buy sell hold 2021




SATS Ltd – Breakeven in sight and funding clarity to drive re-rating
Recommendation: ACCUMULATE (INITIATION), Last Done: S$2.69
Target price: S$3.02, Analyst: Terence Chua

  • Funding clarity to reduce overhang on the Company. SATS has provided clarity on its funding structure for the Worldwide Flight Services (WFS) acquisition by committing to a cap of S$800mn on the rights issue. We modeled a 3 for 10 rights issue scenario at an issue price of S$2.29 (~15% discount to last close) to arrive at a TERP of S$2.60.

  • SATS profitability is at a key inflection point with breakeven in 2HFY23. We expect the Group to turn profitable by FY24e with the resumption of dividend in the same year.

Initiate with ACCUMULATE and a target price of S$3.02. Our valuation is pegged to 18.5x FY24e, which is -1sd below its historical average. Risks to our view include 1) integration challenges for WFS and 2) revenue growth continuing to lag behind expenses growth.

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Sustaining Y-o-y Growth; Maintain BUY


■ ComfortDelGro (SGX:C52)'s 3Q22 business update confirmed our assessment that it will continue to report y-o-y earnings growth. However, inflationary pressures from higher fuel and wage costs and a mismatch in the timing of cost increases vs being compensated for cost inflation translated into margin compression that quarter.

■ ComfortDelGro should book y-o-y earnings growth in 2023, thanks to an improving taxi segment and higher rail ridership. Valuation is compelling after the recent corrrection of ComfortDelGro's Share Price.

Valuation Is Compelling.

  • ComfortDelGro's Share Price has dropped by 17% in last three months and the stock's forward P/E is now well below its 10-year average, making the valuation quite compelling. Our target price includes a 12% ESG premium over the DCF-derived S$1.60 fair value.
  •  Maintain BUY recommendation on ComfortDelGro with S$1.80 target price, 46% upside with a -4% FY22F yield.



Nanofilm Technologies International
Expect a challenging 4Q22 due to disrupted production; downgrade to SELL.

(NANO SP / SELL / S$1.27 / Target: S$1.02)

We expect Nanofilm to report a weak 4Q22, with 2H22 earnings to decline by 30% yoy, due to Foxconn’s production in Zhengzhou, China being disrupted. The city is still subject to tight restrictions even though the seven-day lockdown was lifted on 9 Nov 22.

The ongoing restrictions have led to Customer Z reducing its shipment forecasts for premium phones. We cut 2022 and 2023 EPS by 19% and 17% respectively. Downgrade to SELL with a 43% lower target price of S$1.02…


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Thai Beverage
Cheers to reopening

• Reinstate coverage on one of the most valuable
large-cap ASEAN F&B counters, with BUY, TP: S$0.84
(36% upside)
• Expect upcoming FY22F to post 9% y-o-y growth;
momentum expected to continue into FY23F, despite
macro uncertainties
• No issues on refinancing without BeerCo IPO or
rising interest rate; net gearing to taper to 0.5x by
• Valuation attractive at 14.0x FY23F PE, at c.-1.0SD of
its 5-year average


Share Prices

Counter NameLastChange
AEM Holdings3.430-0.010
Avi-Tech Electronics0.265-0.010
Best World2.5300.010
Broadway Ind0.1080.001
China Sunsine0.465-
Food Empire0.735-
Fortress Minerals0.4000.025
Geo Energy Res0.320-
Golden Energy0.810-0.010
GSS Energy0.047-
ISDN Holdings0.6050.020
IX Biopharma0.120-0.002
Jiutian Chemical0.081-
KSH Holdings0.340-
Leader Env0.0720.010
Medtecs Intl0.148-
Meta Health0.021-0.001
Nordic Group0.470-
Oxley Holdings0.143-0.002
REX International0.2150.005
Sinostar PEC0.180-
Southern Alliance Mining0.610-0.015
Straco Corp.0.5000.020
Sunpower Group0.3950.020
The Trendlines0.098-
Totm Technologies0.1030.001
UG Healthcare0.176-0.003
Uni-Asia Group0.9050.005
Wilmar Intl3.960-0.070
Yangzijiang Shipbldg1.3000.010

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