution as well as adopt remedial measures to mitigate its impact.
While JB Foods does not have any physical assets situated in Russia and Ukraine, both countries jointly accounted for about 17% of its 2021 revenue.
For the year 2022 — based on actual shipments delivered to date and forward orders on hand, the revenue contribution is expected to be about 10% of the group. Of which, the remaining undelivered contracts for year 2022 is about 7% of the JB Foods’ 2022 revenue target.
Despite the current raft of sanctions imposed in Russia, essential industries such as food and beverages that JB Foods operates in are not included in the restrictions and are unlikely to face immediate demand destruction, the company highlighted.
“In Ukraine, the group is concerned for the safety and well-being of our agent and customers. The exposure relating to the outstanding receivables is not expected to have significant impact to the group’s financial performance,” the company said.
In view of the uncertain environment in Ukraine, the group has temporarily halted sales-related activities due to massive damage to public infrastructure and disruption to its supply chain.
“Shareholders and potential investors are advised to exercise caution when dealing with or trading in the company’s shares in the short term,” it added.
Shares in JB Foods closed flat on March 16 at 46 cents.
Photo: Stock photo
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time of esg taggings 0.047605521976947784
https://www.theedgesingapore.com/news/offer/nordic-group-makes-238-cents-share-offer-starburst-holdings
Nordic Flow Control, a wholly-owned subsidiary of Nordic Group (NGL), has made a cash offer of 23.8 cents per share for all the shares in Starburst Holdings on Jan 24.
The group had previously announced its intent to make the all-cash offer for Starburst Holdings on Nov 10, 2021.
Following an extraordinary general meeting (EGM) on Jan 7, NGL’s shareholders have granted their approval for the offer to be undertaken.
article_here
time of esg taggings 0.04512218595482409
https://www.theedgesingapore.com/capital/results/geo-energy-announces-revenue-surge-earnings-turnaround-high-coal-prices
Geo Energy Resources has had a record 2021. Driven by the increase in sales volume and high ASP, Geo Energy achieved its highest ever revenue and net profits in FY2021. Revenue doubled y-o-y to US$641.9 million in 2021.
Net profit from operations of US$179.1 million was a turnaround from the net loss from operations of US$11.5 million in 2020, excluding the gain on repurchases of USD bonds. Ebitda and free cash flows for 2021 increased significantly to US$270.9 million, and US$272.6 million, respectively. The average ICI4, an Indonesian coal index futures picked up strongly in the second half of 2021 and averaged US$65.85 per tonne for the full year.
Cash profit from coal mining for 2021 averaged at US$25.05 per tonne, 4 times higher when compared to US$6.25 per tonne in 2020. The strong result was attributed to the higher average selling price (ASP) but was partly offset by the higher production cash cost as the Group’s cost structure links certain costs to the coal index prices.
article_here
time of esg taggings 0.048080208944156766
https://www.theedgesingapore.com/capital/insider-moves/geo-energy-shareholder-cuts-stake-starhub-and-silverlake-axis-buy-back-shares
Lenny Limanto, a substantial shareholder of Geo Energy Resources, saw a significant cut in her stake in the coal miner. On Jan 27, Cheng Xin Investment, which holds Limanto’s stake, sold 20 million shares for $7.14 million, which works out to an average price of 35.7 cents for each unit.
On Feb 18, Cheng Xin Investment sold another tranche of nearly 11.6 million shares for $4.64 million. The price works out to around 40.1 cents for each unit. With the sales, Limanto’s deemed stake has been cut from nearly 123.8 million shares or 8.79% to just over 92.2 million shares or 6.55%.
In contrast, Geo Energy on Dec 15, 2021, started a share buyback programme as a buoyant coal market flushed its balance sheet with cash. The most recent purchase was on Jan 20 when the company bought back 100,000 shares at 33 cents each, bringing the total number of shares bought back to 11.9 million units.
article_here
time of esg taggings 0.04624192090705037
https://www.theedgesingapore.com/capital/results/rex-international-issues-clarification-brage-field-acquisition
Rex International Holding, on March 9, has issued a clarification on the financial impact of the acquisition of the producing Brage Field by its 91.65%-owned subsidiary Lime Petroleum AS’s (LPA). The acquisition was completed Dec 31, 2021.
Earlier on June 15, 2021, LPA entered into a conditional sale and purchase agreement (SPA) with Repsol Norge AS (Repsol), to acquire Repsol’s 33.8434% interests in the oil, gas and natural gas liquids (NGL) producing Brage Field on the Norwegian continental shelf for a post-tax consideration of US$42.6 million ($57,985).
The acquisition of the Brage Field did not contribute to any income or profit before tax in the group’s FY2021 ended 31 December 2021, but was recognised as a “gain from bargain purchase” of US$18.2 million in terms of accounting treatment, as the acquisition was completed on Dec 31, 2021, explained Rex in its statement.
“Due to the transaction being regarded as a business combination, the revenue, EBITDA and profit are not normally recognised in our books, but resulted in a bargain purchase gain, even though we have a right to the underlying cash-flow from the transaction from Jan 1, 2021,” explains Dan Broström, executive chairman of Rex.
“From this year 2022, revenue from the Brage Field will be fully recognised in our profit and loss statement and will make an important contribution. The estimated average oil price in 2021 for production from the Brage Field was around US$72 per barrel of oil equivalent. This should be compared to the price of Brent today trading at over US$120 a barrel,” he adds.
Broström explains that this bodes well for a strong start to 2022 as the group now has two production legs to stand on - Norway and Oman.
Shares in Rex are trading at 2 cents lower or 4.4% down at 44 cents on March 9.
Photo: Bloomberg
article_here
time of esg taggings 0.024715299950912595
https://www.theedgesingapore.com/capital/results/rex-international-holding-sees-increased-oil-production-and-positive-cash-flow
Rex International Holding Limited closed the year 2021 with the acquisition of a 33.84% stake in Brage Field operated by Wintershall Dea Norge AS. The acquisition was made by Rex International’s subsidiary Lime Petroleum AS (LPA), and was the group’s most significant transaction in 2021.
The acquisition also fulfilled LPA’s ambition to transition from pure-play exploration to a full cycle exploration and production company on the Norwegian Continental Shelf, and to establish recurring cash flow, as well as develop and drive further value in LPA’s existing portfolio.
The move tops off an eventful year marked by increased oil production in Oman amid rising oil prices.
article_here
time of esg taggings 0.025857775006443262
https://www.theedgesingapore.com/news/contracts/soilbuild-construction-unit-wins-529-mil-contract
SB Procurement, a wholly-owned subsidiary of Soilbuild Construction Group has secured a $52.9 million contract for additions and alterations to an industrial development at Boon Lay Planning Area.
The project is for an existing 4-storey single-user industrial development with other ancillary facilities.
Pursuant to the contract, the project is expected to start this month and to be completed by 3Q23.
article_here
time of esg taggings 0.03916602907702327
https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-downgrades-sph-reit-hold-recovery-already-priced-other-analysts
CGS-CIMB Research analysts Eing Kar Mei and Lock Mun Yee have downgraded SPH REIT to “hold” from “add” previously as they deem the market to have already priced in the REIT's recovery at its current unit price.
Eing and Lock have kept their target price on SPH REIT at 95 cents.
“The REIT has one of the lowest gearing levels (30.1% in 2QFY2022 ended February) among Singapore REITs (S-REITs) which gives it ample firepower for acquisitions,” they write in their report on April 1.
“However, it is trading at [a] 5.4% distribution per unit (DPU) yield, near its 5-year average of 5.3%. This is also lower than retail REITs’ average yield of 5.6%,” they add.
The analysts’ report comes after the REIT reported stronger numbers for the 1HFY2022, which came in line with their full-year forecast.
For the period, SPH REIT reported a distribution per unit (DPU) of 2.68 cents, up 9.8% y-o-y.
The REIT’s DPU for the 1QFY2022 and 2QFY2022 came in at 1.24 cents and 1.44 cents respectively.
As at end-February, the REIT’s portfolio occupancy rate remained high at 98.4%.
Tenant sales during the 1HFY2022 increased 1% y-o-y.
On this, Eing and Lock say they see tenant sales to improve going forward, due to the relaxed restriction measures and as consumers adapt to living with Covid-19 as an endemic.
In addition, the analysts are expecting rental pressures to ease this year due to fewer Covid-19 restrictions compared to that in 2021. The REIT’s Paragon Mall in Orchard Road is also a prime beneficiary of easing border measures.
To them, any accretive acquisitions are upside risks to the REIT, while weaker-than-expected rental reversions, as well as a worse-than-expected impact from higher operating expenses are downside risks to the counter.
The team at DBS Group Research has kept “hold” on SPH REIT with a target price of 96.4 cents that’s tagged to the cash offer made by Cuscaden Peak.
In an update dated April 4, the team also noted that the REIT’s topline and DPU stood in line with their full-year estimates.
That said, the REIT seems to be seeing the first sign of higher utility costs as its operational metrics stood at an inflexion point.
Its Singapore portfolio reported higher operating expenses with a 30% increase in utilities, as opposed to 1.5% of gross rental income (GRI).
“Local utility rates are generally floating in nature, while other expenses such as cleaning & maintenance continue to be largely fixed in nature,” writes the team. “On the other hand, higher utility costs in Australia are largely sheltered on fixed terms.”
Like the analysts at CGS-CIMB, the DBS team also sees favourable catalysts for Paragon Mall as borders reopen.
“Paragon Mall saw some uptick in medical tourist, with borders reopened with Indonesia, a key market for medical tourists. Amongst trade sectors, watches & jewellery was amongst the best performers, while luxury products continue to feel the heat from the lack of tourists,” writes the team.
“The reopening of atrium sales, alongside reopening of borders, will be key catalysts for Paragon in the coming quarters as a key luxury mall along Orchard Road,” they add.
Maybank Securities analyst Chua Su Tye has also kept his "hold" call on SPH REIT with an unchanged target price of 95 cents.
While he notes that the REIT's metrics for the 1HFY2022 are "healthy" and in line with his full-year estimates, acquisition visibility remains low.
"Clementi Mall’s resilience however reinforces our preference for suburban retail. As a result, we prefer Frasers Centrepoint Trust (FCT) for its concentrated suburban mall portfolio," he adds.
Chua has given FCT a "buy" call with a target price of $2.90.
That said, the analyst expects Seletar Mall to be a priority acquisition target. The mall is currently owned by the REIT's sponsor, SPH. In this case, a fully debt-funded acquisition would lift his DPU target for the FY2022 by around 8%, says Chua.
"However, with [the] restructuring of its sponsor likely to be a priority, inorganic growth is likely to take a back-seat," he adds.
To this end, Chua sees SPH REIT trading sideways in the near term as it is bound by a chain offer from SPH's ongoing privatisation exercise.
As at 10.15am, units in SPH REIT are trading flat at 97 cents, or an FY2022 P/B of 1.07x and dividend yield of 5.44%, according to CGS-CIMB’s estimates.
article_here
time of esg taggings 0.03394936118274927
https://www.theedgesingapore.com/capital/results/sph-reit-reports-2qfy2022-dpu-144-cents-161
The manager of SPH REIT has reported distribution per unit (DPU) of 1.44 cents for the 2QFY2022 ended February, 16.1% higher than the DPU of 1.24 cents in the same period the year before.
On a q-o-q basis, the REIT’s DPU for the 2QFY2022 was also up by 16.1% from the DPU of 1.24 cents in the 1QFY2022.
This brings the REIT’s DPU to 2.68 cents for the 1HFY2022, up 9.8% y-o-y.
For the half-year period, the REIT’s gross revenue increased by 1.2% y-o-y to $141.6 million on the back of the lower rental waivers and reliefs granted to the REIT’s tenants.
Property operating expenses stood 3.6% higher y-o-y at $36.4 million, mainly due to the increase in electricity rates.
During the 1HFY2022, the REIT reported net property income (NPI) of $105.3 million, up 0.4% y-o-y.
Net income for the half-year period increased by 2.6% y-o-y to $80.1 million.
The REIT also reported a total return after taxes and before distribution of $112.0 million, up 60.6% y-o-y mainly due to the fair value gain on investment properties of $32.1 million.
