buy sell hold 2021




Valuations in-line with industry, public equity need time to digest

■ SATS announced acquisition of Worldwide Flight Services (WFS) at an EV of S$3.11bn and equity of S$1.74bn, indicating EV/EBITDA and P/E 9.7x/45.1x.

■ EV/EBITDA valuation in line with industry median of c.11x over the past decade. Post de-leveraging, P/E could be more palatable at 16.9x.

■ Worst case of S$1.7bn in EFR suggests TERP of S$3.49 at c.10% downside.

■ On a longer-term basis, if executed well, this could be a pivotal point for SATS to transform into a global leader. Maintain Add and TP of S$4.47.


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Mynews Holdings Berhad
Remains in the red due to rising costs

■ We deem the 9MFY10/22 core net loss of RM16.5m as better than our expectations and Bloomberg consensus FY10/22 estimate.

■ The earnings outperformance was mainly due to higher-than-expected revenue and larger-than-expected GP margin on a better product mix.

■ Maintain Reduce with an unchanged TP of RM0.33 (1.0x P/NTA). However, we retain our EPS forecasts pending the results briefing on 28 Sep 2022.


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Still approaching cruising altitude

Maintain BUY with a lower TP of MYR0.84 (-35%)

Higher fares and lower lease rates have more than compensated for the weaker MYR and still high oil prices. We now forecast CAPITALA’s return to profitability to be delayed by a year to FY24E only due to slower-thanexpected redeployment of aircraft.

Although we cut our SOP-based TP to MYR0.84 from MYR1.29, CAPITALA still offers >30% upside potential. On another note, CAPITALA assured us that there will not be another rights and/or debts will not be converted into new shares. 


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Advanced Info Service (ADVANC TB)
Weak 3Q22E but still expect strong growth in FY23E

Costs rose faster than revenue hence poor 3Q likely

We estimate 3Q22 core net profit of THB6.3b (-6.7% YoY and -1.8% QoQ) as we expect expenses rose faster than core service revenue. We expect weak mobile revenue growth (+0.4% QoQ) due to fewer outbound tourists and weak consumer purchasing power. Nevertheless, ADVANC’s performance could improve once inflation rates begin to decelerate.

Reiterate BUY and THB250 TP (7.5% WACC, 2.0% LTG) on the back of 23% core EPS growth in FY23E.


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WFS Acquisition: Buying A Strategic Fit In Uncertain Times

SATS has proposed to acquire 100% of WFS for a cash consideration of €1.19b (S$1.64b). While we acknowledge that WFS is a good strategic fit for SATS, we are cautious about the impacts that a possible global recession may have on air cargo businesses.

In addition, the weak equity market sentiment amid the rising interest rate environment may not be in favour of SATS’ equity raising plan. Downgrade to HOLD, with a lower target price of S$3.82.


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E-payment – Malaysia
BNPL To Be Regulated

BNPL players might be regulated under the CCA by end-23. This would indirectly impact the sector, given e-payment companies partner with BNPL players to provide customers with BNPL payment options.

We view this regulation as neutral as consumers will have other avenues of payment options, but we expect some consolidation among BNPL players. Downgrade to MARKET WEIGHT on the back of potential downside risk from weaker consumer sentiment.


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