Alpha Edge Investing

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DBS: 4 stocks to ride on the jump in workplace and transit stations mobility Trending Sector

Back-to-Office Beneficiaries  4 stocks to ride on the jump in workplace and transit stations mobility Singapore mobility chart Source: Google, DBS Bank Mobility figures are climbing closer to pre-pandemic levels as Singapore continues the transition to Living with COVID and companies shifted to 50% WIO: LTA figures show that the average daily trips on taxi […]

DBS: Nanofilm (NANO SP) Update

We are expecting a strong rebound in earnings in 2H21 vs 1H21. In fact there is a high chance that they can beat DBS estimates of S$55.6m net profit for FY21E. Fundamentally, though the supply disruption issues still persist, Nanofilm’s customers are generally seeing an improvement from 3Q21 and there is no drop in orders […]

DBS: Xiaomi Corp – BUY TP HK$23.70

Investment Thesis Strong penetration in the Europe market and taking market share of Huawei overseas together fuel a market-beating smartphone shipment growth, an FY20-23 CAGR of 17.0%. A more diversified revenue distribution worldwide also minimises its geopolitical risk under the technology embargo of China. Promising internet service growth imposes a strong pull on the overall […]

DBS: SEA Ltd – BUY TP US$278

PUBG sues Garena PUBG’s publisher Krafton has filed a lawsuit against Garena, Apple and Google; coincides with the launch of Free Fire Max.  Tencent being a large shareholder of both Sea Ltd and Krafton should provide some comfort Recent correction in Sea Ltd is alongside a big correction in high-growth e-commerce companies globally. Maintain BUY […]

China Property Sector: More policy easing on the way

<News Alert> China Property Sector: More policy easing on the way The People’s Bank of China has announced to cut the 1-year MLF rate by 10bps to 2.85%. This is expected to inject c.Rmb200 m of net medium-term liquidity into the financial system PBOC’s decision to cut their MLF and repo rates marks its first […]

DBS: HK Property Sector (Office and Retail) – Too much value to ignore

Emerging new wave of supply could cap office rental upside The COVID resurgence delays the border re-opening but not derail the retail sector recovery Low valuations to support landlords’ share price Preferred landlords: Swire Properties & Hongkong Land Emerging new supply could cap office rental upside. After more than two years of correction, office market has […]

DBS: China Basic Materials Sector – Opportunities from tighter supply in 1Q22

China’s new infrastructure development and carbon policies to drive better consumption growth for lithium and aluminium materials Growing demand amid accommodative China monetary policies and persistent tight supply to benefit product price sentiment Positive on lithium and aluminium but turn cautious on steel Sector valuation has turned attractive and we prefer industry cost leaders with […]

OIR: Market Pulse – Country Garden, China Strategy

Research Ideas Country Garden (2007 HK) – Taking a cautious stance • Contracted sales fell 2.2% in 2022• Not ruling out dilution risks from potential equity fund raising• Lower fair value to HKD6.15 2021 contracted sales fell 2.2% to RMB558b – Country Garden’s (Stock code: 2007 HK) attributable contracted sales jumped 76.1% YoY to RMB22.6b […]

PhillipCapital: United Overseas Bank Limited – Turning more competitive overnight

UOB acquired Citigroup’s consumer banking franchise in Indonesia, Malaysia, Thailand and Vietnam for ~S$5bn. Maintain ACCUMULATE with a higher GGM TP of S$31.30, from S$29.00. We raise FY21e earnings by 3.8% as we increase NIM estimates for FY21e. We now assume 1.26x FY21e P/BV in our GGM valuation, up from 1.17x, as we raise our ROE […]

CIMB: Times Neighborhood – ADD TP HK$4.50 (Previous HK$9.80)

Market’s low expectations unjustified ■ Times Neighborhood (TN) has met its FY21F key operating targets. However, we think it could lower its growth guidance for FY22-23F.■ Despite a flattish gross profit margin outlook, management believes improvements in net profit margin in FY21F are likely thanks to cost savings.■ TN does not have a share buyback […]

CIMB: Ping An Insurance – ADD TP HK$83 (Previous HK$82)

