buysellhold july.23

Tambun Indah Land (TILB MK) Beat expectations Profit and sales above expectations TILB’s 1Q24 net profit of MYR15m (+38% YoY, +33% QoQ) and 1Q24 lockedin sales of MYR88m were above expectations. TILB will very likely exceed its internal sales target of MYR150m for FY24 (-39% YoY). We raise our earnings forecasts by 17-21% to factor in a higher sales assumption for FY24E (+80%). Our TP is raised to MYR1.24 (+29sen) on a higher 0.6x rolled forward FY25E P/B. U/G to BUY, backed by FY24E div yield of 5.4%.

UOB KAYHIAN

UOB KAYHIAN

Seatrium (STM SP)

Wind In Its Sails

 

STM provided a 1Q24 business update that was qualitative in nature and continues to strongly underline its exposure to large-scale offshore projects globally. These include both production of oil & gas as well as offshore wind power. In addition, its repairs & upgrades segment continues to do well, notably signing a number of long-term favoured-customer contracts with blue-chip clients. Maintain BUY. Target price: S$3.23.

 

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CelcomDigi (CDB MK)

1Q24: In Line; Earnings Driven By Gross Synergy Savings

 

CelcomDigi’s 1Q24 net profit rose 18% yoy but fell 14% qoq to RM377m. This included a RM140m VSS cost booked in the quarter. Stripping this out, 1Q24 core net profit came in at RM487m (-5% yoy; -3% qoq), in line with expectations. The group estimates 2024 gross synergy of RM700m, partly offset by network integration cost. Maintain HOLD with a DCF-based target price of RM4.50. The stock trades at 9x EV/EBITDA, -1SD below its five-year mean, and offers a 4% dividend yield.

 

 

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MAYBANK KIM ENG

MAYBANK KIM ENG 

CelcomDigi (CDB MK)

Second year of integration

 

Sequentially lower earnings 1Q24 results were in line with our expectation, but possibly below consensus. CelcomDigi’s investment thesis revolves mainly around realising merger synergies - which are significant (MYR8b NPV over 5 years) but back-loaded. Maintain HOLD with an unchanged DCF-based TP of MYR4.50. We prefer Axiata (AXIATA MK, BUY, CP: MYR2.84, TP: MYR3.50) in the telco space.

 

 

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Tambun Indah Land (TILB MK)

Beat expectations

 

Profit and sales above expectations TILB’s 1Q24 net profit of MYR15m (+38% YoY, +33% QoQ) and 1Q24 lockedin sales of MYR88m were above expectations. TILB will very likely exceed its internal sales target of MYR150m for FY24 (-39% YoY). We raise our earnings forecasts by 17-21% to factor in a higher sales assumption for FY24E (+80%). Our TP is raised to MYR1.24 (+29sen) on a higher 0.6x rolled forward FY25E P/B. U/G to BUY, backed by FY24E div yield of 5.4%. 

 

 

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LIM & TAN LIM & TAN

Delfi Ltd (S$0.885, unchanged) has provided a brief update on the Group’s operaTIons for the fi rst quarter this year.

The Group recorded lower EBITDA for 1Q 2024 on the back of consolidated Net Sales lower Y-o-Y by 5.3% as reported for the period in the Group’s US Dollar reporTIng currency. The reduction in sales was driven by lower Y-o-Y sales in Indonesia and Regional Markets by 6.6% and 2.5%, respecTIvely. In constant currency terms, sales in Indonesia were lower by 4.7%, while they were higher in Regional Markets by 2.5%. When compared to Net Sales from the previous quarter of 4Q 2023, our 1Q 2024 performance was higher by 15.2% in our reporting currency.

At S$0.885, Delfi is capitalized at S$540.9mln and trades at 1.5x P/B and forward P/E of 8.6x. Dividend yield represents an aƩ racƟ ve 6.6%. Key markets of Indonesia, Philippines and Malaysia are forecasted to achieve GDP growth of between 4.0% - 7.0%. Cocoa prices have dropped since its peak last seen in mid-Apr’24, although prices remain tripled since a year ago. While Delfi has signifi cantly hedged raw material prices for 2024, margins support for 2025 will depend on Delfi ’s cost containment iniƟ aƟ ves and ability to pass price adjustments to consumers. Consensus estimates of S$1.20 represent a 35.6% potential upside. In view of Delfi ’s cheap valuations both historically and versus its peers, maintain Accumulate.

 

 

 

 

 

Valuetronics performed in line with market expectations thanks to the higher interest rate environment which benefitted their interest income takings while the easing of component shortages and better product mix saw gross profit up marginally despite the 17% decline in sales. We believe Valuetronics’ performance should remain resilient in the year ahead thanks to the higher for longer rate environment and continued easing of component shortage issues while new customer demand should help to mitigate existing customer demand weakness.

At its last close of 64.5 cents, Valuetronics is valued at $278mln and trades at 1x book and 10x PE. Trading at a dividend yield of 6.6% and with 70% of its market cap backed by net cash and with management’s intention to continue its share buy back program (having spent only HK$79mln against its target of HK$250mln) we believe the stock will remain well-supported and resilient. We maintain an “Accumulate” rating and note that consensus target price is 70-75 cents. 

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