ANALYSTS SAY: Buy, Sell, Hold (6 Apr)

CGS CIMB

Yangzijiang Shipbuilding (Holdings) (YZJSGD SP)
Still A Compelling Story

While the spin-off of YZJ’s investments business could be a near-term share price catalyst, we also point out that the company had a busy 1Q22 in delivering more than
12 vessels, an admirable job given that it was a holiday-shortened quarter with the Chinese New Year in February. In addition, we highlight that based on second-hand values of its 26 vessels, YZJ’s shipping assets are worth double its current carrying value. Maintain BUY. Target price: S$1.95.

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ISDN Holdings Ltd
Industrial automation outlook still positive

■ We think ISDN remains keen on growth.
■ In our view, devoting more effort on software solutions could help improve
profit margins.
■ Reiterate Add with unchanged TP of S$0.96.

Industrial automation demand remains strong
In its 2021 Annual Report released on 28 Mar 2022, ISDN President Mr. Teo Cher Koon commented that he sees continued demand for industrial automation as countries recover from the Covid-19 pandemic and address rising wage cost by stepping up automation efforts. ISDN believes that the Asia Pacific factory automation and industrial controls market represents an opportunity of over US$60bn and could grow at CAGR of 10.87% between 2021 and 2026.

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MAYBANK KIM ENG

MAYBANK KIM ENG

SP Setia (SPSB MK)
Strengthen the foundation

Enhancing business sustainability; U/G to BUY
While SPSB strives to achieve its MYR4b sales goal (-6% YoY) for FY22, it is also aiming to strengthen its financials by paring down its net gearing (0.6x as at Dec 2021) via non-core land sales, reducing inventories, optimizing land use by bringing in strategic partners and improving/increasing digitalization. No change to our earnings forecasts and MYR1.42 TP (0.4x
FY22 PBV). We upgrade SPSB to BUY in view of a total return of >15%. 

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TSH Resources (TSH MK)
Unlocking MYR712m in value for its North Kalimantan land?

Not the usual straight forward deal, in our view We are overall positive on its proposal to dispose 3,819 ha (or 9% of group planted; gross area to be disposed: 13,898 ha) oil palm planted area for IDR2.429tr (or MYR712m) cash; giving an estimated net disposal gain of MYR360m. However, there is no proposal to reward shareholders with oneoff dividends. There is also no certainty the deal could be completed by 1Q23, given the onerous conditions precedent. Further clarification is required. Positively, if it materialises, TSH’s proforma net gearing will dip to 5% (from 45% as at end-2021). We make no changes to our EPS forecasts.
TSH remains a HOLD with unchanged TP of MYR1.60 on 20x FY23E PER peg, at -1SD 5Y mean. We prefer KLK MK (BUY, TP: MYR29.60).

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