PHILLIP SECURITIES

City Developments Limited
Hospitality lifts overall profitability

SINGAPORE | REAL ESTATE | RESULT
 Copen Grand Executive Condominium (EC) fully sold within a month of launch. The recent launch of its 639-unit EC was well received. We estimate the Group achieved a comfortable
~25% profit margin on the project.

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SATS LTD
Further funding clarity to reduce overhang

SINGAPORE | TRANSPORT SERVICES | UPDATE
 SATS has provided more clarity on its funding structure for the Worldwide Flight Services (WFS) acquisition. We believe the added clarity will further reduce the overhang on the stock. 

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UOB KAYHIAN 

Marco Polo Marine (MPM SP)
Reeling In Revenue With Higher Shipping Rates And Expansion Efforts

MPM’s business has stayed resilient amid the uncertain macro environment, due to better-than-expected fleet charter and utilisation rates, as well as its acquisitions during the year. Vessel utilisation has been improving, helped by minimal newbuilds and increased demand in Asia. Together with its strong balance sheet and expansion efforts in the offshore windfarm sector, MPM will likely reap greater benefits in the long term. Downgrade to HOLD with target price slightly raised to S$0.048.

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SECTOR UPDATE
Technology – Malaysia

The Stars Are Aligning; Capitalising Windows Before Cyclical Upturn Again
Conditions for sector risk-on are falling in place after the materialisation of de-rating events alongside appealing valuations. Meanwhile, our empirical study on the sector cyclicality against the BM Tech Index also suggests that the sector upswing could be on the cards. While earnings vulnerability is still looming, not all segments are gloom and doom. We prefer companies that are still benefitting from structural growth themes. Upgrade to OVERWEIGHT. 

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Star Petroleum Refining (SPRC TB)
Positive On Investment In Oil Station Business

SPRC announced plans to acquire the retail oil station business and 9.91% of the Thai petroleum pipeline yesterday (6 December). We positive on this deal with expect no need for a cash call for this deal. We also expect SPRC to post impressive earnings outlook in 4Q22. Maintain BUY. Target price: Bt15.00.

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SECTOR UPDATE
Plantation – Regional

Palm Oil Sector Facing Multiple Headwinds
The arrival of foreign workers in Malaysia helps in crop recovery but is still far from solving the problem. Beside worker shortage, the Malaysia palm oil industry is also heavily taxed, with about 31% of profit paid to the government in the form of cess, taxes and levies. Government policies on palm oil trade need to take into account the price factor, producers’ margin and distribution network. Maintain MARKET WEIGHT.

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