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Genting Singapore (GENS SP)

Journey of recovery begins with this step


Upgrade to BUY with higher TP of SGD0.95 (+22%) Phase 3 of Singapore’s reopening will begin on 28 Dec 2020. In addition, the Pfizer-BioNTech vaccine will arrive soon and Singapore will gradually reopen its borders. Our earnings estimates are unchanged but we lower our WACC from 14.5% to 11.8% as we revert to the five year mean beta of 1.2x (1.5x previously) and roll forward our valuation base year from endFY20E to end-FY21E to derive a revised DCF-based TP of SGD0.95 (from SGD0.78). Upgrade GENS to BUY (from HOLD).


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Small Mid-Cap Strategy – Singapore

Position For Recovery Plays Backed By Deep Value


We highlight stocks based on the following criteria: a) laggards backed by solid earnings and healthy balance sheet (Food Empire, Frencken and InnoTek); b) beneficiaries of China’s recovery (Jiutian Chemical, China Sunsine and Sunpower); and c) beaten-down stocks with the ability to recover quickly post-COVID-19 (BRC, Kimly and Koufu). We continue to recommend investors to selectively accumulate deep-value names with good track records. Our top picks are BRC Asia, Food Empire, Frencken and InnoTek.


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Gaming – Malaysia

A Leading COVID-19 Vaccine-led Recovery Play


Despite the commendable stock price recoveries since promising COVID-19 vaccine efficacy data were revealed by Pfizer-Moderna in Nov 20, the casino subsector still promises significant capital recoveries as valuations are expected to partially price in 2022 earnings (full earnings recovery to pre-pandemic levels). Near-term catalysts include partial border reopening and special dividends. Both the casino and NFO subsectors feature generous dividend yields. Maintain OVERWEIGHT.


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Steel – China

Soaring Iron Ore Price Weighing On Margins; Prefer Flat Over Long Products


Global iron ore price spiked to a record high of US$155/tonne on 11 Dec 20, driven by optimism on China steel mills’ demand outlook and potential supply disruption. On the other hand, CRC spread has been improving in 4Q20, on the back of strong downstream demand recovery. Looking ahead, we prefer flat products (CRC/HRC) over long products (rebar) as we foresee better demand recovery outlook from the automobile, home appliances and machinery sectors. Maintain MARKET WEIGHT.


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LionelLim8.16Check out our compilation of Target Prices

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