| UOB KAYHIAN |
UOB KAYHIAN |
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ComfortDelGro Corporation (CD SP) Taxi Segment To Be Largest Profit Contributor With New Platform Fee
CD has implemented a new platform fee that would boost taxi earnings from 3Q23 onwards, given the increasing reliance on ride-hailing applications. We opine that CD is fairly valued at current price levels, despite improving fundamentals, a decent dividend yield and a strong balance sheet. Maintain HOLD. Target price: S$1.27.
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Coal – Indonesia Potential 40% Drop In 2023 NPAT; Share Prices Might Have Reflected Fundamentals
We believe coal share prices could have reflected the potential 41% decline in 2023 net income. Share prices of ADRO and ITMG have declined by 42.1% and 38.8% ytd respectively, and these should mirror the potential 41% decline in 2023 net income of both companies. The 41% decline equates to a 25% drop in ASP in 2023. For every 10% decline in coal price, 2023 NPAT of coal companies could decline by 15-17%. Upgrade the coal sector to MARKET WEIGHT, and upgrade ADRO and ITMG to HOLD.
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LIM & TAN |
LIM & TAN |
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Yangzijiang Shipbuilding ($1.28, down 4 cents), a world-leading shipbuilding group based in China, and a Straits Times Index component company listed on the SGX Main Board, has been awarded a contract from Norwaybased Klaveness Combination Carriers ASA (“KCC”) for the construction of three (3) 83,300DWT third generation CABU (“CABU III”) vessels, due for deliveries in 2026. Although YZJ SB has declined 11.7% from its high of S$1.45, the O&G sector has continued to do well with YZJ SB having order visibility till 2025 which provides income visibility till then. Yards are currently full and forward earnings is expected to be driven by both revenue and margin expansion as order book mainly consists of containership orders that boasts higher value/margins. We also like that YZJ SB has been awarded repeat orders, which shows that their customers are satisfied. As such, we continue to recommend a BUY recommendation on YZJ SB.
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ST Engineering ($3.61, unchanged): Honeywell recently announced a Memorandum of Understanding (MOU) with ST Engineering to explore opportunities around retrofit, modification, and upgrade (RMU) programs for fixed wing and rotary wing platforms. This MOU strengthens the relationship between Honeywell and ST Engineering, by establishing a basis of cooperation to explore the feasibility of RMU programs. Overall, we continue to like ST Engineering due to its:- (i) expected earnings growth forecasted for FY23 and FY24 where contributions from Transcore would start becoming more significant; (ii) attractive and sustainable dividends; and (iii) robust order book. For FY23F and FY24F, we are anticipating its net profit to come in at S$579.5mln (+8.3% yoy) and S$677.6mln (+16.9% yoy) respectively. Recommend ACCUMULATE. |
| CGS CIMB | CGS CIMB |
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HRnetGroup Limited Keeping a watchful eye on weak macro
■ We see downside risks to our permanent placement volume assumptions given weak SG macro conditions and a challenging labour market in China. ■ Latest commentary from staffing peers (Fig 1) indicates a weaker outlook for permanent placement volumes while flexible volumes should remain resilient. ■ Downgrade to Hold with a lower TP of S$0.80. We expect more cuts to Bloomberg consensus estimates in the coming months.
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Tenaga Nasional Tariff announcement a relief for consumers
■ The government has maintained electricity tariffs for 99% of domestic users, while the balance 1% of high-volume users will be subjected to higher tariffs. ■ Non-domestic users will enjoy a reduction in surcharge rates. ■ We expect neutral impact on Tenaga’s earnings, but lower receivables should reduce cashflow strains from demanding working capital requirements. ■ The stock remains a top pick. Maintain Add with a TP of RM12.00.
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