ANALYSTS SAY: Buy, Sell, Hold (11 Oct)

UOB KAYHIAN

Emperador Inc (EMI SP)
Lifting Spirits Since 1990

EMI is the largest liquor producer in the Philippines and the world’s top brandy producer by volume, with a strong brand portfolio spanning various price points. After its acquisition of Whyte & Mackay in 2014, it has reaped synergies in procurement and operations while benefitting from the world’s booming alcohol market, especially in Asia. EMI has a planned dividend policy of at least 40% payout. Initiate coverage with a
HOLD and a target price of S$0.53, based on 30x 2023F PE.

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Hong Kong Exchanges and Clearing (388 HK)
More Patience Needed For Recovery

HKEX’s sentiment appears weak, but we anticipate multiple positive signs in the near future, including: a) the potential expansion of Stock Connect, b) the launch of renminbi
counters, c) the potential trading of treasury bond futures, and d) listing reform for hard tech companies. Maintain BUY with a reduced target price of HK$405.30 as we made slight tweaks to EPS to incorporate full-year ADT adjustment.

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CGS CIMB

SPH REIT
Tenant sales normalizing

■ Change of FYE from 31 Aug to 31 Dec. FY22 will be a 16M period ending 31 Dec 22. 12M22 DPU of 5.52 Scts (+2.2%) in line at 78.3% of our 16M22F.
■ Tenant sales across portfolio recovered to 89%-99% of pre-COVID levels. Negative portfolio reversions narrowed yoy from -8.4% to -2.8% in 12MFY22.
■ FY22-24F DPU tweaked -0.1%-33.7% due to change in FYE/higher rental growth assumptions. Recovery priced in. Stay Hold, higher S$0.96 DDM TP.

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CSE Global
Awaiting further clarity

■ CSE today proposed a 1-for-5 rights issue at an issue price of S$0.33, c.20% discount to its last transacted price and c.18% discount to TERP of S$0.40.
■ Rationale for the rights issue: 1) to fund the acquisitions of communications businesses in New Zealand and US, and 2) repayment of existing loans.
■ We expect near-term share price weakness due to uncertainty over earnings accretion and poor macroeconomic conditions. Reiterate Hold at S$0.45 TP. 

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Wilmar International (WIL SP)
Leading disclosure

ESG disclosures good, near-term catalysts few. HOLD
Under our enhanced ESG 2.0 review, WIL scores an above average 54. The Group’s disclosure levels are strong and its policies on emissions, human rights, stakeholder engagement etc., are proactive and follow global best practices. Improved disclosures in Scope 3 emissions as well as a higher proportion of diversity and independence at Board level could drive an improved score in our view. In the meantime, weakening palm oil prices, extreme commodity price volatility and prolonged Chinese lockdowns could affect margins and volumes going forward. Maintain HOLD.

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Genting Bhd (GENT MK)
TauRx – post briefing notes

Raising TP by 10sen to MYR5.35; maintain BUY
We attended a briefing held by GENT’s 20% associate, TauRx (Not Listed) after it announced results for its Phase 3 Alzheimer’s disease study, Lucidity (TRx-237-09). The bottom line is HMTM is effective, safe and cheaper than its competitors. TauRx will submit HMTM for US Food & Drug Administration approval in 1Q23. We ascribe USD1.0b valuation to TauRx and raise our GENT SOP-based TP to MYR5.35 from MYR5.25. If TauRx is worth USD15b, GENT will be worth a much higher MYR8.57/shr. 

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