The REIT’s Singapore investment properties recorded a fair value gain of $32.3 million, while its investment properties in Australia registered a fair value loss of $0.2 million. The fair value loss has no impact on the income available for distribution.
Distributable income to unitholders increased 8.4% y-o-y to $82.6 million.
As at end-February, the REIT reported a weighted average lease expiry (WALE) of 5.5 years by net lettable area (NLA) and a WALE of 2.8 years by gross rental income (GRI).
Its portfolio occupancy stood at 98.4% as at end-February.
Overall tenant sales for the REIT’s Singapore assets increased 2% y-o-y for the half-year period. In Australia, Westfield Marion saw tenant sales increase by 1% y-o-y for the 1HFY2022, while tenant sales for Figtree Grove fell 10% y-o-y.
The REIT has also, in a separate filing, released the valuations of its assets.
As at Feb 28, Paragon's valuation stood at $2.67 billion, according to independent valuer Savills. The Clementi Mall, another one of its assets, was valued at 597.5 million by Savills as well. The Rail Mall at Bukit Timah was valued at $62.2 million by Savills. Westfield Marion and Figtree Grove in Australia were valued at A$642.5 million ($651.5 million) and A$200 million respectively by CBRE.
“In line with our resilient performance, we are pleased to announce a DPU of 1.44 cents for 2Q FY2022. We thank all stakeholders for riding through this pandemic with us to emerge stronger. We will continue to work alongside the manager and provide guidance to deliver sustainable returns amid the gradual market recovery,” says Dr Leong Horn Kee, chairman of SPH REIT.
Susan Leng, CEO of SPH REIT adds, “As travel restrictions around the world ease with quarantine free travel for the vaccinated, we expect visitor arrivals to Singapore and Australia to recover gradually.”
“However, a meaningful recovery to pre-Covid levels is likely to take some time,” she continues. “Although the economy is looking better, we are still sanguine about the pace of a full recovery. The impact of geopolitical tensions on oil prices and general market sentiment are likely to weigh on the Singapore economy. We are committed to maximising unitholder value and maintaining operational efficiency. Our proactive capital management strategy will put us in good stead for growth opportunities.”
Unitholders will receive their distributions on May 20.
Units in SPH REIT closed flat at 97 cents on April 1.
article_here
time of esg taggings 0.056563809979707
https://www.theedgesingapore.com/capital/brokers-calls/sph-reit-buy-or-hold-see-what-analysts-have-say
Analysts are largely buoyant on SPH REIT’s prospects after the REIT posted results that point to the REIT’s recovery in the 1QFY2022 ended Novembe r.
SPH REIT did not declare any distributions during the quarter as it is bound by the Singapore takeover code on the back of the possible chain offer by Cuscaden.
CGS-CIMB Research analysts Eing Kar Mei and Lock Mun Yee have reiterated “add” with an unchanged target price of $1.03.
article_here
time of esg taggings 0.03687668195925653
https://www.theedgesingapore.com/capital/results/sph-reit-reports-occupancy-rate-988-1qfy2022
The manager of SPH REIT has reported a high occupancy rate of 98.8% across its portfolio in the 1QFY2022 ended November.
The REIT has also reported an improvement in its weighted average lease expiry (WALE) to 5.5 years by net lettable asset (NLA) and 2.9 years by gross rental income (GRI) from FY2021.
According to the manager, the REIT’s strategically located assets with captive catchments cushioned the impact of Covid-19.
article_here
time of esg taggings 0.04480624315328896
https://www.theedgesingapore.com/news/company-news/oue-lippo-healthcares-prince-bay-hospital-secures-70-mil-loan
Le Kang Assets (Shenzhen), an associated company of SGX-listed OUE Lippo Healthcare (OUELH), has entered into a loan agreement with the Bank of China (BoC) for the grant of a RMB330 million ($70 million) loan on March 28.
The loan will be used for the construction and renovation of Prince Bay Hospital.
According to the SGX filing, the development of the hospital is progressing as planned. Its main structural construction is slated to be completed in the first half of 2022.
The hospital is expected to be commissioned in 2024 to serve the affluent residents in the Guangdong-Hong Kong-Macao Greater Bay Area.
Upon its opening, Prince Bay Hospital will have over 200 beds, and is set to benefit from the growth of the medical tourism industry within the Greater Bay Area.
Le Kang Assets is a joint venture company (JVCo) that is indirectly owned by China Merchants Lippo Hospital Management (Shenzhen) Limited, the OUE Lippo Healthcare’s joint venture company with independent third-party, China Merchants Shekou Industrial Zone Holdings Co., Ltd.
The JVCo holds the land and property of the hospital, which is located in Shenzhen, China.
“The loan is a significant milestone for the company as it reduces our total funding commitment and we can deploy our financial resources to other growth opportunities. It is also a reflection of the confidence of Bank of China, as the lender, on the future prospects of Prince Bay Hospital,” says Yet Kum Meng, CEO of OUELH.
According to OUELH, the loan is in line with its ongoing initiatives to bolster its financial position as part of its roadmap to enhance its capital structure.
The loan will have no impact on OUELH’s gearing as the borrower is the JVCo. The loan is also secured on the JVCo’s shares and the land and property of Prince Bay Hospital.
Shares in OUELH closed flat at 3.5 cents on March 28.
article_here
time of esg taggings 0.047490780940279365
https://www.theedgesingapore.com/capital/contracts/isoteam-secures-319-mil-new-projects
ISOTeam has secured $31.9 million worth of new contracts wins, which will boost its order book that stood at $152.7 million as at December 2021.
To be completed between November 2022 and January 2024, the new projects comprise a $4.2 million mechanical and electrical project that involves the supply, delivery and installation of grid-tied solar photovoltaic system for SolarNova Phase 4 HDB residential blocks; 10 repair and redecoration (R&R) projects worth $17.9 million, which includes one project that involves R&R works to 20 blocks and improvements to toilets at the market and food centre at Boon Lay Avenue, Boon Lay Drive and Boon Lay Place; as well as nine coating and projects worth about $9.8 million.
"With the Covid-19 situation being carefully managed, we are seeing a return of confidence in the economy. This has led to a definitive uptick in the number of public and private projects up for tender including those that had been put on the backburner during the height of the pandemic," says group executive director and CEO Anthony Koh.
"The government has been supportive of the industry and has taken steps to address the shortage of foreign labour. We are optimistic of being able to ramp up our activities and secure more projects as the labour situation continues to improve. At the same time, we are closely monitoring the cost of raw materials because we expect the current geopolitical tensions in Eastern Europe to have an impact on global supply chains and further drive up prices. We will continue to adjust our procurement strategy as well as our pricing strategy to take into account any significant cost increases in order to safeguard our margins," he adds.
Shares in ISOTeam closed 4.17% higher on Mar 22 at 10 cents.
Photo: The Edge Singapore/ Albert Chua
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time of esg taggings 0.04701879806816578
https://www.theedgesingapore.com/news/sustainability/91-stake-sunseap-edpr-establish-apac-hq-singapore-10-bil-investment
EDP Renewables (EDPR) has completed an agreement with Singapore solar energy company Sunseap to establish its Asia Pacific headquarters in Singapore.
The company announced last November that it had acquired a 91% stake in Sunseap, the largest distributed solar player and fourth largest solar player in Southeast Asia.
Following the close of its $1.1 billion deal with Sunseap on Feb 24, EDPR now plans to invest up to $10 billion into Sunseap by 2030 to create an industry-leading clean energy hub for the region out of Singapore.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-yanlord-land-group-gke-corp-isoteam-starhub
Yanlord Land Group Price target: OCBC “hold” $1.16
Weaker outlook for the year ahead
The team at OCBC Investment Research has kept its “hold” rating on Yanlord Land Group with a lower fair value estimate of $1.16, from $1.20 due to a weaker contracted sales outlook.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/rhb-downgrades-isoteams-rating-neutral-lowered-tp-12-cents
RHB Group Research analyst Jarick Seet downgrades ISOTeam’s rating from ‘buy’ to ‘neutral’ with a lower DCF-derived target price to 12 cents from 21 cents.
“ISOteam incurred a net loss of $14.5 million for FY2021 mainly due to the ongoing Covid-19 situation including supply chain disruptions and labour shortages which have severely impacted its margins,” says Seet. “FY2022 will likely be a better year and margins should continue to improve.”
With an order book of $165.2 million as at 30 June 2021 to be delivered over two years, the analyst expects revenue to continue to rebound stronger as the company executes more projects. In addition, management also expects the number of projects up for tender to increase as activities slowly resume and it aims to actively tender for such projects to beef up its order book.
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time of esg taggings 0.022245272994041443
https://www.theedgesingapore.com/capital/insider-moves/oue-buys-back-shares-steadily-eurosports-global-does-it-sporadically
Property group OUE has been buying back its shares at a steady pace. The most recent transaction was on March 21 when it acquired 10,000 shares on the open market at $1.29 each. This brings the total number of shares bought back under the current mandate to 8.09 million units.
Prior to March 21, OUE was buying back shares almost every other day since the start of the month. These range from as much as 92,400 shares on March 1 at $1.2916 each to as low as 10,000 shares on several other days. The prices OUE paid were kept within a tight range of around $1.29.
The company’s share price has been persistently trading at a very steep discount to its net asset value of $4.41 as at Dec 31, 2021, slightly higher than $4.24 as at Dec 31, 2020.
article_here
https://www.theedgesingapore.com/capital/results/talkmed-posts-185-increase-2hfy2021-earnings-143-mil
Medical oncology and stem cell services provider TalkMed Group saw its earnings jump 18.5% to $14.3 million for the 2HFY2021 ended December, from $12.1 million a year ago.
This brings earnings for the FY2021 to $25.1 million, 10.3% higher y-o-y.
Earnings per share (EPS) climbed to 1.08 cents in the 2HFY2021 from 0.91 cents a year ago on a fully diluted basis.
article_here
time of esg taggings 0.022140277083963156
https://www.theedgesingapore.com/news/reits/frasers-hospitality-trust-removed-ftse-singapore-all-cap-index
Frasers Hospitality Trust (FHT) has been removed from the FTSE Singapore All Cap Index and the Benchmark Index, announced the manager of Starhill Global REIT on March 22.
The Benchmark Index will determine the performance fee payable to the REIT manager under the trust deed constituting Starhill Global REIT dated Aug 8, 2005.
No further changes have been made to the index.
As at March 22, the Singapore-listed REITs and property-related business trusts in the FTSE Singapore All Cap Index are:
AIMS APAC REIT (AA REIT) ARA LOGOS Logistics Trust (ALOG) 3. Ascendas Real Estate Investment Trust (A-REIT); Ascott Residence Trust (ART) CapitaLand Integrated Commercial Trust (CICT) CapitaLand China Trust (CLCT) CDL Hospitality Trusts (CDL HT) Cromwell European REIT ESR-REIT Far East Hospitality Trust (FEHT) First Real Estate Investment Trust Frasers Centrepoint Trust (FCT) Frasers Logistics & Commercial Trust (FLCT) Keppel REIT Keppel DC REIT; Keppel Pacific Oak US REIT (KORE) Lendlease Global Commercial REIT (LREIT) Lippo Malls Indonesia Retail Trust Manulife US REIT (MUST) Mapletree Commercial Trust (MCT) Mapletree North Asia Commercial Trust (MNACT) Mapletree Industrial Trust (MINT) Mapletree Logistics Trust (MLT) OUE Commercial Real Estate Investment Trust Parkway Life Real Estate Investment Trust Prime US REIT Sabana Industrial REIT SPH REIT Starhill Global REIT Suntec REIT
Units in FHT closed flat at 46 cents on March 22.
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time of esg taggings 0.052487103966996074
https://www.theedgesingapore.com/capital/brokers-calls/uobkh-adds-mm2-siaec-and-venture-its-alpha-picks-takes-profit-brc-asia-and
UOB Kay Hian has added MM2, SIA Engineering Company (SIAEC) and Venture Corporation to its alpha picks portfolio for the month of April.
