ANALYSTS SAY: Buy, Sell, Hold (9 June)

CGS CIMB

Yangzijiang Financial Holding (YZJFH SP)
Undervalued Gem Carved Out With Strong Catalyst From Share Buyback

YZJFH is trading at an attractive level and valuation, at around 25% below its first day IPO opening price and about 50% discount to its book value of S$1.08. Having S$4.2b of debt investments, YZJFH had a solid earnings track record of S$321m-345m in 2019-21, implying a PE ratio of about 6x and dividend yield of above 6%. Based on YZJFH’s historical mean P/B of 0.84x pre-split, this implies an intrinsic value of S$0.91. YZJFH’s P/B is trading at a large discount vs peers. Catalyst: Share buyback.

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Boustead Projects Limited
Charting next leg of growth

■ Boustead Projects (BP) reversed from losses in FY21 to post a core net profit of S$11.3m for FY22, above our expectations.
■ While construction demand has improved, BP remains cautious in tendering due to escalating cost pressures. We think margins could improve in 2H23F.
■ BP has a strong war chest to chart its next leg of growth by expanding its presence in Vietnam. Reiterate Add with a lower TP of S$1.25.

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CGS CIMB

UOB KAYHIAN

Boustead Singapore Ltd
Look forward to a better FY23F

■ FY22 results below expectations, with core net profit declining 28% yoy on weaker performance across. DPU remains healthy at 4 Scts (4.2% div. yield).
■ We see FY23 to be a year of recovery. Geospatial segment, Boustead’s key profit contributor, should resume growth with structural tailwinds intact.
■ Improving sentiment for global energy sector should also aid orderbook recovery for engineering segment. Maintain Add with lower TP of S$1.30.

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Telecommunications – Malaysia
1Q22 Results In Line, Lacklustre Near-term Performance As Telcos Mull 5G

Sector earnings rose 7% yoy in 1Q22 thanks to strong fixed broadband take-up and higher contribution from Axiata. This was partly offset by Digi’s and Maxis’ weak earnings amid higher network investments. Post results, we trim sector earnings by 3% and expect the sector to contract 3% yoy as single-digit service revenue growth will be dragged down by higher depreciation and the one-off prosperity tax for 2022.
Maintain MARKET WEIGHT. Our top pick is TIME given its good growth prospects. 

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Genting Bhd (GENT MK)
TauRx – could it really be worth USD15b, as guided?

Maintain BUY call and MYR5.96 TP for now
Ahead of 20%-owned TauRx announcing more details of its recent Phase 3 trial results later today, we try to derive an indicative valuation for it. In our opinion, TauRx is worth ≥USD1.1b and there are grounds for it to be worth ≤USD15b if its Alzheimer’s drug (i.e. HMTM) is effective and commercialised. Under a ‘blue sky’ scenario, we postulate that GENT shares could be worth as much as MYR8.84 each. Our estimates, BUY call and MYR5.96 SOP-based TP are maintained for now.

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SBS Transit Ltd (SBUS SP): One door closes, another opens [HOLD, TP S$3.28]

■ Stabilising domestic COVID-19 situation drives average daily rail ridership to c.891,000 in April 2022

■ Strong net cash position could point to higher dividends in medium term

■ Upcoming bus package expiries a concern, but SBST likely to retain majority

■ Maintain HOLD with TP of S$3.28; suspending coverage due to reallocation of resources