UOB KAYHIAN

Phillip 2Q22 Singapore Strategy – A stagflation shelter

• The STI was up 9.1% in 1Q22. This was its best performance since an 11.3% rally in 1Q21.
• The global economy is facing stagflation shock. Inflation made worse by the Russia-Ukraine conflict and global growth to decelerate as interest rates climb.
• The Singapore market stands out as a shelter in the current stagflation environment. Bank earnings will enjoy a lift as interest-rates rise and reopening of borders a further boost for corporate earnings.

Read More ...

REITs – Singapore
Implications Of Yield Curve Inversion On S-REITs

Risk of the US economy slipping into a recession has increased with an inversion of the
US yield curve since 1 Apr 22. S-REITs underperformed after the inversion in Nov 06 but performed in line with the broader market after the inversion in Aug 19. The RussiaUkraine war creates heightened uncertainties and has pushed bond yields higher. BUY ART (Target: S$1.29), FCT (Target: S$2.98), MCT (Target: S$2.48) and MINT (Target: S$3.72). Maintain OVERWEIGHT.

Read More ...

UOB KAYHIAN

CGS CIMB

Jiutian Chemical Group (JIUC SP)
High ASPs To Remain Firm As Supply Remains Limited

We are seeing a widening of gross profitability from high product ASPs and a slower rise in raw material prices. We do not expect any significant new production capacity for dimethylformamide and methylamine due to environmental concerns remaining at the forefront of the Chinese government’s agenda, while ample supply of methanol will put a cap on feedstock costs. Maintain BUY with higher target price of S$0.168 (from S$0.138) after re-basing our valuation year from 2021 to 2022. 

Read More ...

Yangzijiang Shipbuilding
The wait is over

■ YZJ’s spin-off group is named YZJ Financial Holdings Ltd (YZJFH). EGM for the approval of the spin-off will be held on 18 Apr 2022 at 4pm.
■ We expect YZJFH to be listed by end of April. S$1bn will be deployed in Singapore in investment and fund/wealth management.
■ YZJFH will focus on pre-IPO, clean/new energy, strategic investments in the shipping industry, new economy, student housing, data-centre, SPAC pipe.
■ Maintain Add and upgrade our TP to S$2.41, based on SOP valuations of pro-forma core shipbuilding business and YZJFH.

Read More ...