To the analysts, MM2 should benefit from seeing higher capacities at its cinemas and live performances on the back of the relaxed measures, while SIAEC is leveraged to the airlines’ increased activity at Changi Airport in the wake of easing travel rules.
Venture was always chosen for its “robust demand outlook” as well as its attractive valuations.
On the other hand, counters such as BRC Asia and Yangzijiang (YZJ) have been removed from the alpha portfolio as the team has chosen to take profit on them.
BRC Asia, which has seen its share price increase by 11.4% since its inclusion in the portfolio, saw its shares re-rate after it released its results for the 1QFY2022 ended December.
“While we remain bullish on BRC for the long term, we remain cautious due to short-term headwinds such as rising steel prices,” says the team in its April 4 report.
YZJ has also seen its shares increase some 52.5% since its inclusion in the brokerage’s alpha picks.
“While we continue to like YZJ, we believe that near-term catalysts remain scarce and would look to re-enter at lower levels,” the team adds.
Overall, the brokerage’s alpha picks portfolio rose 6.3% m-o-m and outperformed the benchmark Straits Times Index (STI), which rose 5.1% m-o-m.
Key stocks that outperformed were Sembcorp Marine (SembMarine), YZJ and Ascott Residence Trust (ART), which rose 18%, 11% and 10% m-o-m respectively.
However, the portfolio underperformed on a quarterly basis, with it being up 5.3% in the 1QFY2022, compared to the STI’s 9.1% q-o-q growth. The STI was the performing Asian index during the same quarter.
The analysts have given “buy” calls on MM2, SIAEC and Venture Corp with target prices of 12 cents for MM2, $2.80 for SIAEC and $22.80 for Venture Corp.
They are also keeping “buy” on BRC Asia and YZJ.
The STI closed 2.14 points lower or 0.06% down at 3,416.97 points on April 4.
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https://www.theedgesingapore.com/news/equity-raising/oei-and-goi-invest-195-million-mm2-asia-placement-shares-5-cents-each
Media production company mm2 Asia will be raising $19.5 million from two prominent businessmen, Sam Goi Seng Hui and Oei Hong Leong.
The company is placing 390 million new shares at 5 cents each, with Goi and Oei each taking up half the shares.
Upon completion of the placement, they will each hold 7.18% of the company.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/coming-soon-mm2-asia-hollywood-blockbusters-nfts-and-full-recovery-fy2024-uob
Film production company and cinema operator mm2 Asia is reaching an inflection point with strong recovery ahead, writes UOB Kay Hian Research, which is keeping a “buy” call but with a higher target price of 11.5 cents, from 9.5 cents previously.
In a Feb 14 note, analysts at the brokerage expect earnings to post a sharp recovery from FY2022 onwards, driven by all three segments.
“Cinema attendance is expected to recover as the majority of Singapore’s and Malaysia’s populations are vaccinated, a robust pipeline of core production business of $150 million to $190 million in the next two to three years, and resumption of in-person concerts,” the analysts write.
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time of esg taggings 0.044962432933971286
https://www.theedgesingapore.com/news/kopi-c-company-brew/mm2-asia-innovating-cutting-edge-content
Media and entertainment industry veteran Melvin Ang is no stranger to courage and tenacity, values which form the backbone of his distinctive never-say-die attitude.
These are attributes that stood Ang in good stead through the founding, development and expansion of Singapore Exchange (SGX)-listed entertainment group mm2 Asia — a growth journey that has spanned 12 years.
“Grit and resilience are values that are important to me, and also particularly relevant in the current climate,” says Ang, founder and executive chairman of mm2 Asia.
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time of esg taggings 0.025089634116739035
https://www.theedgesingapore.com/news/company-news/sale-mm2-asias-cinema-business-kingsmead-hold
The proposed sale of mm2 Asia’s cinema business to Kingsmead Properties will not be going ahead. The sale was supposed to have been completed by Dec 31, 2021.
On Jan 3, mm2 Asia announced that Kingsmead has opted to exchange the $6 million deposit for the execution of the term sheet for 75 million newly-issued shares in mm2 Asia at 8 cents apiece.
mm2 Asia, on July 27, 2021 , announced that it was selling the 80% interest it holds in its cinema business at a loss of $84.7 million. The sale was confirmed on Aug 30, 2021 .
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https://www.theedgesingapore.com/news/reits/legal-proceedings-against-dxc-technology-services-over-payment-default-keppel-dc-reit
The manager of Keppel DC REIT, on March 21 announced that Keppel DC Singapore 1 has commenced a suit against DXC Technology Services Singapore in Singapore’s High Court.
Keppel DC Singapore 1 is the master lessee and appointed facility manager of the data centre located at 25 Serangoon North Avenue 5.
The dispute is said to pertain to DXC’s partial default of payment in connection with the provision of colocation services at the data centre.
DXC has disputed its liability to make payment.
According to the REIT manager, a portion of the revenue from Keppel DC Singapore 1, which is generated from its management of the data centre, is payable to Keppel DC REIT, under the lease and facilities management arrangement between Keppel DC Singapore 1 and Keppel DC REIT.
The revenue includes amounts generated from colocation services provided to customers like DXC.
The amount being disputed is around $14.8 million over a four-year period from April 1, 2021, to March 31, 2025.
The affected occupancy is approximately 0.4% of Keppel DC REIT’s total attributable lettable area as at Dec 31, 2021.
The impact arising from the disputed sum per annum is approximately 2.0% of Keppel DC REIT’s distributable income for the financial year ended Dec 31, 2021.
The dispute is said to not have a material impact on the REIT’s overall financial performance.
The manager adds that despite various commercial discussions and mediation between itself, Keppel DC Singapore 1 and DXC, the parties have not been able to arrive at a mutually acceptable resolution.
Further updates will be provided.
Units in Keppel DC REIT closed 2 cents higher or 0.89% up at $2.28 on March 21.
Photo: TES
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time of esg taggings 0.04821302695199847
https://www.theedgesingapore.com/capital/brokers-calls/analysts-stay-positive-keppel-dc-reit-trimmed-tps
CGS-CIMB and DBS Group Research analysts observe upbeat FY2021 earnings reported by Keppel DC REIT (KDC), driven by acquisitions, AEIs, and higher occupancy rate.
However, for CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee, they’ve lowered their target price on this stock to $2.70 from $2.78 previously, to take into account higher cost of equity assumptions in view of the increasing interest rate environment.
The analysts, who are keeping their “add” call on KDC, noted that its FY2021 revenue increased 2.1% y-o-y to $271.1 million, driven by asset enhancement initiative contributions from Dublin and Singapore assets, full-year contribution from Kelsterbach and Amsterdam DC, as well as the acquisitions of Eindhoven and Guangdong DC.
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time of esg taggings 0.021675035124644637
https://www.theedgesingapore.com/capital/results/keppel-dc-reit-reports-2hfy2021-dpu-4927-cents-28-y-o-y
Keppel DC REIT has reported a distribution per unit of 4.927 cents, up 2.8% y-o-y for 2HFY2021 ended Dec 2021. Distributable income for the same period was up 6.6% y-o-y to $87.4 million, on the back of a 4% y-o-y dip in revenue to $135.9 million.
The higher income can be attributed to contributions from new acquisitions such as the Kelsterbach Data Centre in Germany (May 2020), Amsterdam Data Centre (December 2020) and Eindhoven Campus (September 2021) in the Netherlands.
In addition, the completion of Intellicentre 3 East Data Centre (IC3 East DC) development at Intellicentre Campus in Sydney, Australia in July 2021; as well as the completion of asset enhancement initiatives at data centres in Dublin and Singapore in 1Q 2021 helped too.
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time of esg taggings 0.047300046076998115
https://www.theedgesingapore.com/capital/sgx-research-series-10-10/lhn-offers-next-generation-space-optimisation-services
1. Could you elaborate on LHN’s business segments?
Headquartered in Singapore, LHN Limited is a real estate management group and logistics service provider with strong presence across Asia. The group has a distinguishing ability to generate value for its landlords and tenants through its expertise in space optimisation. The group also provides complete facilities management and logistics services, which serve to complement its space optimisation business.
The group currently has three main business segments which are fully integrated and complementary to one another:
article_here
time of esg taggings 0.024877386167645454
https://www.theedgesingapore.com/news/offer/singapore-og-shares-surge-18-upon-privatisation-offer
Shares in Singapore O&G opened at 29.5 cents on the morning of March 9, after the company requested for the lifting of its trading halt after market close on March 8.
The share price represents an 18% surge from the company’s last-closed share price of 25 cents.
The share price surge came after a privatisation offer was made by NewMedCo at 29.5 cents apiece for all the shares in Singapore O&G on March 7.
The offer price represents a premium of around 15.69% over the last transacted price per share of 25.5 cents on March 3, being the last trading day before Singapore O&G’s request for a trading halt.
According to the company, the offer presents shareholders with a “clean cash exit opportunity” to realise its investment in its shares at a premium.
It adds that the trading volume of shares in the company have been generally low with an average daily trading volume of around 116,730 shares, 75,127 shares, 96,852 shares and 138,135 shares over one-, three-, six- and 12 months up to March 3.
Each of these figures represent less than 0.03% of the total number of issued shares within the company.
Following the completion of the offer, Singapore O&G will be delisted. It will become a wholly-owned subsidiary under NewMedCo.
According to the statement put out by UOB on behalf of NewMedCo, Singapore O&G is “unlikely to require access to Singapore equity capital markets to finance its operations in the foreseeable future” as it may tap on other fund sources.
In addition, Singapore O&G will be able to save on expenses that come with maintaining its listed status.
NewMedCo is a consortium made up of Hanaan Health Group, as well as some of Singapore O&G’s executive directors Beh Suan Tiong and Heng Tung Lan.
Hanaan Health Group, which owns a 57.3% stake in NewMedCo, is the sponsor of the group. It is held by three shareholders, Stork Health Holdings; Dymon special purpose vehicle (SPV), which is wholly-owned by Dymon Asia; Dr Lim Cheok Peng; and Quek Hong Sheng Roy.
Dr Lim is a Fellow of the Royal Colleges of Physicians of Edinburgh and Glasgow and the Academy of Medicine Singapore, with over 40 years of healthcare experience. He was appointed as chairman of the Kidney Dialysis Foundation Limited in August 2019. He also previously served as managing director of IHH Healthcare.
Quek is currently a director at Mediacorp, Leap Philanthropy, the Kidney Dialysis Foundation and the SingHealth Fund-Changi General Hospital Institutional Fund. He is also the chairman and founding governor of St. Joseph's Institution International School and St. Joseph's Institution International Elementary School.
As at 10.30am, shares in Singapore O&G are trading 4.5 cents higher or 18% up at 29.5 cents, representing a 52-week high.
Photo: Bloomberg
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time of esg taggings 0.02546120504848659
https://www.theedgesingapore.com/capital/results/ix-biopharma-reverses-losses-net-profit-37-mil-1hfy2022-out-licensing-wafermine
iX Biopharma has reported net profit of $3.7 million for the 1HFY2022 ended December, reversing from its loss of $2.8 million in the same period the year before.
1HFY2022 earnings per share (EPS) stood at 0.49 cents from the loss per share of 0.41 cents in the 1HFY2020.
Revenue surged nearly 16 times to $13.2 million in the 1HFY2022 from $830,000 due to the income from the out-licensing of Wafermine to Seelos Therapeutics in November 2021.
article_here
time of esg taggings 0.04479859699495137
https://www.theedgesingapore.com/news/corporate-moves/ix-biopharma-aims-stronger-growth-momentum-seelos-licensing-deal
iX Biopharma, a Singapore-listed specialty pharmaceutical company with expertise in drug delivery systems, has worked consistently on developing a wide range of medications, closing deals and partnerships, and improving investments in medical technology to capture a share of the multibillion-dollar global drug market.
On Nov 24 last year, the company announced an outlicensing agreement for its Wafermine drug worth more than $300 million (excluding royalties) with Nasdaq listed Seelos Therapeutics. Under the agreement, Seelos will provide the regulatory, clinical development and US market knowledge to register and commercialise Wafermine and other products related to ketamine — a medicine used to relieve pain.
