| LIM & TAN | UOB KAYHIAN |
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Civmec Limited / Civmec ($0.66, up 0.005) has been issued with a notice of award for a major construction contract in the resources sector as well as several infrastructure and maintenance projects, raising its order book to more than A$1.15 billion. The major construction contract is for the Mount Holland lithium project in Western Australia being undertaken by subsidiaries of Wesfarmers and Sociedad Química y Minera de Chile S.A. through their 50:50 joint venture manager Covalent Lithium Pty Ltd. The Mount Holland mine site will produce lithium concentrate, which will be transported to a refi nery that Civmec has been tasked to construct.
We continue to remain constructive on Civmec and it remains amongst our top picks for 2022 given its undemanding valuations of 8-9x PE versus expected earnings growth of 20-25% over the next 2-3 years. Price to book of 1.1x is also undemanding versus its expected Return on Equity of >15%. Its dividend which has been on a rising trend is also expected to trend higher to 3-4 cents (in FY22/23).
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BRC Asia (BRC SP) FY21: Excellent Results, Well-Positioned For A Recovery
BRC’s FY21 net profit of S$47m (+131% yoy) exceeded our expectation by 12%. Core operations in construction saw a sequential recovery as orderbook grew to S$1.2b. BRC declared a final dividend of 8 S cents with a total dividend of 12 S cents for FY21. We expect BRC to deliver double-digit growth in 2022 as it continues to ride on the recovery trend in construction demand. Maintain BUY with a 9% higher target price of S$1.91.
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CGS CIMB |
LIM & TAN |
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Singapore Exchange A primer on SPACs
■ We looked at SPAC regulations round the globe and found that SGX’s rules are largely aligned with the US’s, and less rigid than HKEX’s. ■ Redemption rights and detachable warrants in SG are similar with the US. In HK, only professional investors allowed to invest in SPAC until it has merged. ■ Media reports of potential SPAC sponsors (Tikehau Capital, Vertex Holdings, Novo Tellus) hint of tech-related or new economy listings on SGX. ■ Upgrade to Add. We believe progressive SPAC listings may lift the valuations of the broader SG market. Re-rating catalyst: stronger trading volumes.
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Sembcorp Industries (S$2.00, up 1 cent) disclosed that Sembcorp Utiliies, a wholly-owned subsidiary of Sembcorp Industries (Sembcorp) and BCG Energy (BCGE), a wholly-owned subsidiary of the Bamboo Capital Group (BCG), announce today that they have signed a collaboration agreement for the development of renewable projects in Vietnam. BCG is one of the pioneers in Vietnam’s renewable energy industry with strong knowledge of the local market and has extensive experience in developing large scale infrastructure projects. Sembcorp has invested in Vietnam for more than 20 years through its integrated energy and urban management experƟ se, and is looking to scale up its renewables porƞ olio in the country. Sembcorp’s Vietnam Singapore Industrial Park (VSIP) is also a leading name in integrated townships and industrial parks in Vietnam. The signing of this agreement is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the fi nancial year ending December 31, 2021. At $2.00, market cap of Sembcorp Industries is S$3,575mln, trailing 12-mth P/E is 11.3x, dividend yield is 3.0% and its current P/B is 1.1x. According to Bloomberg consensus, there are nine buy and two sell recommendaƟ ons and the average of the various analysts’ target price on Sembcorp Industries is $2.55, representing a potential upside of 27.5%. |
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