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UOB KAYHIAN |
CGS CIMB |
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DFI Retail Group Holdings (DFI SP) Exits RRH Stake To Fuel Higher-margin Businesses
DFI’s exit of its minority stake in Robinsons Retail in the Philippines should enable the company to continue its strategic refocus on higher-return core businesses. Despite selling at a discount to its entry cost, the deal supports DFI’s pivot toward ROCEaccretive operations. With 2025 profit growth guided at 14–34% yoy and net debt now eliminated, DFI is well-positioned for growth, improved margins and dividend upside. Maintain BUY. Target price raised to US$3.50.
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Property - Overall Positive carry and low HIBOR help home sales and reduce developers’ funding cost
■ HK new home sales in May looked encouraging at 2.3k units, more than 2x of Apr on better market sentiment. SHKP was the largest contributor to this. ■ We think unexpected low HIBOR could be sustained for a while, which has led to positive carry for residential and is likely to boost new home sales. ■ Meanwhile, we estimate interest saving for HK developers to account for 2.9% of their FY25 net profit, for every 100bp decline in 1M HIBOR. ■ We reiterate our Overweight call on HK property sector. SHKP, Link REIT, Kerry, Wharf REIC and HLD are our preferred stocks.
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UOB KAYHIAN |
CGS CIMB |
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STRATEGY – GREATER CHINA
Alpha Picks: June Conviction Calls
The HSI and MSCI China index rebounded 5.3% mom and 3.5% mom respectively in May, after China and the US agreed on a 90-day tariff truce. Nonetheless, geopolitical uncertainties and tariff war risks remain. Hence, we continue to favour domestic policy beneficiaries and defensive sectors that have been gaining traction in recent weeks. New additions to our BUY list are Prudential and Sino Biopharm, and we take profit on SHKP and TCOM.
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Internet Services The long-term growth story remains solid
■ JD has asked merchants to bear a higher portion of subsidies on its platform. This, as well as deep subsidy for the various players’ food delivery, may not be sustainable. ■ While we expect a weaker 2Q25F qoq for JD and Meituan due to their subsidy programmes, we believe Meituan will defend its leading position in food delivery. ■ Alibaba and Tencent maintained their capex plan for investment in artificial intelligence (AI), and we expect their long-term AI growth story has not changed. ■ We expect PDD will suffer from the Temu business model change and match the national home appliances subsidy programme for the next two to three quarters. ■ Reiterate sector Overweight; our top picks are Tencent and Alibaba.
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| MAYBANK KIM ENG | MAYBANK KIM ENG |
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CapitaLand Malaysia Trust (CLMT MK) Proposed placement
Short-term dilution; raise DDM-TP to MYR0.76 CLMT has proposed a private placement of up to 435.4m new units to raise MYR250m. The exercise dilutes FY25E EPU/DPU by ~6%, but savings from interest cost and full-year earnings from its new logistics assets are expected to lift FY26/27E EPU/DPU by ~3%. We raise our FY25/26/27E net profit forecasts by +8%/+18%/+18% to account for contribution from new logistics assets. Despite higher earnings, our DDM-TP is lifted only to MYR0.76 (from MYR0.75; Ke: 8.3%) after accounting for the enlarged share base post placement. CLMT offers attractive FY25/26E net DPU yields of 6.7%/7.3%. Maintain BUY.
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Malaysia Banking A more cautious outlook
Sector downgrade to NEUTRAL In light of slower GDP growth ahead, we have trimmed our banks’ earnings by 5%/4% for 2025/2026, and now forecast 2025/26E net profit growth of 1.1%/5.0% respectively. Given prevailing uncertainties on the external front and the prospect of more subdued earnings growth, we are now NEUTRAL (from POSITIVE before) on the banking sector, with BUYs on PBK, AMMB, HLBK and HLFG, in that order of preference.
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