Dr Janakan Krishnarajah, iX Biopharma’s COO cum chief medical officer, explains why Seelos was chosen. “Seelos has a portfolio of ketamine drugs, which means that they know the drug well, and know how to develop it and export it,” says Krishnarajah in an interview with The Edge Singapore. “They also had a strategy to build up ketamine as a franchise, which was important.”
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time of esg taggings 0.0230346720200032
https://www.theedgesingapore.com/capital/brokers-calls/analysts-trim-apac-realtys-tp-due-adverse-impact-property-cooling-measures
Analysts have trimmed their target prices and earnings forecasts for APAC Realty to reflect the slower property transaction environment on the back of the cooling measures announced last December.
DBS Group Research, RHB Group Research and CGS-CIMB Research analysts have lowered their target prices to 67 cents, 75 cents, and 93 cents, respectively. Their previous target prices are 88 cents, 90 cents and $1.
RHB’s Vijay Natarajan, who has a “hold” call on APAC Realty says the recent hike in additional buyer stamp duties and property taxes is expected to have a negative impact on investment demand and high-end property purchases.
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time of esg taggings 0.04560914495959878
https://www.theedgesingapore.com/capital/results/apac-realtys-fy2021-net-profit-rises-116-shareholders-rewarded-4-cents-final
In FY2021, APAC Realty’s net profit more than doubled to $35.3 million on the back of an FY2021 revenue increased 87.2% or $344.7 million primarily due to a 68.0% increase in brokerage income from resale and rental of properties to $449.1 million, and a 141.4% increase in brokerage income from new home sales to $281.0 million. APAC Realty’s property agents operate under the ERA brand.
In FY2021, Singapore’s developers sold 15,146 private residential units (including Executive Condominiums), an increase of 38.4% from 10,940 units in FY2020. During this period, ERA was appointed sole or joint marketing agent to 23 projects with a total of 8,428 units. Based on market data, the Group’s estimated market share of the new homes segment was 33.7% in FY2021, up from 28.9% in FY2020.
In addition, APAC Realty has secured marketing agent mandates for 33 quality residential projects as of Feb 21. These market agent mandates comprise close to 7,200 new home units launched and to be launched in FY2022. During the year, Singapore’s private residential resale market recorded sales of 20,530 units, 87.9% higher than 10,927 units transacted in FY2020. The HDB resale market remained relatively healthy with 31,017 transactions completed in FY2021, an increase of 25.3% from 24,748 units sold in FY2020.
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time of esg taggings 0.02385589387267828
https://www.theedgesingapore.com/capital/brokers-calls/bhg-retail-reit-expected-see-stable-growth-moving-forward
Analysts from PhillipCapital and DBS Group Research believe that the worst is over for BHG Retail REIT. The REIT is also expected to see growth from here on.
In its latest FY2021 ended December 2021 results, BHG Retail REIT reported an 11.3% y-o-y increase in distribution per unit (DPU) to 2.17 cents. This came on the back of a 16.6% y-o-y increase in gross revenue to $70.6 million and a 14.9% growth in net property income (NPI) to $70.6 million.
Following this, DBS Group Research analysts Woon Bing Yong and Derek Tan are keeping their “hold” recommendation on the REIT with a target price of 57 cents.
“While FY2020 was undoubtedly the bottom of BHG REIT’s three-year declining DPU trend, its recovery is expected to be slower, as FY2021 DPU numbers did not bounce back as quickly as anticipated,” say Woon and Tan. “Still, we maintain our FY2022 estimates, as Hefei Mengchenglu is set to make a bigger contribution this year following disruptions from its asset enhancement initiatives (AEI) in FY2021.”
Additionally, the analysts note that the REIT has exposure to three properties located in Hefei and Chengdu, where urban disposable income grew at five-year compound annual growth rates (CAGRs) of 8.5% and 7.9%, respectively, outpacing Beijing’s 7.2%. “Correspondingly, retail spending in Hefei and Chengdu grew at faster five-year CAGRs of 16.6% and 7.3%, versus 5.7% in Beijing,” say Woon and Tan. “With the ongoing tenancy remix, we believe BHG REIT’s assets in Hefei and Chengdu have the potential to deliver strong organic growth in the medium term.”
However, Woon and Tan note that their estimates for the FY2022 are on the conservative side, as they are the only brokerage covering the counter.
Meanwhile, BHG Retail REIT has also caught the attention of PhillipCapital.
In an unrated report dated Mar 2, analyst Vivian Ye observes how the recovery in its gross revenue and property income has been underpinned by healthy occupancy. “The main contributor to the increase was Beijing Wanliu mall, with gross revenue increasing 19% to $20 million,” says Ye. “No rental rebates were given in 2HFY2021. Rents for new and renewed leases continued to recover.”
However, Ye also pointed out higher property operating expenses with BHG Retail REIT. “Property operating expenses increased 17.3% y-o-y, due to the gradual resumption of malls’ normal operations and absence of Covid-19 subsidies from the government,” Ye says.
On a whole, BHG Retail REIT’s portfolio has proved its resilience, says the analyst, with continued recovery in portfolio occupancy and higher gross revenue, despite the Covid-19 Omicron wave in 2HFY2021. “Gearing remained healthy at 34.1%, providing comfortable debt headroom to pursue M&A growth opportunities,” she adds.
As at 3.20pm, share price in BHG Retail REIT is trading flat at 54 cents.
Photo: BHG Retail REIT
article_here
time of esg taggings 0.04882102319970727
https://www.theedgesingapore.com/capital/deals-joint-ventures-alliances/gs-holdings-inks-mou-long-chao-shenzhen-develop-new
GS Holdings’ indirect wholly-owned subsidiary, Sing Zhong Brands Management, is entering into a non-binding memorandum of understanding (MOU) with Long Chao Shenzhen, to develop new franchisees for the F&B brands that are owned by Sing Zhong and Long Chao.
This MOU aims to promote, through the F&B concepts, an exchange of cultural understanding across borders, and to enable prospective franchisees to grow their business portfolios in overseas markets mainly Singapore, China and other Asian countries with the support of the franchising programs created and operated by Sing Zhong.
Pursuant to the MOU, Sing Zhong is responsible for creating and developing 10 PRC-influenced F&B brands, and 10 Singapore-influenced F&B brands; engaging a third-party consultant, Action Culture, for its expertise in the conceptualisation, branding, and marketing of the F&B brands; marketing and selling of franchise of selected F&B brands owned by Long Chao Shenzhen to its existing and new clientele (franchisees) in the territories of the Asian countries; and paying Long Chao Shenzhen service fees of 50% based on gross initial franchise fees generated and received from the franchise sales of brands owned by Long Chao Shenzhen to its existing and new clientele.
article_here
time of esg taggings 0.04037296096794307
https://www.theedgesingapore.com/news/china-focus/china-removes-key-hurdle-allow-us-full-access-audits
China modified a decade-long rule that restricted offshore-listed firms’ financial data sharing practice, potentially removing a key hurdle for US regulators to gain full access to auditing reports of the majority of the 200-plus Chinese companies listed in New York.
The revised draft rules deleted the requirement that on-site inspections should be mainly conducted by Chinese regulatory agencies or rely on their inspection results, the China Securities Regulatory Commission said in a joint statement with other regulators Saturday.
The CSRC will provide assistance during the process through a cross-border regulatory cooperation mechanism. Meanwhile, all companies listed directly or indirectly overseas will be responsible for properly managing confidential and sensitive information, and protecting national information security, according to the statement.
The amendments mark an unusual reversal by Beijing, potentially ending a decades-long dispute that escalated when the US set a 2024 deadline for kicking non-compliant businesses off the New York Stock Exchange and Nasdaq. The compromise would also show China’s willingness to balance national security concerns with the needs of investors and businesses at a time when its economy faces numerous challenges.
US-listed Chinese stocks climbed Friday following a Bloomberg News report that regulators in Beijing are working on a framework that’ll grant their US counterparts full access to auditing reports for a majority of the companies listed in New York. The compromise will allow most firms to keep their US listings, according to people familiar with the matter.
The revisions, pending public feedback until April 17, show “China has always been open to cross-border audit cooperation,” the CSRC said in a Q&A statement, adding that the moves will provide support for “safe and efficient” cross-border cooperation including joint inspections.
Under the rules issued in 2009, working papers drafted onshore during the process of overseas share sales were forbidden from being shared with any foreign entities or individuals. Working papers that concern state secrets or national security were also prohibited from being stored, processed or transmitted in non-confidential computer systems.
The CSRC said it’s rare in practice that companies need to provide documents containing confidential and sensitive information. However, if required during the auditing process, they must obtain approvals in accordance with related laws and regulations, the watchdog said.
Chinese authorities are trying to bolster investor confidence following a series of crackdowns that have rattled markets. Promising greater policy stability, China’s top financial regulator last month said it supports overseas listings, prospects for which have been clouded by a raft of new rules and a stand-off with the US over access to company audits.
There are more than 200 Chinese firms listed in the US as American Depository shares, with a combined market capitalization of US$2.1 trillion as of May 2021, including eight national-level state-owned enterprises, according to a report from the US government. The threat of delisting and China’s regulatory crackdowns have spurred a selloff in the Nasdaq Golden Dragon China Index, which lost about half its value in the past year.
The latest changes could help minimize national security risks in listed firms’ shared data, enabling them to open audit papers to US regulators when needed.
Still, Securities and Exchange Commission Chair Gary Gensler this week tamped down speculation that a solution was imminent, signalling that only total compliance with audit inspections will allow the companies to keep trading on US markets.
China could simply move a firm to a non-US bourse if it wants to shield financial documents, Gensler said in an interview. He also pointed out that the American law focuses on non-compliant countries rather than specific companies. So if one request is blocked, it means the requirement isn’t being satisfied.
China tightened scrutiny on overseas listings last year after the New York initial public offering of ride-hailing giant Didi Global Inc., which proceeded despite regulatory concerns. In December it imposed new restrictions on offshore offerings by firms in sectors that are off-limits to foreign investment.
The securities regulator proposed that any company whose listing could pose a national security threat be banned from proceeding. Firms could use the so-called variable interest entities (VIEs) structure to pursue overseas IPOs after meeting compliance requirements, the CSRC had said.
VIEs, a vehicle pioneered by Sina Corp during a 2000 IPO and used by numerous technology giants to list in the US, have been a perennial worry for global investors since they operated in a legal grey zone. Chinese regulators only started acknowledging their existence in a series of new rules over the past year.
“The CSRC will firmly support companies to choose their listing destinations based on their own will,” the regulator said on Saturday.
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time of esg taggings 0.060641366988420486
https://www.theedgesingapore.com/news/reits/dasin-retail-trust-talks-sell-two-its-malls
Dasin Retail Trust is in talks to sell two of its assets, retail malls Shiqi Metro Mall and Xiaolan Metro Mall to an entity linked to one of the trust’s substantial shareholders. The two malls, last valued at RMB4.8 billion, account for 42.8% of total assets by value.
Both malls are located Zhongshan of China’s Guangdong province.
The potential buyer Wuhu Yuanche Bisheng Investment Center, is described by Dasin as a  buyout fund with institutional and private investors.
The potential buyer will be managed jointly by GSUM Real Estate Fund Management Co and a subsidiary of Sino-Ocean Capital Holding, which in turn is a substantial unitholder of Dasin Retail Trust via its affiliate, Glory Class Ventures, which holds a stake of around 6.3% in Dasin Retail Trust at March 18.
"The Properties may be acquired [through] a put option proposed to be granted by the purchaser to the Trustee-Manager," the announcement says. While an MOU has been signed, Dasin’s manager states that it is not prevented from seeking or hearing better offers from other potential buyers, “thereby having the potential to unlock greater value from the Trust’s portfolio of properties.”
If the sale of the two malls are realised, the proceeds will be used to pare down debt and for working capital. If the two malls are sold at valuation, it would be accretive for unitholders as Dasin is trading at just 0.22x its net asset  value of $1.40.
Besides these two malls, Dasin holds five other malls as part of its portfolio.
According to Dasin’s website, as at Dec 31 2020, this portfolio was valued at around RMB11.6 billion ($2.3 billion).
