buysellhold july.23



Bumitama Agri Ltd

Rating BUY (as at 27 February 2024)
Last Close SGD 0.635
Fair Value SGD 0.740


Look beyond near term softness
• Despite sequentially weaker Q4 financial and operating metrics, key FY23 figures were the second highest in the company’s history
• Industry remains bullish on mid- to long-term outlook, amidst supply constraints and rapid demand growth
• Final dividend declared, though quantum to be announced; valuation remains undemanding, in our view 


Investment thesis
Bumitama Agri Ltd. (BAL) is a leading upstream producer of crude palm oil (CPO) and palm kernel (PK) in Indonesia. It operates a total planted area of 187k hectares (ha) across Central and West Kalimantan, as well as Riau – areas with good precipitation and temperatures well suited for oil palm cultivation – with an average plantation age of 13.1 years as at 31 Dec 2023. BAL’s superior productivity, high quality
plantations, and continued focus on maximising its current plantations places it in a good position to deliver on above industry average yields and to capitalise on supportive long-term industry fundamentals, where the dynamics of constrained supply and growing demand should provide some resilience to CPO prices.


UOL Group

Stronger balance sheet with capital recycling


■ FY23 EPS of 83.8 Scts was below at 89.8% of our FY23F forecast.

■ It has replenished its residential pipeline with 3 land parcels and continues to unlock value through AEIs.

■ Reiterate Add rating with an unchanged TP of S$8.20. 






Bumitama Agri (BAL SP)

2H23: Results Within Expectations


BAL’s 2H23 results came in within expectations with strong sales volume and CPO production. With the increasing milling capacity, BAL would maintain its high portion of FFB external purchase. Despite higher external FFB, BAL still managed to deliver a good milling margin. We reckon that this was mainly undergirded by its proactive engagement with and support for smallholders. Maintain BUY with a target price of S$0.70 on the back of its strong earnings and good dividend yield of about 5%. 


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Nanofilm Technologies International (NANO SP)

2023: Weak Results On Lower Demand; Maintain SELL Due To Uncertain Outlook


Nanofilm’s 2023 earnings fell 93% yoy as revenue across all BUs saw a yoy decline due to weaker demand. 2023 earnings of S$3m is marginally above our estimate of breaking even. With Nanofilm’s new initiatives still nascent, the outlook for 2024 remains uncertain with macro headwinds. Maintain SELL with a 9% lower target price of S$0.60 as the PE mean multiple of Nanofilm deteriorates. Nanofilm is trading at an unattractive 2024F PE of 22x. 



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Food Empire Holdings (FEH SP)

And now for the cream on top


TP raised to SGD1.68 – Maintain BUY

FEH logged another record FY with core NPAT surging 25.3% to USD56.5m while revenue rose 6.9% to USD425.7m, driven by stronger demand from markets like CIS, SEA and South Asia. Management declared a record SGD0.10/sh dividend, a 250% YoY increase from FY22. Going forward, its non-dairy creamer expansion should add about USD20-50m of revenues in the next 1-2 years after it ramps up while demand from its core markets is likely to remain strong. As a result, we raise our FY24/25 PATMI estimates by 17.3% and 14.5%, resulting in our TP rising to SGD1.68 from SGD1.60, pegged to an 11x FY24 P/E. Maintain BUY

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Thomson Medical Group (TMG SP)

The next healthcare giant


Growing ASEAN footprint; Initiate BUY

Thomson Medical Group (TMG) is one of the largest private providers of healthcare services for women and children in Singapore. It also has a strategic presence in Malaysia and, more recently, expanded to Vietnam via the acquisition of FV Hospital in Jul 2023. We initiate with a BUY and 12-month TP of SGD0.08, pegged at 23x FY25E EV/EBITDA, representing about -0.5 standard deviation below its historical mean. While trading at a premium to peers, we think this is justifiable given its strong portfolio of healthcare assets in the region which offers high growth potential.



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