Saving ammunition for the next quarter? ■ We think 4Q21’s weak individual FYP supports the thesis that ammunition may have been saved for 1Q22F, at the expense of 4Q21.■ Analysis of 2- and 3-year CAGR suggest 23-38% of 4Q21 individual FYP (Fig 2) may have been impacted, with this largely concentrated in Dec 2021.■ With […]

CIMB: China Tourism Group Duty Free – ADD TP Rmb301 (Previous Rmb314)

Expecting a better recovery in FY22F ■ CDF issued a profit alert for FY21. Net profit rose by 54%–66% yoy to Rmb9.4bn– 10.1bn in FY21, slightly below our expectation, since tourist traffic suffered a sharp decline due to the epidemic situation in 2H21. The detailed result w ill be on 23 Apr.■ Since the Company’s […]

UOBKH: Singapore Exchange – HOLD TP $9.74

1HFY22 Earnings Preview: Expect Flattish Results, Dragged By Cash Equities With SGX’s 1HFY22 results announcement approaching, we reviewed SGX’s semiannual market statistics and adjusted our forecasts accordingly. Excluding the cash equities segment, we project yoy growth from the other segments based on strong 1HFY22 volumes. However, with SGX trading at its +1SD historical mean PE, […]

CIMB: UOB – ADD TP $33.50

A booster shot from Citigroup’s franchise ■ We think that the acquisition of Citigroup’s consumer businesses is not cheap but strategic to boost UOB’s retail banking market share in ID, MY and TH.■ Fed rate hikes should provide ROE uplift until earnings contribution from the acquisition kicks in. We raise FY22-23F NIMs by c.2-5bp to […]

CIMB: Property Devt & Invt (Overweight) – City Development, UOL

A slower Dec ■ Dec monthly home sales fell 58% mom and was 47% lower yoy following the property cooling measures announced in Dec, and absence of big launches.■ Volume transactions rose 29.4% yoy to 13,3489 units in 2021 while private home prices increased 10.6% yoy.■ Reiterate sector Overweight on valuations. Sector top picks: CIT […]

DBS: UOB – BUY TP $34.20

Accelerating its ASEAN strategy Latest acquisition of Citi’s assets cements UOB’s ASEAN strategy Acquisition allows UOB to scale up and deepen regional franchise Execution remains key to longer-term synergies Maintain BUY, higher TP of S$34.20 Investment ThesisA recovery play and Fed hike beneficiary. We believe there is further room for UOB’s share price to re-rate as […]


Raising EPS Ests. and TP ($65); Reiterate Outperform Rating RECOMMENDATION We reiterate our Outperform rating on WFC shares following its release of 4Q results thatincluded revenue-driven EPS and pretax pre-provision income beats. Additionally, the bankestablished 2022 NII guidance that was well above expectations, while disclosing additionalexpense rationalization opportunities. As such, we remain bullish on WFC […]

CIMB: AMMB Holdings – ADD TP RM3.64

Key takeaways from ESG Day ■ We are positive on AMMB hosting its inaugural ESG Day on 12 Jan as this reflected its commitment to enhance its ESG disclosure.■ Going forward, we believe AMMB’s ESG focus would be on the analysis of its climate-change risks and further improvement in its ESG disclosure.■ Reiterate Add given […]

OIR: Market Pulse – UOB, BOC HK, Yanlord, Delta Airlines, Southwest Airlines, Qantas, SATS, SIA Engineering

Research Ideas United Overseas Bank Ltd (UOB SP) – Acquiring Citi’s consumer businesses • UOB has entered into agreements to acquire Citi’s consumer businesses in key Asean markets of Indonesia, Thailand, Malaysia and Vietnam. • We view this announcement positively, which should help deepen its Asean franchise and double its Asean-4 scale, adding to rate […]

KGI: China Oilfield Services Limited (2883 HK): A lagging oil & gas E&P counter

BUY Entry – 7.1 Target – 8.1 Stop Loss – 6.6 China Oilfield Services Limited is a comprehensive oilfield service provider. The Company mainly operates through four business segments. The Drilling Services segment is mainly engaged in the provision of oilfield drilling services. The Oil Field Technical Services segment is mainly engaged in the provision […]

KGI: Zijin Mining Group Company Limited (2899 HK) – Round 2 of the commodities supercycle 