Dasin Retail Trust closed March 18 at 31 cents, up 3.33% for the day but down 18.42% year to date. The trust's distribution per unit in FY2021 was 4.67 cents, translating into a historice DPU yield of 15%.
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time of esg taggings 0.04322879994288087
https://www.theedgesingapore.com/news/cryptocurrency/hatten-land-signs-agreement-new-partner-crypto-mining-activities
Hatten Edge, the wholly-owned subsidiary of Hatten Land, has entered into a crypto mining facility and support services agreement on March 30 with an unnamed new partner to carry out cryptocurrency mining activities in Malaysia.
According to Hatten Land, its new partner and its owner have hundreds of crypto mining rigs operating within Southeast Asia currently, including Peninsular Malaysia, East Malaysia and Laos, and endeavours to expand its crypto mining operations with Hatten in Melaka.
Under the agreement, the partner will deliver 50 sets of brand new Bitmain Antminer S19J Pro as pilot batch machines by the end of April to locations designated by Hatten Edge.
The partner also has the option to deliver an additional 500 sets of crypto mining equipment.
Hatten Edge will then provide crypto mining services, as well as other services such as the installation and operation of the equipment required at its malls in Malaysia.
The term for the provision of the services will begin on the date of the agreement of the crypto mining equipment and continue for the operating lifetime of the mining equipment or upon termination of the agreement.
Both companies will share the net proceeds of the cryptocurrencies mined.
As such, the agreement is expected to contribute positively to its net assets and financial performance for the financial year ending June 30. In addition, the group expects to expand and scale up its crypto mining operations after commencing since January this year.
“Since we started crypto mining operations in January 2022, we are now more well-equipped and better positioned than ever to expand our operations. Large scale, high-quality, low-cost crypto mining facilities are highly sought-after in Malaysia,” says Dato’ Colin Tan, Hatten Land’s executive chairman and managing director.
“With our growing track record, we aim to build on this momentum to secure new partnerships and expand into one of the leading cypto currency mining service providers in Asia,” he adds.
Hatten Land to accept major cryptocurrencies
Further to its statement, Hatten Land also announced that it will accept major cryptocurrencies as a mode of payment for the transactions of property sale, retail and hospitality businesses under its property portfolio from April 1.
The cryptocurrencies that will be accepted include Bitcoin, Ethereum and Tether. Other major cryptocurrencies will be assessed on a case-by-case basis.
The group is also in discussions with a registered licensed partner in Malaysia to jointly collaborate in terms of enabling seamless, efficient and convenient payment experiences for the group’s purchasers and customers.
Hatten Land’s current development portfolio comprises five integrated mixed-use development projects and retail malls that have a combined built-up area of 6 million square feet.
“With the popularity of cryptocurrencies, there is a growing trend by consumers to use it as a payment method for a range of products and services, both online and offline,” says Tan. “Together with the rise of the digital economy in Asia, there are strong incentives for us to integrate cryptocurrencies in our business activities to access new demographic groups and liquidity pools.”
Shares in Hatten Land closed flat at 4.3 cents on March 30.
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time of esg taggings 0.05753819388337433
https://www.theedgesingapore.com/news/cryptocurrency/hatten-land-install-and-operate-over-2500-crypto-mining-rigs-2022
Hatten Land announced, on Jan 13, that its wholly-owned subsidiary Hatten Edge has entered into a cryptomining facility and support services agreement with Singapore Myanmar Investco (SMI), a wholly-owned subsidiary of Mainboard-listed SMI Vantage.
The agreement follows the memorandum of understanding (MOU) signed between both parties, as was announced on Sept 16, 2021.
Under the agreement, SMI will deliver 50 sets of crypto mining equipment for the pilot run of Hatten Land’s crypto mining operations by January.
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time of esg taggings 0.02502699918113649
https://www.theedgesingapore.com/news/cryptocurrency/hatten-land-confirms-shipment-first-crypto-mining-rigs-proceeds-contribute
Hatten Land has confirmed the shipment of its first 80 crypto mining rigs to its crypto mining facilities in Melaka, Malaysia. Upon their delivery and installation, the rigs will start to mine bitcoins in January.
The group had previously entered into a partnership agreement with Frontier Digital Management to install and operate 1,000 crypto mining rigs within Hatten Land’s properties.
Frontier Digital has also been granted the license by Hatten Land to install, operate, manage and maintain crypto mining rigs at malls or locations owned or managed by the latter.
article_here
time of esg taggings 0.04167593689635396
https://www.theedgesingapore.com/news/fintech/hatten-lands-ecxx-global-receives-recognised-market-operator-license-mas
The Monetary Authority of Singapore (MAS) has granted the Recognised Market Operator (RMO) license to ECXX Global on Jan 5.
ECXX Global, which is 19.3% owned by Hatten Land, is a pioneer in operating digital asset exchanges using blockchain technology.
The company had previously received MAS’s approval in August 2020 to launch an asset-based digital securities exchange platform.
article_here
time of esg taggings 0.020921620074659586
https://www.theedgesingapore.com/capital/ma/arion-entertainment-sets-sights-diversify-money-lending-through-proposed-acquisition-win
Fame Harvest – a wholly-owned subsidiary of publisher Arion Entertainment – has entered into a sale and purchase agreement with Gorman Kwong for the acquisition of 1 million ordinary shares in the issued and paid-up capital of Win Win Finance.
This represents the entire issued capital of Win Win Finance.
The aggregate consideration for the purchase of the sales shares is HK$1.25 million, or around $0.22 million.
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time of esg taggings 0.03540535713545978
https://www.theedgesingapore.com/capital/brokers-calls/kimlys-direction-and-interests-are-still-aligned-it-enters-new-era-rhb
RHB Group Research analyst Jarick Seet has kept his “buy” call on Kimly with an unchanged target price of 46 cents after the coffeeshop operator decided not to engage former executive chairman Lim Hee Liat and former executive director Chia Cher Khiang as its independent consultants.
While Kimly had previously wanted to continue tapping the duo’s experience and expertise following their conviction for breaching the Securities and Futures Act (SFA), the group’s stakeholders felt otherwise.
Both men own a combined stake of 41.3% in the coffeeshop operator.
In his report dated March 15, Seet remains positive on Kimly’s outlook as he sees the resolving of Lim and Chia’s case with the commercial affairs department (CAD) as “a new era”.
“The end of this challenging period should be positive for Kimly in the long run, as it should finally remove the overhang on the company’s outlook,” he writes.
“It also opens the door for management to reshuffle its team, and move forward with its growth strategy,” he adds.
Despite Kimly’s decision to can its plans to engage Lim and Chia as independent consultants, Seet believes that Lim is likely to continue to share his expertise and experience with the company “in some capacity”.
“From the recent privatisation of its peer Koufu at 16x FY2022 P/E, Kimly is now trading at a much lower 11x FY2022 P/E,” notes the analyst. “Due to its acquisition of Tenderfresh as well as its further plans to expand the number of its coffee shops, we remain positive on the group.”
As at 12.49pm, shares in Kimly are trading 0.5 cent lower or 1.28% down at 38.5 cents, or an FY2022 P/B of 3x and a dividend yield of 5.7%.
Photo: Albert Chua/The Edge Singapore
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time of esg taggings 0.047305802814662457
https://www.theedgesingapore.com/news/company-news/kimly-cans-plan-engage-former-chairman-and-executive-director-independent
Coffeeshop chain Kimly has scrapped its plan to engage former executive chairman Lim Hee Liat and former executive director Chia Cher Khiang as “independent consultants”.
The company had wanted to keep tapping the duo’s experience and expertise, following their recent conviction for breaching the Securities and Futures Act, which bars them from holding directorships or managing companies for five years.
“The company, Mr Lim and Mr Chia have mutually decided not to proceed with the engagement, in view of feedback and concerns received from stakeholders following the announcement,” states Kimly on March 12.
Kimly had announced on March 2 plans to engage Lim and Chia as “independent consultants” and has engaged HR firm Willis Towers Watsons Consulting (Singapore) to help determine the kind of hourly rates the duo ought to be paid.
“The board is grateful for and takes these feedback and concerns seriously, and will further evaluate and consider the matter together with its professional advisers, engage appropriately with stakeholders as well as take additional guidance from its sponsor and regulators,” the company adds.
In the meantime, Lim and Chia have reiterated their “continued commitment and support to the Kimly’s growth and expansion.”
“With their 41.3% substantial shareholdings, Mr Lim and Mr Chia’s interests are aligned with other shareholders in ensuring the group continues to perform well,” the company adds.
On Feb 16, Lim was fined $150,000 and Chia was fined $100,000 for not disclosing that Lim held a 30% stake in an entity called Asian Story Corporation that Kimly had wanted to acquire for $16 million back in 2018, which would count as an interested party transaction.
Kimly shares closed on March 11 at 39 cents, unchanged for the day but down 6.1% year to date.
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time of esg taggings 0.04218928492628038
https://www.theedgesingapore.com/news/company-news/kimlys-former-executive-chairman-and-executive-director-plead-guilty-charges
Lim Hee Liat, the former executive chairman and founding shareholder of Kimly, has pleaded guilty to the charges brought against him by the Commercial Affairs Department (CAD).
Kimly’s former executive director, Vincent Chia Cher Kiang, has likewise pleaded guilty to the charges against him by the CAD.
The charges levelled against Lim and Chia were in relation to Kimly’s failure to notify the Singapore Exchange (SGX) that its acquisition of Asian Story Corporation was an interested person transaction (IPT).
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time of esg taggings 0.040907545015215874
https://www.theedgesingapore.com/issues/stocks-watch/kimly-wfh-norm-brings-unique-fb-stock-closer-heartlanders
There is a certain attraction to being a rarity. With food court operator Koufu ’s privatisation bid, Kimly will become the only F&B operator with a focus in the heartlands, where business remains resilient amid the pandemic.
CGS-CIMB analyst Kenneth Tan, who has a “buy” call and 56 cents target price on the stock, notes that Kimly is currently trading at an undemanding valuation of about 13 times FY2022 P/E (–1 standard deviation from fiveyear historical mean), a significant discount to Koufu’s privatisation valuation of 16 times P/E.
Even as more companies allow their employees to return to their offices, work-fromhome (WFH) arrangements have also become the new norm for many. Kimly’s extensive network of coffee shops in the heartlands gives it a “captured” pool of customers in the form of residents, whether dining-in or takeaway.
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time of esg taggings 0.03405247605405748
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-genting-singapore-nanofilm-technologies-sgx-kimly-digital-core
Genting Singapore Price target: Maybank Securities “hold” 83 cents
‘Grey clouds’ linger over Genting Singapore
Maybank Securities analyst Yin Shao Yang has maintained a “hold” recommendation on Genting Singapore as “grey clouds” linger around the counter.
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https://www.theedgesingapore.com/capital/brokers-calls/rhb-ups-kimlys-tp-46-cents-strong-fy2021-results-cad-case-no-longer-overhang
RHB Group Research analyst Jarick Seet has kept “buy” on Kimly with a higher target price of 46 cents from 42 cents previously.
The buoyant outlook is based on Kimly’s strong FY2021 results , where its total revenue grew 13.2% y-o-y to $238.6 million. Its PATMI stood 55.7% higher y-o-y at $39.3 million. Kimly’s FY2021 ended on Sept 30, 2021.
“Going forward, with the Tenderfresh acquisition, its bottomline and profitability should increase further. We expect the company to continue expanding organically, by opening more outlets and refurbishing existing ones,” writes Seet in a Jan 18 report.
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time of esg taggings 0.030662103090435266
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-grab-marco-polo-marine-cdl-hospitality-trust-kimly-capitaland
Grab Holdings Price target: DBS Group Research “buy” US$9
Multi-sector leadership but competition looming
DBS Group Research has initiated “buy” on Grab Holdings with a 12-month target price of US$9 ($12.19), representing a 25% upside to its last-traded price of US$7.22 on Jan 3. The company has a December year end.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/kimly-prime-heartlands-gem-cgs-cimb
As food court operator Koufu on Dec 29, 2021, announced that it intends to delist and privatise, coffeeshop operator Kimly is set to be the prime heartlands F&B gem.
