buysellhold july.23



YTL Power International

Time to take a breather


■ Power Seraya net profit started to normalise in 3QFY6/24 but losses at Wessex are narrowing. Telco segment suffered from lower project revenues.

■ We lift our SOP-based TP to RM5.50 and downgrade the stock to a Hold. Investors have, in our view, baked in sizeable value for its DCs.

■ While DC construction works are seeing good progress, take-up rate needs to gather pace and details forthcoming to justify further re-rating, in our view



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Seatrium Ltd

Navigating a big ship


■ We expect STM to report an order book of about S$15bn as of 1Q24F as it reports its business update on 28 May (no earnings to be reported).

■ We build in a base case of S$12bn of order wins for 2024F, assuming STM wins both P-84 and P-85 FPSOs.

■ We include the recent settlement of MH Wirth arbitration and higher SG&A which resulted in FY24F reported losses of S$30m (core profit: S$64m).

■ Reiterate Add with a lower TP of S$2.62. We still like STM as the only largecap proxy in ASEAN to benefit from global offshore & marine capex cycle.



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Marco Polo Marine (MPM SP)

1HFY24: Earnings In Line, Charting A Path To Growth


MPM registered 10% yoy and 31% yoy growth in 1HFY24 revenue and core PATMI respectively, both making up roughly 40% of our full-year estimates. This is in line with our expectations, given the monsoon season. Gross profit margin expanded by 5ppt yoy, driven by 17% yoy higher average charter rates for OSVs. MPM continues to benefit from strong demand from the Taiwan offshore wind and O&G markets. Maintain BUY with an unchanged PE-based target price of S$0.086. 



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Malayan Banking (MAY MK)

1Q24: Balanced Risk-to-reward


Maybank’s 1Q24 net profit was in line, underpinned by strong loans and non-interest income growth. However, loans growth is expected to moderate in subsequent quarters while full-year NIM is still expected to compress by 3-5bp. Maintain HOLD and target price of RM9.55 (1.08x FY24 P/B, 10.0% ROE). The group is trading at its 10-year historical mean P/B valuations which we deem fair as ROE output is broadly in line with the historical mean.



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Seatrium ($1.54, down 4 cents) announced that it has won an internaƟ onal tender from Brazil’s NaƟ onal Oil Company, Petróleo Brasileiro S.A. (Petrobras), acƟ ng as operator of Atapu and Sepia consorƟ ums, for the newbuild supply of FloaƟ ng ProducƟ on Storage and Offl oading vessels (FPSO) plaƞ orms P-84 and P-85. With the contracts valued at approximately S$11 billion, these high throughput FPSOs will be deployed in the Atapu and Sépia fi elds, located in the eastern part of the Santos Basin, approximately 200 kilometres off shore of Rio de Janeiro in Brazil.

Seatrium’s market cap stands at S$5.3bln and trades at 0.9x PB. It is currently loss making and does not pay dividends. Consensus target price stands at S$2.80, represenƟ ng 81.8% upside potenƟ al. Although Seatrium has won numerous contracts, the contribƟ ons from the completed contracts will only show much later and would also depend on Seatrium’s successful delivery/execuƟ on of contracts. BoƩ om-line is expected to be a profi t of $200m in FY24 (26.5x FY24 PE) and we see Seatrium being posiƟ oned as a turnaround play by the market. Maintain “Accumulate”.



Singapore Telecommunications Ltd

Down Under is turning around


 4Q24 revenue was within expectations, with FY24 revenue at 97% of our forecast. EBITDA exceeded 105% of forecasts due to higher other income and Optus margins. The final dividend was raised by 13% to 6 cents and an inaugural “value realisation dividend” (or recurrent special) of 3.8 cents. 



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