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Thai Beverage (THBEV SP)
FY22: Strong Performance As Economic Activity Ramps Up
THBEV reported strong FY22 PATMI of Bt30.1b (+22.2% yoy), benefitting from the relaxation of domestic COVID-19 restrictions. The beer, food and NAB segments contributed to the strong bottom line growth, while the spirits segment was dragged by lower margins and flat volumes. In FY23, several ASP hikes would help mitigate the impact of rising raw material and packaging costs. THVBEV is trading at an attractive - 1.5SD to its mean PE. Maintain BUY with a lower SOTP-based target price of S$0.73.
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Far East Hospitality Trust (FEHT SP)
Variable Rent Kicks In As Room Rate Rises
FEHT is a pure play on the recovery of room rates in Singapore. RevPAR for hotels increased 37% qoq to S$104 in 3Q22. As RevPAR recovery sustains into 2023 and 2024, we expect variable rents to normalise to a respective 23% and 28% of its hotels’ master lease rental income. Its low aggregate leverage of 33.5% enables FEHT to weather an extended period of high interest rates. Valuation is attractive with FEHT trading at 2023 distribution yield of 5.9% P/NAV of 0.73x. Maintain BUY. Target price: S$0.71.
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Meituan (3690 HK)
3Q22: Core Profit Exceeds Expectations; Soft Outlook For 4Q22
Meituan’s 3Q22 earnings exceeded expectations. Total revenue grew 28% yoy to Rmb62.6b, in line with our and consensus estimates. Core local commerce profit beat expectations with adjusted EBIT rising 123% yoy to Rmb9.3b, vs consensus estimates of Rmb8b, driven by strong food delivery and in-store profitability that resulted in operating margin improving to 20.1%. Non-IFRS net profit was Rmb3.5b, vs a loss of Rmb5.5b in 3Q21, which translated to a non-GAAP net profit margin of 5.6%. Maintain BUY with a lower target price of HK$200.00.
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CH Karnchang (CK TB)
A Turnaround In 2023 From A Record-high Backlog
CK expects to turn around from 2023 onwards with the main emphasis on three projects to be signed with its associates, which will result in it seeing the strongest backlog improvement among peers despite having no other public projects to be put up for bidding in the next few months. Furthermore, the company will benefit from improvements from its associates. Maintain BUY. Target price: Bt29.50.
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Sembcorp Industries (SCI SP)
Adding 2.27GW of renewables
Reaching 9.4GW gross renewables capacity
SCI acquired 1.7GW (2 sites) and 583MW of renewable assets in China and India, respectively. With the three acquisitions, Sembcorp’s total gross renewable capacity increases to 9.4GW, including work-in-progress assets, very close to its 10GW target by 2025. These acquisitions will be accretive to earnings upon completion by 1H23 and will be funded by external debt and internal cash. We estimate they will add 5-6% to FY24E EPS. We retain our earnings forecasts for now as we await FY22 results. Reiterate BUY with an unchanged SOTP-based TP of SGD4.00, leaving 24% upside.
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Al-Salam REIT (SALAM MK)
3Q22 missed estimates
Upgrade HOLD; +8% total return
3Q22 results - despite QoQ improvement - and 2nd interim gross DPU of 0.5sen (YTD: 1.0sen) missed our estimates, mainly attributed to slowerthan-expected recovery at Komtar JBCC. We lower our FY22-24E earnings by -11%/-14%/-14% and nudge down our DDM-TP by 5sen to MYR0.35 (unchanged cost of equity of 9.9%). Upgrade to HOLD, with total return of +8% which includes FY22E net yield of 6.4%.
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