To recap, Koufu received from Dominus Capital (a holding company wholly owned by the group’s founders) an all cash 77 cent per share offer to take the company private. The offer price is a 15.8% premium to its last traded price.
Reasons for the offer were: Koufu does not need funding from equity capital markets; low trading liquidity of Koufu shares; for greater management flexibility in both strategy and operations; and removal of compliance costs associated with maintaining a listing status.
article_here
time of esg taggings 0.04533063108101487
https://www.theedgesingapore.com/capital/brokers-calls/hrnetgroup-gets-buy-rhb-amid-expectations-continued-outperformance-fy2022
RHB Group Research is maintaining its “buy” call and target price of $1.01 on professional and flexible staffing firm HRnetgroup.
This is pegged to 14x FY2022 Price-to-Earnings and is expected to give the counter a 31.2% upside from its 77-cent price, analyst Jarick Seet writes in an Apr 5 note.
His move follows the announcement that the group’s subsidiary RecruitFirst has extended its contract with the Ministry of Education (MOE) for another four years till 2025, to run the Focus Language Assistance in Reading (FLAiR) programme.
“We expect [the programme] to be worth several millions of SGD,” says Seet.
The FLAiR programme provides language assistance to children in the kindergarten 2 grade in around 400 pre-school centers in Singapore. Some 4,000 children been benefitting from this programme annually since its inception in 2018.
Aside from this, Seet reckons that HRnet is likely to have “continued outperformance” in FY2022 ending in December.
This follows its strong performance in FY2021, where revenue came in at $590.5 million (up 36.4% y-o-y) and PATMI (profits after taxes minus interest) was up by 39.7% to $65.5 million.
Seet’s expectations of a positive FY2022 performance comes as the “management remains bullish that both its recruitment segments across all geographies will continue to see strong demand for their services”.
“As a result, we remain bullish that such strong performance will continue and the continue will benefit from higher margins as well,” he explains.
Seet adds that HRnetgroup has been an “efficiently run company” compared that its peers around the world, many of whom have been running at a loss.
The counter has also been trading at 10.6x FY022 P/E, which is lower the average multiple of its global peers.
To this end, Seet stresses that the group is a “decent proxy to the global economic recovery and should enjoy a great FY2022”.
As at 1.55pm on Apr 5, shares in HRnet were trading flat at 77.5 cents.
Cover image: file photo
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time of esg taggings 0.027679492020979524
https://www.theedgesingapore.com/capital/contracts/hrnetgroup-signs-4-year-contract-moe
HRnetGroup announced that its subsidiary RecruitFirst, which specialises in flexible staffing services, has successfully secured a further four-year contract from 2022 to 2025 to run the Focus Language Assistance in Reading programme (FLAiR Programme) for Singapore’s Ministry of Education (MOE) in Singapore.
The FLAiR Programme provides language assistance to children in Kindergarten 2 at up to 400 pre-school centres across Singapore. The lessons are conducted by contractors deployed by RecruitFirst and benefit up to 4,000 children each year.
RecruitFirst has previously partnered MOE on the FLAiR programme since 2018.
Jacelyn Chua, group business leader of RecruitFirst says, “The FLAiR Programme is a meaningful partnership for RecruitFirst, as we continue to work with the Ministry to lift up children who are lagging behind in their command of the English Language, to prepare them well for future learning before they enter primary school."
Shares in HRnetGroup closed at 78 cents on Mar 30.
Photo: HRnetGroup
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time of esg taggings 0.02420618711039424
https://www.theedgesingapore.com/capital/brokers-calls/higher-dividends-and-ma-cards-best-yet-come-hrnetgroup-analysts
After 14% y-o-y growth in 2HFY2021 net profit, “the best is yet to come” for HRnetGroup Limited , say CGS-CIMB Research analysts Kenneth Tan and Lim Siew Khee.
HRnetGroup provides personnel recruitment and human resource related services under two key segments: Professional Recruitment (PR) and Flexible Staffing (FS).
In a Feb 25 note, Tan and Lim maintain their “add” call on HRnetGroup, with an unchanged target price of $1.15. This represents an upside of 47.4%.
article_here
time of esg taggings 0.062885896069929
https://www.theedgesingapore.com/capital/results/hrnetgroup-delivers-record-earnings-fy2021
HRnetGroup has reported 2HFY2021 earnings of $29.6 million, up 14.2% y-o-y, bringing full year earnings to a company record high of $65.5 million, up 39.7% over FY2020.
The regional recruitment agency recorded a revenue of $315.5 million for 2HFY2021, up 41.6% y-o-y, thanks to a more active employment market.
Revenue for FY2021 reached $590.5 million, up 36.4% over FY2020.
article_here
time of esg taggings 0.038068188121542335
https://www.theedgesingapore.com/capital/results/grand-venture-technology-reports-fy2021-earnings-176-mil-2366-y-o-y
Grand Venture Technology has reported revenue of $116.3 million for FY2021 ended Dec 2021, up 89.3% from the preceding FY2020.
However, thanks to better economies of scale, the manufacturer was able to eke out better margins.
As such, earnings for the year was up 236.6% y-o-y to $17.6 million, from just $5.6 million reported for FY2020.
article_here
time of esg taggings 0.04043628997169435
https://www.theedgesingapore.com/capital/brokers-calls/acquisitions-gvt-booster-shot-company-kgi
KGI Securities’ research team has maintained their “buy” call and target price of $1.37 on Grand Venture Technology, following the manufacturer’s recent acquisitions of Formach Asia and J-Dragon (Suzhou) announced last December. The brokerage says these acquisitions will help augment GVT’s in China and Malaysia, and help it gain access to clients in the aerospace, medical and semiconductor industries.
KGI notes that street estimates have 2 “buy” calls and one “hold”, with an average target price of $1.71. At this level, it is a 56% upside from its last closed price of $1.10 on Feb 11.
GVT’s FY2021 and FY2022 earnings per share (EPS) is forecasted to grow 124% y-o-y and 80% y-o-y, respectively, bringing down forward P/E to 22x and 12x.
article_here
time of esg taggings 0.06474598194472492
https://www.theedgesingapore.com/issues/stocks-watch/grand-venture-technology-going-ma-spree-lay-foundation-growth
From a quiet IPO in January 2019, pre­cision manufacturing firm Grand Ven­ture Technology (GVT) has gone from an IPO price of 27.5 cents to a closing price of 99 cents on Jan 24, marking an over three-fold increase in capital gains for investors who bought its IPO shares at the time of its listing.
The company had a quiet 2019 and 2020, with the share price not going far from its IPO price. However, things changed after an investment of almost $30 million by private equity fund Novo Tellus in January 2021.
With its war chest further beefed up with a $28.5 million share placement in September 2021, GVT has gone on an acquisition spree, spending some $24.4 million to acquire two other companies with complementary capa­bilities as well as additional land adjacent to its existing facilities so that it can build up its capacity to take on more work for new customers.
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time of esg taggings 0.04444421990774572
https://www.theedgesingapore.com/capital/brokers-calls/cgs-cimb-positive-grand-venture-technologys-acquisitions-ups-tp-174
CGS-CIMB Research analyst William Tng has kept “add” on Grand Venture Technology (GVT) following its two new acquisitions in December 2021.
“We are positive on these acquisitions as they add production capacity and allow growth with new customers and penetration into new industries,” writes Tng in a Jan 4 report.
“We expect further mergers and acquisitions (M&A) and potentially further capacity expansion in FY2022. Our FY2022 and FY2023 earnings per share (EPS) are raised by 4.0% and 5.0% respectively as we factor in contributions from J-Dragon. For now, we do not assume any earnings impact from the Formach acquisition,” he adds.
article_here
time of esg taggings 0.0346808519680053
https://www.theedgesingapore.com/news/property/grand-venture-technology-acquires-third-facility-malaysia-44-mil-set-gear
Homegrown precision manufacturing solutions provider Grand Venture Technology (GVT) has acquired another manufacturing facility in Penang for RM13.5 million ($4.4 million) on Jan 5, making this the third such acquisition in Malaysia in two years.
The latest acquisition comes as the company gears up to meet the anticipated growth in demand for its services from the semiconductor industry.
The two-storey facility measures 49,000 sq ft sits on a 74,000 sq ft plot of land at the Penang Science Park. It is located between two other facilities acquired by the company in February 2020 and March 2021 respectively. The latest acquisition is also just down the road from its factory in Malaysia.
article_here
time of esg taggings 0.04578391299583018
https://www.theedgesingapore.com/capital/brokers-calls/brokers-digest-econ-healthcare-ihh-healthcare-uob-food-empire-netlink-nbn
Econ Healthcare Price target: DBS Group Research “hold” 28 cents
Review on investment strategy
In his Jan 13 note, DBS Group Research analyst Paul Yong has kept his “hold” call on Econ Healthcare (Asia) and 28 cents price target, after the nursing home operator sold all its shares in Hong Kong-listed Crosstec Group Holdings and will book a loss of $3.4 million.
article_here
https://www.theedgesingapore.com/capital/brokers-calls/citibank-downgrades-netlink-sell-citing-interest-rate-hikes-and
Citibank analyst Luis Hilado has downgraded his rating for Netlink NBN Trust to a “sell” from a “buy” rating, as well as sharply dropping his target price from $1.08 to 90 cents.
In a Jan 7 report, Hilado says that Netlink’s review of its regulated asset base (RAB) rates could come “sooner than expected” from the Infocomm Development Authority, and this will cause a “period of uncertainty”, in his view.
The RAB pricing model governs the prices set for some of Netlink’s services, such as those related to residential connections, Non-residential connections, NBAP and segment fibre connections, as well as ducts and manholes service revenue.
article_here
time of esg taggings 0.044539039954543114
https://www.theedgesingapore.com/news/russia-ukraine-crisis/cromwell-european-reit-says-russia-ukraine-hostilities-have-limited
The manager of Cromwell European REIT (CEREIT) says the ongoing hostilities in Ukraine have “no direct impact” on its portfolio so far.
In a statement released on March 14, the manager of the REIT said that there were “no material issues arising from recent sanctions lists screenings, which were conducted in compliance with its regulatory obligations”.
“No CEREIT counterparties have been identified to be on any sanctions list,” adds the statement.
As at March 14, over 85% of CEREIT’s EUR2.5 billion ($3.71 billion) European portfolio is in western Europe, with about 10% in Poland and 2% in Slovakia, the two countries that share borders with Ukraine. To date, only 2% of the REIT’s leases in Poland and Slovakia are expiring in the near term.
According to the REIT manager, the majority of its tenants in Poland and Slovakia are multinational companies that include European banks, global pharmaceutical companies, as well as technology companies.
The REIT has around 50 tenants in Poland and 10 in Slovakia out of the over 800 tenants in its portfolio.
Amongst the tenants in Poland, the manager has identified eight that have some business exposure to Russia. It is still assessing any impact on their business, says the manager.
Of the tenants in Poland, the REIT has one that imports coal mined by a Russian company. The tenant is domiciled in Switzerland and occupies 400 sqm of space within the REIT’s portfolio of 1.8 million sqm.
In addition, about 95% of the REIT’s leases are “net”, whereby tenants on such leases bear their own utility costs.
Hence, there will be no material impact on the REIT from the current rise in energy prices. The ongoing refugee crisis is also not expected to disrupt rent collection.
Looking ahead, the manager says it expects energy prices and agricultural commodity prices, as well as consumer prices to remain elevated in the near term. Business activities such as real estate transactions, travel and tourism are also likely to slow down for the time being.
“Manpower shortage is expected to come into focus, as Ukraine supplies a large part of the migrant workforce in Europe. In the Czech Republic and Slovakia, many businesses that employ Ukrainian citizens have begun to report associated resourcing issues, as Ukrainian men are mobilised for military service,” says the REIT manager.
Units in CEREIT closed at EUR2.24 on March 11.
Photo: CEREIT
article_here
time of esg taggings 0.048212229972705245
https://www.theedgesingapore.com/capital/results/cromwell-european-reit-reports-28-lower-dpu-8459-euro-cents-2hfy2021
The manager of Cromwell European REIT has reported a distribution per unit (DPU) of 8.459 Euro cents in the 2HFY2021 ended December, down 2.8% from the DPU of 8.703 Euro cents.