Buy Entry – 9.5 Target – 11.0 Stop Loss – 8.8 Zijin Mining Group Company Limited is a China-based company principally engaged in the exploration, mining, smelting and sales of gold and other metal minerals. The Company’s main products include gold products, copper products, lead and zinc products, iron products, silver products, among others. Its […]

KGI: Olam International (OLAM SP) – The return of the king

RE-ITERATE BUY Entry – 1.78 Target – 1.92 Stop Loss – 1.71 Olam is a leading food and agri-business operating across the value chain in more than 60 countries, supplying food, ingredients, feed and fibre to more than 17,300 customers worldwide. Listed on 11 February 2005 on the mainboard of SGX, Olam currently ranks among the […]

KGI: UOB (UOB SP) – We have lift off!

BUY Entry – 29.0 Target – 32.00 Stop Loss – 27.00 UOB is Singapore’s third largest largest bank by total assets. As at the end of 2020, it had S$431bn in total assets and generated a net income of S$2.92bn. The bank has more than 500 offices across 19 countries and offers a range of […]

KGI: Vertex Tech (VTAC SP) – First Singapore SPAC

Singapore’s first special purpose acquisition company (SPAC) will start trading at 2pm on Thursday (20 Jan). Offering opened on Thursday (13 Jan) and will close 12pm on Tuesday (18 Jan).  A total of 11.8mn units will be offered at an offer price of S$5. However, 11.2mn will be offered via international placement that includes institutional […]

CIMB: Pharmaniaga Bhd – ADD RM1.00

No major impact from vaccine ceiling price ■ The government has set a wholesale ceiling price of RM62/dose for private market sales of the Sinovac Covid-19 vaccine, effective from 15 Jan 2022.■ PHRM projects no major impact as the ceiling price is close to its selling prices but we cut FY21-22F core EPS to bake […]

CIMB: Duopharma Biotech Bhd – HOLD TP RM1.60

Unfazed by Sinopharm vaccine ceiling price ■ The government has set a wholesale ceiling price of RM49/dose for private market sales of the Sinopharm Covid-19 vaccine, effective from 15 Jan 2022.■ While lower vs. DBB’s selling prices, the earnings impact should be minimal.■ Reiterate Hold with unchanged TP of RM1.60 (18x FY23F P/E). Government sets […]

CIMB: Tsingtao Brewery – ADD TP HK$97 (Previous HK$95)

Product mix upgrade will continue in 2022 ■ Tsingtao issued a positive profit alert for FY21, with net profit rising by 43% yoy to Rmb3.15bn. Excluding a non-recurring gain of Rmb436m due to government acquisition of a land, the core net profit rose by 23.2% yoy to Rmb2.7bn, largely in line. The detailed results will […]

CIMB: Shimao Services – ADD TP HK$8.30 (Previous HK$26.80)

Slower inorganic growth; attractive valuation ■ Although Shimao Services achieved its key GFA growth targets in FY21, we think its expansion will slow down in FY22-23F without sizeable M&As.■ Receivables from Shimao Group accounted for less than 20% of its total receivables as of end-Jun 21, in our estimate.■ The proportion of revenue from Shimao […]

UOBKH: UOB – Not Rated

Acquisition Of Citigroup’s Consumer Banking Businesses in Indonesia, Malaysia, Thailand And Vietnam UOB has entered into agreements to acquire Citigroup’s consumer banking businesses comprising unsecured and secured lending portfolios, wealth management and retail deposit businesses in Malaysia, Thailand, Indonesia and Vietnam. The acquisition is expected to double retail customer base and provide uplift to income […]

KE: AirAsia Group Bhd – BUY TP RM1.31

Maintain BUY call and MYR1.31 SOP-based TP As we had earlier flagged (link), AAGB has been classified as a PN17 listed issuer due to its negative shareholders’ equity position. That said, this does not mean that AAGB is insolvent. Moreover, there are at least 6 ways that AAGB can narrow its negative shareholders’ equity position […]

KE: Bursa Malaysia – HOLD TP RM6.05

Lowering expectations; D/G to HOLD Trading activities have been slow at just MYR2b equity ADV in Dec 2021 and Jan 2022 MTD. Retail participation has fallen to 30%-31% in Nov-Dec 2021 from 38-40% in Jan-Jul 2021 on lack of catalysts as gains in the small cap index (barometer of retail interest) reversed from Nov 2021. […]

