ANALYSTS SAY: Buy, Sell, Hold (18 Oct)

UOB KAYHIAN 

REITs – Singapore
S-REITs Bi-Weekly Updates (1-14 Oct 22)

S-REITs are under pressure due to elevated inflation and rising government bond yields. The latest US CPI reading of 8.2% for Sep 22 adds to the pessimism. The nasty correction has brought valuations to attractive levels, and bargains have emerged. Our bottom-up and diversified BUY picks for blue chips are CLAS (Target: S$1.27), FCT (Target: S$2.56), LREIT (Target: S$0.91), MINT (Target: S$3.12) and MLT (Target: S$1.94). Maintain OVERWEIGHT.

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Petronas Dagangan (PETD MK)
Embracing Moderating Volume Growth And Subsidy Receivables

PETD may see volume growth moderating from the strong 2Q22 performance, a period which reflected the country’s full reopening, towards an environment of lower global GDP growth and inflationary pressures. Having said that, its working capital stress is largely shielded due to strong parental support and the government’s plans to have a lower subsidy bill yoy in 2023, which is expected to include the targeted petrol subsidy rollout. Retain HOLD, and target price of RM20.50. 

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CGS CIMB

AEM Holdings Ltd
FY22F revenue guidance raised

■ AEM has raised its FY22F revenue guidance upwards to S$820m-850m from S$750m-800m previously.
■ Reflecting this new revenue guidance, we raise our FY22F revenue forecast by 6.3%, leading to an 8.2% increase in our FY22F EPS forecast.
■ Reiterate Add on AEM given its positive long-term prospects.

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Capitaland Investment
Biding its time

■ Maintaining fiscal discipline and exercising patience in capital deployment.
■ Lodging management business to benefit from strong travel recovery.
■ Reiterate Add rating with an unchanged TP of S$4.59. 

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Property Devt & Invt
Good take-up of new launches boosts sales

■ Sep home sales boosted by two new launches.
■ We anticipate a quieter market post the Sep cooling measures.
■ We stay sector Overweight due to inexpensive valuations. Our sector top picks: CIT, CLI and UOL.

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Tech Manufacturing Services
Operating environment has worsened

■ Adding to concerns that the semicon industry is in for a downturn in 2023F, the US had slapped additional restrictions on semicon exports to China.
■ In this note, we have reduced our TP for Venture Corp and lowered our FY23-24F EPS forecasts by 4.2-7.0%.
■ We have also cut our TP for Frencken and reduced our FY23-24F EPS forecasts by 2.4-4.3% in this note. 

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