This comes on the back of the higher base of 561.05 million units in the 2HFY2021, from the 512.21 million units in the 2HFY2020.
Total DPU for the FY2021 stood 2.6% lower y-o-y at 16.961 Euro cents.
article_here
time of esg taggings 0.02993672201409936
https://www.theedgesingapore.com/capital/reits/cromwell-european-reit-pivots-logistics-sponsor-shareholding-sees-another-change
Simon Garing, CEO of Cromwell European REIT’s (CE REIT) manager, is keen to point out that the REIT has been well-rated in Singapore Corporate Governance scores, such as Governance Index for Trusts or GIFT, and GRESB.
“Because we are a REIT with a foreign sponsor, you need the trust of the investors. So we need to show our numbers and performance because this is how you get investors to trust you,” Garing says. “Since we listed, we have been in the top 10 in GIFT — we’re now number 4,” Garing points out. “In terms of disclosure and how we convey our information, we rank very high, and this is feedback from investors.”
Since its IPO in 2017, CE REIT has traded mainly at a discount to its net asset value (NAV). As at Jan 10, its unit price is at EUR2.53 ($3.60), a few cents above its latest reported NAV of EUR2.49. In May 2020, the manager and sponsor decided that both the base fee and the property management fee would be fully paid in cash from 1Q2020 onwards, as compared to 100% and 40% in CE REIT units previously.
article_here
time of esg taggings 0.04618700803257525
https://www.theedgesingapore.com/news/reits/cromwell-european-reit-buys-three-logistics-assets-uk-and-netherlands-eur578-mil
The manager of Cromwell European REIT (CEREIT) has announced on Jan 5 that it has entered into sale and purchase agreements to acquire three logistics in the UK and the Netherlands for EUR57.8 million ($88.4 million).
“Our experienced, on-the-ground team sourced and secured all assets at a favourable blended 5.6% net operating income (NOI) yield and 3.9% below independent valuations on average,” says Simon Garing, CEO of the manager.
Post-acquisition, CEREIT’s light industrial and logistics portfolio weighting grows to 41%, in line with the manager’s stated strategy to pivot to a 50% weighing of this sector.
article_here
time of esg taggings 0.052708836970850825
https://www.theedgesingapore.com/news/company-news/no-signboard-holdings-close-its-esplanade-outlet
No Signboard Holdings says it will be closing its No Signboard Seafood Esplanade outlet at Esplanade Mall with effect from April 1.
According to a statement released by the company, it had “carefully considered the option” of keeping the outlet open till all Covid-19 restrictions were lifted.
“However, while Covid-19 dine-in restrictions have recently eased, it may take several more months before travel returns to pre-Covid-19 levels, which will continue to adversely affect the business of the No Signboard Seafood Esplanade outlet,” reads the statement.
The closure of the outlet at this time in order to reduce the company’s operating costs is said to be in the company’s “best interests” considering its current financial situation.
No Signboard will continue to operate its other outlets, namely Little Sheep Hotpot at Orchard Gateway and No Signboard Sheng Jian at Northpoint City.
According to the company, the closure of its Esplanade outlet will allow it to “focus its efforts and resources on operating the group’s casual and quick-serve restaurant outlets until further review of the evolving Covid-19 situation”.
The closure of the outlet is expected to contribute positively to No Signboard’s consolidated net tangible assets (NTA) and earnings per share (EPS) for the current FY ending Sept 30, as the Esplanade outlet was loss-making.
Shares in No Signboard Holdings last traded at 3.1 cents before its trading halt and subsequent trading suspension in January.
article_here
time of esg taggings 0.043742164969444275
https://www.theedgesingapore.com/news/company-news/no-signboard-holdings-put-subsidiary-danish-breweries-under-liquidation
No Signboard Holdings has, on the evening of March 14, announced that it will be placing its indirectly wholly-owned subsidiary, Danish Breweries, into creditors’ voluntary liquidation (CVL).
According to its statement, the Catalist-listed restaurant operator revealed that its subsidiary cannot continue its business due to its liabilities.
In addition, the group says it had decided to proceed with the CVL “due to its cash flow problems and its inability to pay its debts as they fall due”.
According to the group, the CVL will contribute positively to the group’s net tangible assets (NTA) and earnings per share (EPS) for the current financial year ending Sept 30, as the subsidiary is loss-making, says the group.
If the CVL commenced on Sept 30, 2021, the proforma effect on the NTA per share would have been at 0.14 cents instead of 0.08 cents. Similar, the loss per share would’ve eased to 1.28 cents on a proforma basis, from the 1.37 loss per share reported.
Danish Breweries was acquired by No Signboard Holdings in June 2017 and it was mainly in the business of the import, export and general wholesale trading of beer and liquor.
Shares in No Signboard last traded at 3.1 cents before its trading suspension on Jan 24.
Photo: The Edge Singapore
article_here
time of esg taggings 0.04600542597472668
https://www.theedgesingapore.com/news/company-news/no-signboard-holdings-controlling-shareholder-proposes-29-share-transfer-qm
No Signboard Holdings’ controlling shareholder GuGong has entered into a conditional sale and purchase agreement (SPA) with the founder and group CEO of Q&M Dental Group Dr Ng Chin Siau in relation to the sale of 134 million ordinary shares in the capital of the company.
This represents approximately 29% of the total issued and paid-up capital of No Signboard by GuGong to Ng, for a total consideration of $1 based on the terms and conditions of the SPA.
As a condition to the completion of the proposed share transfer, Ng and No Signboard will enter into a conditional loan agreement on terms to be agreed between the parties, pursuant to which Ng shall extend the company an interest-free unsecured loan of an aggregate principal amount of $2.6 million.
GuGong has agreed to enter into the proposed share transfer in order to secure the loan to assist the group with its working capital needs, No Signboard said.
“For the avoidance of doubt, the loan would not be sufficient to meet the working capital requirements of the company for the next 12 months. As such, the company and GuGong are currently in negotiations with other investors to secure additional financing in order to meet the working capital needs of the group, and the company shall make the relevant announcements as and when there are any material developments,” it said.
The shareholders and directors of GuGong are executive chairman and CEO Lim Yong Sim (Lin Rongsen) as well as chief operating officer and executive director Lim Lay Hoon. As at the date of SPA, GuGong holds an aggregate of 253 million shares, representing approximately 54.91% of No Signboard’s total issued and paid-up share capital.
As the shares in the company have been suspended from trading since January 24, the proposed share transfer is subject to the necessary approval to be obtained from SGX-ST.
Shares in No Signboard last traded at 3.1 cents.
article_here
time of esg taggings 0.06303909211419523
https://www.theedgesingapore.com/news/company-news/no-signboard-holdings-receives-letters-demand-falling-behind-rent-two-outlets
No Signboard Holdings has received two letters of demand from solicitors for falling behind on rent at its Centrepoint and Paya Lebar Quarter outlets.
In a filing on the Singapore Exchange (SGX) on Feb 3, No Signboard Holdings says it has received a letter of demand from solicitors acting for Frasers Property Centrepoint, the landlord of 176 Orchard Road #B1-07 The Centrepoint, occupied by the company’s wholly-owned subsidiary, Hawker QSR, for payment of the sum of $12,161.10 in rental and other monies.
The second letter of demand comes from solicitors acting for Milano Central, the landlord of 10 Paya Lebar Road, Provisional Unit No. #01-37 and part of #01-38 Outdoor Refreshment Paya Lebar Quarter, occupied by Hawker QSR, for payment of the sum of $163,965.56 in rental and other monies.
article_here
time of esg taggings 0.045585661893710494
https://www.theedgesingapore.com/news/company-news/no-signboard-holdings-requests-voluntary-trading-suspension
No Signboard Holdings has requested for the conversion of its trading halt on Jan 19, to a voluntary trading suspension on Jan 24.
The company’s board of directors, in an SGX filing, stated that the company was unable to continue according to the Catalist rules of the SGX-ST.
This is due to the “continued challenges in the operating environment of the local food and beverage (F&B) industry”, which includes the dining restrictions caused by the pandemic.
article_here
time of esg taggings 0.024150567827746272
https://www.theedgesingapore.com/capital/company-news/clearbridge-healths-covid-19-art-test-receives-approval-philippines
Clearbridge Health announced that the Labnovation Technologies Covid-19 antigen rapid test (ART) kit, which is imported by Clearbridge to be used in the Philippines, has been approved by the Food and Drug Administration (FDA) of the Philippines for self-testing.
The FDA of the Philippines approved two self-administered Covid-19 ART Test Kits, one from Labnovation and one from Abott Panbio. These kits can be used by individuals to detect SARS-CoV-2 antigen from nasal swabs of probable Covid-19 patients.
The group is currently the only importer and distributor of Labnovation’s Covid-19 ART test kit in the Philippines as the group has submitted and obtained the relevant regulatory approval for the ART Test Kit to be used in the country.
article_here
time of esg taggings 0.03833552193827927
https://www.theedgesingapore.com/capital/brokers-calls/sac-capital-lowers-propnexs-tp-178-it-expects-fy2022-see-correction-its-sales
SAC Capital has kept its “hold” recommendation on PropNex despite its solid year in FY2021 amid a robust property market.
Analyst Peggy Mak has also lowered her target price estimate to $1.78 from $1.94 in her March 8 report. The lower target price comes as Mak sees that the group will experience a correction in sales volume for the FY2022 due to the low inventory of new units at a record low of 14,154 units.
There will also be a lower number of new launches during the year at around 7,000 units, compared to the average of 10,000 units annually. The cooling measures introduced in December 2021 are also likely to affect sales for the listed property developer, says the analyst.
“Potential buyers might also hold back in anticipation of new supply coming on stream. HDB plans to ramp up BTO launches to 23,000 yearly in 2022 and 2023 (FY2021: 17,100). 1HFY2022 government land sales (GLS) will yield 2,800 new units. More aggressive GLS is expected in 2HFY2022, translating into new launches in 2023,” she writes. “We estimate private new sales will fall 30%, private resale volume 20% lower and flat HDB demand.”
That said, prices will be sustained by the lower supply, rising construction costs and higher costs for new HDB flats,” says Mak.
“We expect prices of private resale to be stable, while HDB resale prices might gain 3% in FY2022,” she adds.
That said, FY2023 will look to be a better year for PropNex as it sees a recovery in sales volume, says Mak.
“Besides GLS, over 31,000 HDB flats (FY2021: [around] 26,000) will reach minimum occupation period in 2022. These HDB upgraders will look to acquire private residential units, with profits from sale of flats. Border re-opening will draw demand from expatriates and foreign buyers, notwithstanding higher ABSD and property tax,” she writes. “The drawback is heightened uncertainties caused by Russia/Ukraine conflict that could hurt consumers’ sentiment, especially for big ticket items”.
To this end, Mak has lowered her earnings estimates for the FY2022 by 5.3%.
“Earnings are expected to fall 21.7% in FY2022, but rise 9.3% in FY2023. Dividend payout could be sustained to yield 5.3% and 5.8% in FY2022 and FY2023,” she says, as she ascribes an FY2023 P/E of 10x plus cash holdings of $146 million to arrive at her new target price.
Shares in PropNex closed 4 cents lower or 2.37% down at $1.65 on March 8.
Photo: Samuel Isaac Chua/The Edge Singapore
article_here
time of esg taggings 0.04845690098591149
https://www.theedgesingapore.com/capital/brokers-calls/analysts-mixed-propnex-warnings-caution-ahead
Analysts are mixed on PropNex, considering its strong FY2021 results but with more caution over earnings and the impact of property cooling measures.
On Feb 24, PropNex reported earnings of $14.3 million for the 4QFY2021 ended December, 90.5% higher than earnings of $7.5 million in the same period the year before.
The surge in earnings were mainly attributable to higher agency and project marketing revenue.
article_here
time of esg taggings 0.04666019999422133
https://www.theedgesingapore.com/capital/results/propnex-reports-905-surge-4qfy2021-earnings-proposes-final-dividend-7-cents-share
PropNex has reported earnings of $14.3 million for the 4QFY2021 ended December, 90.5% higher than earnings of $7.5 million in the same period the year before.
