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UOB KAYHIAN |
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CDL Hospitality Trusts (CDREIT SP) Singapore And Europe Leading The Recovery
CDREIT’s six Singapore hotels will benefit from higher occupancies and increased contributions from GCWH during the seasonally stronger 2H23. Visitor arrivals have picked up since July as Singapore becomes a preferred destination for well-heeled Chinese tourists. CDREIT will benefit from the continued recovery in Germany and Italy. Residential Build-to-Rent project The Casting in the UK will start contributing in 2H24. Maintain BUY for 2024 distribution yield of 5.8%. Target price: S$1.48.
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Commodities – China Weekly: Signs Of Economic Stabilisation From Improving CPI/Credit Data
Metal prices have been boosted by China’s Aug 23 CPI figures which have returned to positive territory, paring some of the losses last week given the strength of the US dollar. Iron ore prices corrected last week as Chinese authorities stepped up intervention and warned futures brokers not to hype up iron ore prices. Steel production activities expand further as steel mills anticipate consumption to pick up further. Cement shipments continue to recover as weather conditions improve, but rising coal prices are eroding margins.
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LIM & TAN |
MAYBANK KIM ENG |
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Olam Group Limited ($1.17, down 0.11) refers to two articles (the “Articles”) recently published in Nigeria by www.dailynigerian.com and separately by www.primebusiness.africa concerning the activities of Olam Nigeria and its subsidiaries (“Olam Nigeria”). By way of background, the Olam Group has its origins in Nigeria. Over the course of the last 34 years, the Olam Group has grown its presence to 67 countries and become a successful global food and agribusiness, with annual revenues of US$40.77billion in FY2022. Olam’s major shareholders consist of Temasek (51.34%), Mitsubitshi Corp (14.51%) and founders Kewalram Singapore (6.8%). At $1.17, Olam is capitalized at $4.47 billion and trades at 21x historical PE, 0.68x price to book and 6.4% dividend yield. There is no active analyst coverage based on Bloomberg data and we note that the company has been buying back shares recently, having bought back 14.25 million shares so far out of their allowable maximum buy back of 191.9 million shares. We would prefer to await the results and findings from Olam’s audit committee’s (assisted by external counsel and external auditors) review of the matter given that its PE of 21x is not low while the allegations are serious and needs to be properly addressed.
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Regional Plantations Stockpile jumped on weak exports
Production hit 10-month high August stockpile of 2.12mt hit a 7-month high on seasonal output recovery and weak exports. We maintain our 2023 CPO ASP forecast of MYR3,700/t as CPO price needs to stay competitive in the short term to help stimulate demand amid anticipated strong output recovery in 2H23. We maintain our NEUTRAL call on the sector. Preferred BUYs are FR, BAL, SOP, & TAH.
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DBS RESEARCH |
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Venture Corp Depressed valuation offers favourable entry point
We upgrade Venture to BUY from Hold, premised on :-
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