Stock Idea #3 Lendlease Global Commercial REIT
UOB Kay Hian has
maintained its Buy rating on the company with a target price of $0.99.
Warm ties between Singapore and Malaysia bodes well for the the company due to proximity of train line to the malls.
“Warmer ties rekindle HSR. Prime Minister Ismail Sabri Yaakob has expressed Malaysia’s eagerness to revive the 350km Kuala Lumpur (KL)-Singapore High Speed Rail (HSR), which cuts travelling time between KL and Singapore to 90 minutes.
If possible, the Malaysians would like to speed up the planning process as Malaysia also wants to establish a HSR between Kuala Lumpur and Bangkok. The HSR could connect Singapore all the way to Bangkok if all three ASEAN countries can reach an agreement.
Prime Minister Lee Hsien Loong stated that Singapore would be receptive to fresh proposals on the HSR project during a joint press conference with Datuk Seri Ismail to launch the Vaccinated Travel Lane – Land in Dec 21.
Since then, the ministries of transport of both Singapore and Malaysia have been in constant dialogue.
Terminal station for HSR located near Jem. The terminal station for the HSR in Singapore would be situated at Jurong Lake District. The 12ha site is currently occupied by Jurong Country Club and is 600m from Jurong East MRT Station, which is served by the NorthSouth and East-West MRT lines.
Connectivity will be enhanced when Jurong Region Line Phase 2 is completed in 2027.”
>> Read more about the company here.
Stock Idea #4 Singapore Airlines
CGS CIMB has maintained its
ADD rating on the company with a target price of $6.10.
With strong capacity restoration and muted competition allow the company to catch the demand recovery.
“We expect SIA to do very well in the coming quarters, due to the combination of rising capacity restoration, strong demand, high load factors and robust yields. The SIA group’s ASK capacity rose from 4QFY3/22’s 52% of the pre-pandemic base to 1QFY23’s 66% and we forecast further recovery to 73% in 2QFY23F and to 79% in 3QFY23F.
For FY23F as a whole, we think that the SIA group should be able to restore 74% of its preCovid-19 capacity, rising to at least 95% in FY24F or higher if China reopens its borders sooner.
Competition has also been relatively muted so far, with airlines in Southeast Asia gradually ramping up capacity deployment and certain key competitors such as Cathay Pacific and the mainland Chinese airlines still held back by Hong Kong’s border controls.”
>> Read more about the company here.
Stock Idea #5 Singapore Exchange Limited
Phillip Capital has
upgraded its rating on the stock to BUY with a target price at $11.71.
With resilient existing business and good growth for its newly acquired business, the company is bound to have good bottom line.
“Excluding treasury income, revenue grew 7% YoY, lifted by higher trading and clearing revenues from equity derivatives, currencies, and commodities.
Treasury and other revenue income dropped as treasury income was affected by lower yields from low interest rates.
With the acquisition of MaxxTrader in Jan 2022, SGX’s OTC FX (BidFX, MaxxTrader and Electronic Communication Network (ECN)) average daily volume grew 64% YoY to US$70.6bn with a target of US$100bn in the medium term, and contributed S$55mn, or 5%, to FY22 revenue.
Consequently, FICC and DCI grew 23% and 3% YoY respectively to boost revenue growth. Both businesses are expected to remain growth engines for SGX, with opportunities from cross-selling and new client acquisitions on the back of customer access to an enlarged trading network.”
>> Read more about the company here.
Stock Idea #6 Tiong Woon Corporation Holding
UOB Kay Hian has maintained its
BUY rating on the company with a target price of $0.88.
With it being the second largest crane company in Singapore, it is poised to enjoy the recovery of the construction industry.
“With comprehensive ownership of more than 500 cranes, some of which can have a capacity of up to 1,600 tonnes each, Tiong Woon is in a good position to benefit from the strong resumption of activities in Singapore’s construction sector and rising capex in the oil & gas industry.
The construction sector will have strong demand for cranes in the coming years driven by accelerating construction of public housing and new mega infrastructure projects including the Cross Island Line, Changi Airport T5, Tuas Mega Port and the North South Corridor.
The Housing & Development Board plans to launch up to 23,000 flats a year in 2022-23, a huge jump from the 48,509 flats launched in 2019-21 (16,170 flats per year). In addition, construction of more petrochemical plants could further boost crane demand. ”
>> Read more about the company here.
Stock Idea #7 AEM Holdings Ltd
CGS CIMB has
maintained its Add rating on the company with a target price of $6.54.
Better than expected results was the impetus behind the good valuation.
“1H22 revenue rose 181% yoy to S$540.5m driven by the volume ramp up for its new generation System Level Test Handlers, Burn-In Test Handlers and the consolidation of its CEI acquisition. 1H22 revenue was 3% above our S$525.0m forecast and formed 72% of our/Bloomberg consensus full-year forecast.
1H22 net profit jumped 180% yoy to S$82.8m and was similarly 3% above our S$80.4m forecast. 1H22 net profit formed 70% of our/Bloomberg consensus full-year forecast. Gross profit margin fell 3% pts yoy from 34% in 1H21 to 31% in 1H22 due to increased cost pressure from supply chain challenges.
AEM managed to defend its profit before tax (PBT) margin of 18.8% in 2Q22, just 0.2% pt lower than the 19% achieved in 1Q22. Legal costs spiked from S$3.4m in 1H21 to S$10.8m in 1H22 due to an ongoing confidential arbitration.
Removing legal costs, 1H22 PBT margin was 20.9% in 1H22 vs. 20.2% in 1H21. An interim DPS of 6.7 Sct (25% payout policy) was declared.”
>> Read more about the company here.