The quarter’s earnings have brought the SGX-listed property agency’s FY2021 earnings to $60.0 million, more than double the earnings of $29.1 million in the FY2020.
Earnings per share (EPS) for the 4QFY2021 and FY2021 stood at 3.86 cents and 16.22 cents respectively on a fully diluted basis.
article_here
time of esg taggings 0.02089460683055222
https://www.theedgesingapore.com/news/results/propnex-about-report-1-bil-revenue-fy2021
Is leading property agency PropNex about to report revenue crossing $1 billion for FY2021?
This possibility was raised following responses made by the company on Feb 21 in response to queries from the Singapore Exchange on Feb 17.
The queries arose following feedback from an attendee at a private event on Jan 9 during which the company executive chairman and CEO, Ismail Gafoore, is said to have disclosed to the company’s agents that the group’s full year commission for 2021 is more than $1 billion. Hence, one could deduce that the group’s full-year revenue would exceed $1 billion.
article_here
time of esg taggings 0.045168807031586766
https://www.theedgesingapore.com/capital/brokers-calls/sac-capital-lowers-international-cement-groups-tp-62-cents-lower-bottom-line
SAC Capital analyst Lam Wang Kwan has kept “buy” on International Cement Group (ICG) as he deems the counter’s foundation as “concrete”.
The group’s results for the FY2021 ended December stood above Lam’s expectations, with revenue of $181.4 million, up 28.1% y-o-y, and net profit of $26.5 million, which increased by three-fold.
According to Lam, the group’s net profit stood 15.8% higher than his full-year estimates, which was mainly due to the stronger-than-expected revenue growth, which also surpassed his forecasts by 15.7%.
That said, Lam sees near-term headwinds such as the Kazakhstani tenge depreciating against the US dollar (USD) by 17%. The depreciation will see the group incurring forex losses as they pay engineering procurement construction (EPC) contractors in USD, while its operating expenses are paid in the Tenge.
On the back of this, Lam has estimated some $8 million of forex loss in the FY2022.
The group is also likely to face affected margins, with an estimated 1.2 percentage point erosion on its gross margin due to the higher oil prices, which is driving up cost of sales.
Furthermore, the group is expecting to face increased competition in Tajikistan, with another cement producer adding a big cement plant in the country. The plant will be operational in 2023.
“The entry of the new competitor is expected to negatively impact cement price in the region and reduce ICG’s Tajikistan sales by an estimated 10% in FY2023 and FY2024 annually, before growing at 3% thereafter following consolidation in the market,” writes Lam in his March 23 report.
On the back of this, Lam has lowered his target price estimates to 6.2 cents from 8.9 cents previously as he expects the group’s FY2022 bottom line to drop by 18.6% due to forex loss.
He does, however, estimate the group’s topline to grow 7.7% in FY2022 due to the addition of two new cement plants in Kazakhstan.
“Sharcem, in East Kazakhstan, is expected to commence commercial sales in 2HFY2022, however we expect to see significant contribution in FY2023. With an annual production capacity of one million tonnes, we expect Sharcem to add [an estimated] $60 million and [around] $15 million to the top and bottom line in FY2023,” writes the analyst.
“In addition, construction of the Korcem cement plant in the Jambyl region is also underway. The output will be exported to Kyrgyzstan in 2025. ICG will fund the construction of Sharcem through shareholders’ loan and internal resources, while Korcem is funded via vendor financing and internal resources. Cement demand in Central Asia is underpinned by the reconstruction, urbanisation and infrastructure growth plans,” he adds.
To be sure, Lam sees the group recording its next earnings uplift in FY2023 with Sharcem’s contribution. This translates to an expected 22.4% growth in revenue and 60.3% growth in net profit with the absence of a significant forex loss.
“While we are optimistic about ICG’s operations and long term growth plan, the revised price reflects the higher cost of equity required by the current market environment,” says Lam.
As at 9.27am, shares in International Cement Group are trading 0.1 cent higher or 3.7% up at 2.8 cents, or an FY2022 P/B of 0.6x.
article_here
time of esg taggings 0.0501580408308655
https://www.theedgesingapore.com/news/company-news/international-cement-group-says-cement-plant-kazakhstan-has-reopened-stabilised
After closing its cement plant located in Kazakhstan’s Almaty region over the weekend, International Cement Group has decided to reopen its plant due to the “stabilised” situation in the country.
Kazakhstan had been facing unrest since demonstrations began on Jan 2 in the town of Zhanaozen.
“Since a state of emergency and nationwide curfew still remain in place, management will continue to be vigilant and take the necessary precautionary measures to ensure the safety of our employees,” reads the group’s statement released on Jan 13.
article_here
time of esg taggings 0.04596760589629412
https://www.theedgesingapore.com/news/company-news/international-cement-group-temporarily-closes-cement-plant-amid-kazakhstan-unrest
Amid the unrest in Kazakhstan, International Cement Group says it “remains cautious” and has decided to temporarily close its cement plant in the country’s Almaty region.
The closure was done in a bid to protect its employees and the plant.
With this, the group says it is “unable to quantify the extent of the financial impact of the unrest”.
article_here
time of esg taggings 0.024587486870586872
https://www.theedgesingapore.com/news/brokers-calls/kgi-keeps-buy-fortress-minerals-back-rising-iron-ore-prices
KGI Securities has kept its “buy” call for Fortress Minerals with a target price of 60 cents on the back of rising iron ore prices.
In its March 7 note, the brokerage notes that iron ore prices rose for the week as the war in Ukraine as well as recovering Chinese demand drove prices higher. Iron ore on the Singapore Exchange April 62% Fe Futures settled near US$160 per tonne, it adds.
“Chinese port data showed that iron ore inventory slipped 430,000 tonnes to 153.6 million tonnes. Blast furnaces have been building stocks as restrictions around the Winter Olympics have eased. The ongoing war and limited prospect for an immediate resolution may mean that iron ore prices may be supported for some time,” the brokerage wrote.
Fortress Minerals reported disappointing 3QFY22 results, where its net profit declined 35% y-o-y to US$2.8 million due to lower selling prices. The company achieved an average realised selling price of US$87.44 versus US$110.06 in the previous corresponding period. KGI expects the decline to reverse in the next quarter thanks to the rising iron ore prices.
Fortress Minerals has prompted a query from the Singapore Exchange Regulation (SGX RegCo) after its share price surged to 49.5 cents as at 2.16pm on March 4, 12.5% higher than the last-closed price of 44 cents.
In its response issued the same day, Fortress Minerals said it is not aware of any information not previously announced concerning the company, its subsidiaries or associated companies which might explain the trading. The company added that it is not aware of any other possible explanation for the unusual price movements of its shares.
As at 9.52am, shares in Fortress Minerals are trading 3.5 cents higher or 6.93% up at 54 cents.
article_here
time of esg taggings 0.040333247976377606
https://www.theedgesingapore.com/news/sgx-query/fortress-minerals-triggers-sgx-query-share-price-spike
Fortress Minerals has prompted a query from the Singapore Exchange Regulation (SGX RegCo) after its share price surged to 49.5 cents as at 2.16pm, 12.5% higher than the last-closed price of 44 cents on March 3.
In its filing as at 2.26pm on March 4, the market regulator asked Fortress Minerals to reveal any possible explanation for the trading, and that it is compliant with the listing rules.
As at 2.36pm, shares in Fortress Minerals are trading 5.5 cents higher or 12.5% up at 49.5 cents.
article_here
time of esg taggings 0.030675756046548486
https://www.theedgesingapore.com/capital/results/fortress-minerals-reports-345-lower-earnings-us28-mil-3qfy2022
Fortress Minerals has reported earnings of US$2.8 million ($3.8 million) for the 3QFY2021 ended Nov 30, 2021.
Earnings per share (EPS) for the quarter stood at 0.57 cents, down 34.5% y-o-y from 0.87 cents during the same period last year.
However, revenue for the 3QFY2021 grew 7.5% y-o-y to US$11.0 million on the back of higher sales volume.
article_here
time of esg taggings 0.047613083850592375
https://www.theedgesingapore.com/news/tech/revez-launches-first-web-based-augmented-reality-content-management-system-region
SGX-listed Revez Corporation has launched Singapore’s first codeless web-based augmented reality (WebAR) asset content management system (CMS), PLONK.
The new CMS allows everyone to create WebAR assets with no coding knowledge required, where users can easily create, publish, track and analyse their 3D AR-powered digital campaigns in a few simple steps.
As Covid-19 continues to rage around the world, many companies have relied on cloud-based, on-demand platforms to provide scalable solutions “as-a-service”. Revez has thus deployed cutting-edge technology to enable PLONK users to access WebAR technology with little upfront investment in tools, equipment or specialists.
article_here
time of esg taggings 0.04509967193007469
https://www.theedgesingapore.com/capital/brokers-calls/rhb-maintains-buy-prime-us-reit-after-investor-session
RHB Group Research’s Vijay Natarajan has maintained his “buy” call on Prime US REIT with an unchanged target price of US$1.02 ($1.38) after the brokerage hosted an investor’s session with the REIT.
In his report dated March 30, Natarajan reveals key discussion points at the session covered the continued leasing momentum, the impact of rising interest rates, acquisition plans, and return-to-office trends.
From the meeting, he says that with Singapore office REITs rebounding strongly at above 10% year-to-date (y-t-d), he believes US office S-REITs – which have been laggards – may enjoy a similar rerating, adding that valuations are “undemanding”, standing at 0.9x P/BV with a 9% yield.
Natarajan observes that office leasing momentum remains strong, with active lease signings seen in its 1QFY2022 ended March 31 despite the impact of Omicron infections.
More specifically for the US, office leasing volumes across the US have turned around since the second half of 2021, with Prime seeing a doubling of leasing volume h-o-h in 2HFY2021 ended Dec 31. New leases accounted for about 21% of leases signed last year.
Another factor in favour of Prime, Natarajan says, is the office supply in its sub-market, which remains relatively limited. For FY2022, about 11% of its leases by income are due for renewal.
Notably, he highlights that a tenant at Reston Square, Virginia (Whitney, Bradley & Brown, which makes up about 2.6% of income) will be leaving in end-2QFY2022 after being acquired.
With leasing activity expected to pick up further in 2HFY2021, he expects its portfolio occupancy rate to improve slightly by end-2022.
Furthermore, he forecasts that positive rental reversions will continue, as blended in-place rental rates are still 7.3% below asking rates.
This is coupled with an increasingly optimistic outlook from industry consultants, with mid-single-digit rental reversions expected.
“For FY2021, rent reversions stood at +14%, which should contribute positively in FY2022,” Natarajan thinks. “In addition, 99% of its leases have built-in rent escalations of about 2%.”
For investors who are worried about rising interest rates, the analyst points out that a high proportion of Prime’s debt is hedged, with 87% of Prime’s debt is hedged.
As such, he says the impact on distribution per unit DPU from a 1% increase in interest rates is minimal, estimating it to be lower than a 0.1 cent drop, or 1% lower.
Additionally, Prime also has extension options for its existing debt which, if exercised by paying a slight upfront cost, would extend its weighted average debt maturity to 3.7 years, compared to  3.1 years without extension.
Natarajan highlights that only 2% of debt is expiring in FY2022 and, if extension options are exercised, there will be no debt maturing until 2024.
Moving forward, he thinks that the REIT’s healthy balance sheet presents room for acquisitions, especially from tier-2 growth cities, where it still sees increasing demand from companies.
This is on the back of a growing educated workforce and growing demand for lifestyle amenities.
“We believe acquisitions to the tune of US$100-200 million are likely in 2H22, with the REITs modest gearing of 37.9% providing some leverage to increase its debt mix. With cap rates in its current and target markets ranging 5.5-7%, we believe there is still good potential for yield-accretive acquisitions,” he says.
At 12.41pm, shares of Prime US REIT are trading at 75.5 US cents, with a FY2022 return on average equity of 7.1% and dividend growth rate of 3.2%
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