buysellhold july.23



Seatrium Ltd

Franchising FPUs


■ We add STM back into our Singapore country picks in view of its speed of order wins. With the latest FPU LOI from BP, YTD wins are nearly c.S$12bn.

■ We see STM’s first newbuild of floating production unit (FPU, est. US$350m400m) for BP as a testament of the yard’s track record among oil majors.

■ This is the fourth FPU for STM since 2018, following three units for Shell, of which the latest, Sparta FPU, was awarded in Jan 24.

■ We reiterate our Add call with an unchanged TP of S$2.62. Re-rating catalysts: stronger-than-expected order wins and share buybacks.



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Henderson Land Development

FY24F DPS well secured by disposals


■ HLD stressed its diversified channels for land banking as well as opportunities for disposal of some of its farmland as one-off income.

■ Management says the impact of shoppers’ cross-border consumption on its malls is less than the overall market, with positive rental reversion.

■ Reiterate Add for its ability to maintain stable DPS of HK$1.8 (7.8% FY24F dividend yield). Our HK$25.3 TP is based on a 50% target discount to NAV.



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Seatrium ($1.72, down 6 cents) is pleased to announce that it has been awarded a Letter of Intent (LOI) by BP Exploration & Production Inc. (bp) to provide services to carry out certain early engineering works pending the finalisation of a definitive contract for engineering, procurement, construction and commissioning work for bp’s Kaskida Floating Production Unit (FPU) project in the US Gulf of Mexico.

The Kaskida project is a greenfield development located approximately 250 miles southwest of New Orleans, in the Keathley Canyon area of the Gulf of Mexico. Comprising a single topside module supported by a four-column semi-submersible hull, the Kaskida FPU is supported by subsea production wells located in a water depth of approximately 6,000 feet. The EPC contract award is subject to mutually agreed terms and conditions and management approval, and the final investment decision by bp.

Seatrium’s market cap stands at S$5.9bln and currently trades at 39x FY24 PE and 13x FY25 PE with consensus expecting FY24 profit to come in at $153mln and FY25 profit of $470mln. Consensus target price stands at S$2.83, representing 65% upside from current share price. We maintain “Accumulate”.



Yangzijiang Financial Holdings Ltd / YZJFH ($0.325, down 0.5 cents) has announced that the Group’s Maritime Fund has entered into a strategic joint venture with Alpha Omega Marine, a Singapore-based equity investment vehicle specialising in maritime opportunities, to acquire another high-quality, modern and eco-friendly dry bulk vessel, which will be named MV One and Only, following the acquisition of MV As One on 28 March 2024.

At S$0.325, YZJFH is capitalised at S$1.1bln and trades at undemanding valuations of 5.6x forward P/E, 0.3x P/B and 6.8% dividend yield. The company has made inroads since receiving shareholders’ approval last month to expand into a broader range of maritime-related activities. While investor sentiments continue to look for a recovery in China’s real estate sector, share price may see support in YZJFH’s S$1.4bln cash pile, greater than its current market cap. Based on consensus target price of 45 cents, potential upside from its last traded price of 32.5 cents is about 38%. Given the attractive yield, low price to book and good potential upside to consensus target price of 38%, we recommend an “Accumulate” rating on YZJFH.


Semiconductor 1Q24 Update - Memory in full recovery mode

  • 1Q24 revenue growth accelerated significantly to 45% YoY (4Q23: 25% YoY). NVDA’s >3.5x spike in revenue (accounting for 22% points of the sector’s YoY growth) helped to offset lingering weakness in Equipment.

  • AI demand remained very robust, with AI GPUs (NVDA) still the main beneficiaries. Memory companies are seeing a huge return to growth after 4 quarters of decline. Semiconductors still outperforming vs S&P 500 on 1M/3M/1Y.

  • Forward guidance is for 2Q24e revenue growth of ~32% YoY. We expect growth to be supported by increasing AI-related spending on GPUs and High Bandwidth Memory (HBM), a slight recovery in the PC market, and higher wafer fabrication of <7nm chips.

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ISEC Healthcare Ltd

In the medium term, we are upbeat about the prospects of ISEC Healthcare’s continued expansion, particularly in Malaysia. In December 2023, the Group signed a S&P agreement to the proposed acquisition of certain parcels in a new 15-storey building with 2 lower ground floors at Bangsar South Township, Kuala Lumpur.

The new premises will be c.2.5X its existing clinic size in KL. With increasing demand for ophthalmology services in the region, strategic plans to expand into existing and new markets and the Group’s effort to enlarge their highly-specialized talent pool, positions it well for sustainable growth. 


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