buysellhold july.23



1Q24F results likely in line with our expectation


■ JD hosted a 1Q24 results preview call on 16 Apr 2024.

■ We expect JD to post total revenue of Rmb272bn (+12.0% yoy) and largely flattish non-GAAP net profit of Rmb7,413m for 1Q24F, in line with our expectation.

■ We forecast non-GAAP NPM of 2.7% for 1Q24F (-0.4% pt yoy) due to sponsorship to CCTV’s Spring Festival Gala, and rise in salary and subsidies.

■ We expect JD’s “everyday low price” strategy and continual improvement in its 3P ecosystem to continue lifting its topline growth and market share in FY24F.

■ We maintain our FY24-26F EPS forecasts and reiterate our Add call, with an unchanged DCF-based TP of HK$276 (WACC: 13.4%, TG: 3%, Beta: 1.2). 



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Singapore Airlines (SIA SP)

Mar 24: Pax Data Slightly Better Than Expected, But Cargo Misses


SIA’s Mar 24 pax data came in slightly better our expectation, but cargo missed. Overall, earnings impacts from the beat in pax data and the miss in cargo data would largely offset each other by our estimate. We have maintained our 4QFY24 core earnings estimate at S$553m, but shifted a S$1.11b disposal gain related to the Air India-Vistara deal to FY25. Maintain HOLD and target price of S$6.31.



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Property – Hong Kong

Expect Modest Pull-back Of Primary Sales In 2Q24


CCL Index fell after increasing for three consecutive weeks while CVI Index rose over 60, reflecting a change in banks' attitude towards granting mortgages from lukewarm to optimistic. CRI rose again by 0.55% mom. With expectation of fewer interest cuts, we foresee primary sales pulling back in 2Q24. However, we maintain our forecast of property prices (-2%) and maintain MARKET WEIGHT on the sector. We prefer retail landlords over developers. Top pick: Wharf REIC.



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Delfi’s (S$0.91, down 0.5 cents) FY23 results were in line with our expectations with revenue and net profit coming in at 103%/99% of our forecast.

Revenue rose 12.7% yoy to US$538.2mln, benefiting from strong demand in both Own Brands and Agency Brands, and across Indonesia and Regional Markets. The sales are record numbers in Delfi’s history, post-divestment of its cocoa-processing business in 2013. Lower gross margins of 28.5% (-2.0 pp) were attributed to higher promotional spending as a result of increased competition and strategic investments in core brands. Overall, net profit came in at US$46.3mln (+5.4% yoy). 

At S$0.91, Delfi is capitalized at S$556.2mln and trades at 1.5x P/B and P/E of 8.8x. Full-year dividends have remained stable at 5.75 S cts, representing a dividend yield of 6.4%. Key markets of Indonesia, Philippines and Malaysia are forecasted to achieve GDP growth of between 4.0% - 7.0%. Cocoa prices have tripled from a year ago and could further affect Delfi’s margins in FY24, although Delfi has significantly hedged raw material prices for 2024. We project flattish profits for FY24F as Delfi’s track record of premium products growth and proactive price adjustments limit any significant margin compression. Maintain Accumulate with a lower target price of S$1.30 (previous TP: S$1.58), as we roll forward valuations to 12.6x FY24F P/E (10% discount to 5-year average P/E).


Marco Polo Marine / MPM ($0.068, unchanged) announced that its maiden Commissioning Service Operations Vessel (CSOV), currently under construction at Marco Polo Shipyard in Batam, Indonesia, is scheduled for delivery in September, and will be deployed in Taiwan for a Vestas project in early October 2024. 

MPM’s market cap stands at S$255.2mln and trades at 7x forward PE and 1.3x PB, with a dividend yield of 1.5%. We continue to like MPM for it’s robust shipbuilding segment, alongside continued growth in ship chartering amidst a net cash position.

MPM’s ability to secure financing which we understand to be under 4% in this high interest rate environment is a game-changer as it would allow them to accelerate their CSOV build program to leapfrog potential competitors, allowing the company to keep their industry leading position ahead of competitors.

In addition, wind power is amongst one of the most competitive renewable energy segment of the market in Taiwan, thereby helping keep business momentum robust for them going forward. Bloomberg 1-year consensus target price of 8.5 cents implies a potential upside of 25% from current level. As such, we continue to maintain an “Accumulate” rating on MPM.



Marco Polo Marine (MPM SP)

Landmark financing


secured Maintain BUY with TP of SGD0.088 MPM said its subsidiary, PKR Offshore, secured financing from Bank Sinopac for its first commissioning service operation vessel (CSOV) MP WindArcher – due to be operational by Oct 2024. This is the first financing secured by MPM for a new vessel since its restructuring and demonstrates access to bank financing which frees up cash flow and enables faster expansion. The same subsidiary earlier signed an Asia Pacific crew transfer vessel (CTV) pact with Siemens Gamesa to provide CTVs to support offshore wind projects in Taiwan and Korea from 2024-26 with an option to extend to 2030. We believe MPM’s outlook is bright and maintain BUY our SGD0.088 TP at just 8.5x FY24E P/E. Downside risks include a slowdown that leads to a drop in charter rates and demand for vessels



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