buysellhold july.23




Searching For Golden Needles In The Haystack


While we forecast a modest 2.4% EPS growth for 2024, we nevertheless see a number of stocks within our universe that should deliver strong returns, backed by sustainable dividend yields. On a top-down basis, our 2024 year-end target of 3,290 for the STI implies 6% upside from current levels, with the index’s current valuation looking inexpensive at 2024F PE and P/B of 9.9x and 1.0x respectively. Our top large-cap picks are CLI, CD, FR, GENS, MINT, OCBC, SATS, STM, SCI and VMS.



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Venture Corp (S$13.11, up 9 cents): The World Semiconductor Trade Statistics (WSTS) has recently published its latest forecast for the semiconductor market. Exceeding the spring projections with slightly better Q2 and Q3 results, WSTS has revised its forecast, anticipating a single-digit contraction in the global semiconductor market of 9.4 percent in 2023. However, this is anticipated to be followed by a robust recovery, with an estimated growth of 13.1 percent in 2024.

At S$13.11, market cap for Venture Corp is S$3826mln, FY22 P/E is 10.4x, current P/B is 1.4x, dividend yield is 5.7% and its present net cash position of S$956.5mln equates to around 25% of current market cap. Given the expected upturn in the overall semiconductor industry which is slated to take place next year, we thus recommend “Accumulate” on Venture Corp in anticipation of its earnings recovery in FY24 while its strong balance sheet and high dividend yield are also positive attributes.





Centurion (S$0.395, down 0.5 cents) has entered into sale and leaseback agreements with KUMPULAN WANG PERSARAAN (DIPERBADANKAN) [KWAP], Malaysia’s public sector pension fund, for two (2) of the Group’s Malaysia assets, Westlite Bukit Minyak and Westlite Tampoi (”Properties”).

Capitalized at S$332mln, Centurion is trading at attractive valuations of just 5.1x core FY23F P/E and 0.46x P/B with a dividend yield of 5.1%. The shift towards an asset-light model will provide Centurion with more opportunities to add to its healthy pipeline of new beds, reduce debt and improve its financial position in the long run. The collaboration with Malaysia’s public sector pension fund further validates the track record and quality of Centurion’s assets in Malaysia. Consensus target price stands at S$0.57, representing a potential 44% upside.



Malaysia Strategy

Solid 3Q23 results season


■ Declines in average selling prices caused significant distortions to the Plantations, Petrochemicals and Gloves sectors during 9M23.

■ Nevertheless, revenue and earnings momentum improved in 3Q23; 9M23 normalised profits were flat albeit up 20% after adjusting for ASP distortions.

■ We remain constructive on equities and retain an aggressive YE 2024 KLCI target of 1,755. Improved earnings delivery is a potential third catalyst.



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Insurance - Composite

Resilience in MCV insurance demand


■ MCV insurance demand is more resilient than expected, with 3Q23 average case sizes of MCV regular premium policies down 3% qoq.

■ Broker channel remained the main driver of 3Q23 HK premium growth, with increasing adverse impact on insurers’ new business value (NBV) margins.

■ 3Q23 MCV mix for high NBV margin H&P insurance products has almost returned to 3Q19’s level. Reiterate sector Overweight.



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Malaysia Strategy

Nov 2023: Equity Fund Flows


Sizeable MYR1.55b foreign inflow After a substantial outflow of MYR2.18b in Oct 2023, foreign investors turned more positive on MY equities in November as they bought MYR1.55b, their largest monthly net buy for the year (Fig.3). Net buying was observed in 17 out of 21 trading days. This narrowed their net sell for 11M 2023 to MYR2.6b (Fig.4). Market foreign holding was 19.6% end-Nov 2023 (-1ppt YTD), a multi-year low (Fig.10).



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AEM Holdings2.650-0.080
Avi-Tech Electronics0.265-
Best World1.700-0.120
Broadway Ind0.087-0.002
China Sunsine0.385-
Delfi Limited0.955-0.075
Food Empire1.430-0.020
Fortress Minerals0.2700.005
Geo Energy Res0.335-0.055
GSS Energy0.027-0.002
Hong Leong Finance2.480-0.010
Hongkong Land (USD)3.2800.020
ISDN Holdings0.330-0.010
IX Biopharma0.041-
Jiutian Chemical0.025-
KSH Holdings0.250-
Leader Env0.052-
Medtecs Intl0.133-0.001
Nordic Group0.340-0.010
Oxley Holdings0.0910.001
REX International0.1230.002
Sinostar PEC0.1420.004
Southern Alliance Mining0.600-
Straco Corp.0.515-
Sunpower Group0.2250.005
The Trendlines0.083-0.001
Totm Technologies0.024-0.001
Uni-Asia Group0.8500.010
Wilmar Intl3.340-0.020
Yangzijiang Shipbldg1.7400.070

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