buy sell hold 2021




UMS Holdings Ltd
Boost from lower tax rate

■ UMS announced that it will write back S$15.0m of tax provision in its upcoming 3Q22F results on reinstatement of its pioneer tax status.

■ We estimate that this increases its FY22F EPS by 20.8% and its FY23-24F tax rate could fall to 13.0%, versus our previously assumed 18.6%.

■ TP rises to S$2.17 as we now assume a lower 13.0% tax rate. Maintain Add. 


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Eco World Development Group Bhd
Attractive dividend yields in store

■ 9MFY10/22 core net profit came in below expectations, due to higher-thanexpected share of loss from Eco World International.

■ 10MFY10/22 new property sales were stronger at RM3.44bn (vs. RM3.11bn in 10MFY21). Its second interim DPS of 1 sen was above expectation.

■ Reiterate Add, with a revised TP of RM0.82, given the decent dividend yields, strong property sales momentum and improving balance sheet.


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Property Devt & Invt
Slower new home sales in Aug

■ There was a mom decline in Aug home sales due to lack of new launches.
■ Two new project launches in Sep should boost upcoming new sales.
■ We stay sector Overweight due to inexpensive valuations. Our sector top picks: CIT, CLI and UOL.


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REITs – Singapore
S-REITs Bi-Weekly Updates (1-15 Sep 22)

It is a tumultuous time for S-REITs with elevated inflation dominating headlines. The sector has nevertheless eked out a small gain of 0.5%. S-REITs are resilient due to their stable cash flows. Investors are likely to turn their attention to S-REITs when economic growth and inflation start to moderate more meaningfully. Our bottom-up and diversified BUY picks are FCT (Target: S$2.74), LREIT (Target: S$0.99), MINT (Target: S$3.36) and MLT (Target: S$2.08). Maintain OVERWEIGHT.


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Sembcorp Industries
Energy bill cap expected to have subdued impact


 The UK’s new leader, Liz Truss, has capped consumer energy bills at £2,500 (S$4,081) for two years to cushion rising energy prices. The price cap imposed, limits the amount energy suppliers can charge for its tariffs.

 Impact on SCI expected to be subdued as the price cap will be funded by the UK government. The UK is also not a significant contributor to its overall portfolio of energy assets.

 Review of the UK’s net zero strategy is underway, which could slow move to renewables. Liz Truss has announced dozens of new North Sea licenses in an effort to boost domestic oil and gas production.

 We maintain ACCUMULATE with unchanged target price of $3.68. Our earnings and call is unchanged while our target price is maintained at $3.68, still based on 1.2x P/BV, the average of its peers.


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Minor International (MINT TB)
High gas costs, but healthy hotel recovery

Cut TP to THB35 on high Europe gas prices

We cut our TP to THB35 from THB42, as we take into account high gas prices in Europe, which should lower FY23E core profit by 34% YoY and FY24E by -24%. About 50% of MINT’s revenue is from European hotels and hence, higher natural gas prices could substantially hurt profitability.

MINT has fixed its Europe natural gas price for FY22 and we thus maintain our FY22 EPS forecast. We estimate European utility costs at around 5.5% of total costs and, if we assume that natural gas prices double to around EUR250-300 per MWh in FY23E, SG&A to sales could rise from 40% to 42% in FY23E, lowering FY23E profit by 34% to THB4.7b, our revised forecast.


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