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STRATEGY – SINGAPORE Alpha Picks: Adding Frencken And China Sunsine
Our portfolio gained 1.4% mom in Feb 21 and was in line with the FSSTI’s gain of 1.6% mom. Notable outperformers include Food Empire (+25.5% mom), Innotek (+12.9% mom) and Yangzijiang (+8.6% mom) while our short call on SIA (+21.2% mom) and Thai Bev (-10.9% mom) worked against us. For Mar 21, we add Frencken and China Sunsine while removing First Resources and BRC Asia.
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Telecommunications – Malaysia Washout 2020; Earnings To Recover 12% In 2021
2020 sector earnings fell 7% yoy amid the COVID-19 pandemic. With the reopening of the economy, we project earnings to recover by 12% yoy in 2021. Key drivers include continuous pre-to-postpaid conversion, bundled services and higher subscriber base for fixed-line players. Separately, the recently-launched MyDIGITAL and JENDELA initiatives by the government will accelerate network fiberisation and the rollout of 5G services by end-21. Maintain MARKET WEIGHT on the sector. Top picks: TM, Axiata
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UOB KAYHIAN |
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Yinson (YNS MK) Making Progress In The Energy Transition Space
Yinson’s Indian solar subsidiary RSE has secured more solar capacities, marking Yinson’s further and early expansion in the energy transition space. While this is positive, we continue to exclude RSE’s profit forecasts and SOTP accretion given the country risk. This may change if we observe consistent earnings delivery, as Yinson has a proven execution ability. Despite this, there is ample upside as FPSO wins are the more material and near-term catalyst. Retain BUY. Target: RM7.45.
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Trip.com (TCOM US) 4Q20: Solid Domestic Recovery; Brighter Outlook For 2022
Trip.com delivered a strong set of 4Q20 results. Net revenue fell 41% yoy (vs a 48% yoy drop in 3Q20) to Rmb5b, in line with consensus estimate. Non-GAAP net profit slid 10% yoy and 24% qoq to Rmb1.1b, beating street estimate of Rmb188m, due to the pick-up in income from associates. We maintain BUY with a higher target price of US$48.00, due to a brighter outlook for travel in 2H21/2022 and higher operating leverage as a result of cost-cutting measures during the pandemic.
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Check out our compilation of Target Prices
