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CGS CIMB |
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Oil & Gas – Thailand
We downgraded the O&G sector to MARKET WEIGHT. Despite a balance in demand and supply in the crude and refinery segments, we see potential risks for the petrochemical sector due to weak China demand in 2H23 and a substantial increase in new supply. These factors are expected to restrict the improvement in spreads margin. Our top picks include PTT Exploration & Production (PTTEP TB/Target: Bt174.00) and PTT Oil and Retail (OR TB/Target: Bt29.00).
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REIT Singapore: Asia's entertainment destination
■ Coldplay’s and Taylor Swift’s six-show line-ups at the Singapore National Stadium to draw 300,000 attendees each, rivaling the 2022 F1 Grand Prix. ■ Concerts could raise FY24F RevPAR by 1.5-1.9%, translating into FY24F DPU upsides of 0.2%-1.5% for CLAS, CDLHT and FEHT. ■ Positive newsflow of several artists adding and selling out additional shows should create a virtuous cycle for Singapore’s hospitality sector, in our view.
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CGS CIMB |
LIM & TAN |
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GoTo Gojek Tokopedia Fuelling the next momentum
■ GoTo Gojek Tokopedia’s share price has been volatile YTD, with a trading range of Rp90-147 per share. ■ The stake sale by Softbank in Mar 23 and May 23, its MSCI inclusion, and its 1Q23 results contributed to GoTo’s share price volatility, in our view. ■ Reiterate Add. Potential re-rating catalysts include improved macro sentiment and an earlier-than-guided achievement of its profitability targets.
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Singapore Airlines ($7.50, down 4 cents) released its annual report and we highlight the key points below: SIA began the year on a positive note, as Singapore fully opened its borders from 1 April 2022 and significantly relaxed the country’s Covid-19 travel protocols. SIA and Scoot, the two airlines within the Group, responded in a nimble and agile manner. Working closely with key members of Singapore’s aviation ecosystem, both carriers were among the first to launch flights, add frequencies to existing destinations, and resume services to more points, capturing pent-up demand as air travel returned. SIA’s market cap stands at S$22.3 bln and currently trades at 9.4x forward PE and 1.1x PB, with a dividend yield of 5.1%. Consensus target price stands at S$6.58, representing 12.3% downside from current share price. We downgrade SIA to a HOLD following the recent ramp up in share price, following a slew of local and foreign houses who have downgraded SIA to hold. Even though fundamental remains sound and market continues its recovery trajectory, we believe the recent rise in share price have captured most of the recovery. As we expect fare prices to normalize next year as revenge travel slowly subsides, SIA would be hard pressed to maintain it’s FY2022’s performance. |
| LIM & TAN | UOB KAYHIAN |
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We highlight the key points from the FY23 annual report of Valuetronics (S$0.545, unchanged) which was just released this morning, where Chairman and Managing Director Mr Tse Chong Hing commented that “It has been a challenging period for the Group, starting with US-China trade tensions and the imposition of tariffs by the US in 2018 and 2019 that which affected our customers and these tariffs still continue to today, to the disruptions caused by the global COVID-19 pandemic.” At $0.545, market cap of Valuetronics is S$225.5mln, FY23 P/E is 10.7x, current P/B is 1.0x and dividend yield is 4.5%. According to Bloomberg consensus, there is one hold recommendation on the stock while the average target price on Valuetronics is S$0.56, representing a potential upside of 2.8%.
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Delfi (DELFI SP) Expect Robust Growth Momentum For 2023, Backed By Market-Leading Position
Delfi continues to enjoy robust demand across Indonesia and other markets, evidenced by its record-high revenue recorded in 1Q23. This growth momentum is expected to continue for 2023, as seen from the 74% yoy increase in inventory levels. While cocoa prices rally amid the limited supply, Delfi’s stable performance in the previous El Nino event helped by forward contracts and strong pricing power should alleviate concerns over rising costs. Maintain BUY and target price of S$1.71.
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