KE: Malaysia Marine Heavy Engr – BUY TP RM0.85

Maintain BUY and MYR0.85 TP MMHE prioritises for: (i) a stronger orders pipeline (heavy engineering & marine services), (ii) the delivery of existing projects on time, on schedule and on budget, (iii) improvement on its cost management and(iv) return to profitability this FY. We remain positive on MMHE – cash rich with undemanding valuations and […]

iFAST: Singapore Airlines announces 7Y USD notes at CT7 + 210bps IPG

Singapore Airlines is pricing 7Y USD senior unsecured notes at CT7 + 210bps IPG. Here is a quick summary about the new issue. Lim Teng Chong |  Published on 13 Jan 2022 Singapore Airlines Limited (“SIA”) is moving to strengthen its balance sheet and liquidity profile. The company announced on 12 January 2022 that it intends […]

KE: United Overseas Bank – BUY TP $31.15

Citi ASEAN is an accretive deal. Watch for execution UOB’s acquisition of Citigroup’s SE Asia assets is well timed to take advantage of ASEAN re-opening. The acquired client base is synergistic to UOB’s mass-wealth, omni-channel strategy and should further strengthen its integrated ASEAN franchise. Execution risks need to be watched, particularly from a cultural, systems […]

SCB: Weekly Market Update

Bouncing back?  Global stocks and bonds rose and the USD fell this week, despite a tighter-than-expected US job market and rising US, Euro area inflation. This suggests markets have largely priced in these concerns.  Emerging Markets, particularly China, led the equity market gains, following yet another strong reiteration by China’s State Council of […]

DBS: Luk Fook Holdings International Ltd – BUY TP HK$30.00

News alert: 3Q FY22 operating data in line; SSSG outperformed major peer Luk Fook scored 33% SSSG in China and 41% SSSG in HK/Macau during 3Q FY22 (i.e. Oct-Dec 2021) and outperformed Chow Tai Fook The company stays on track to add c.500 stores in Mainland China for FY22, and sees ample room to open […]

DBS: Sands China – BUY TP HK$39.75

News Alert: Macau gaming sector updates on license re-tendering Macau government released updates on its gaming concession New regulations confirmed so far came largely in line with market expectations No government rep to be appointed to the Board of Directors of casino operators, a slight positive surprise. Maintain BUY on Galaxy, SJM and Sands China  […]

DBS: United Overseas Bank Ltd – BUY TP $31.00

Accelerating its ASEAN strategy Latest acquisition of Citi’s assets cements UOB’s ASEAN strategy Acquisition allows UOB to scale up and deepen regional franchise Execution remains key to longer-term synergies Maintain BUY, higher TP of S$34.20 Investment Thesis A recovery play and Fed hike beneficiary. We believe there is further room for UOB’s share price to re-rate […]

DBS: ASEAN Industry Focus Telecom Sector – Was 2021 an inflection point?

After underperforming for 5-years, telecom operators (telcos) – in Indonesia & Thailand – outperformed in 2021 Indonesian telcos may continue to outperform while Singapore telcos could start outperforming in 2022 aided by mobile recovery and capital re-cycling                        Singtel and PT Telkom are our top […]

DBS: Regional Energy Sector: 2022 outlook – what’s hot, what’s not

If the energy crisis this winter taught us anything, it is that renewables and fossil fuels must coexist for a stable future and too much emphasis on either will cause ripples in the short run, notwithstanding the long-term energy transition scenario Thus, we don’t foresee a hard landing anytime soon for energy commodity prices, even […]

DBS: Tsingtao Brewery Co Ltd – HOLD TP HK$64.20

News Alert: Tsingtao Brewery announced preliminary FY21 results with 43% y-o-y attributable profits growth and 21% y-o-y core profit growth, above our expectation Tsingtao Brewery announced its FY21 profit alert with net profit up 43% y-o-y to RMB3,150mn and core profit up 21% y-o-y to RMB2,194mn, above our expectation. Gain on the land resumption was […]

DBS: Sa Sa International Holdings Ltd – BUY TP HK$2.56

Meeting Takeaways: 3Q FY22 operating data in line; near-term hiccups from tightening amid Omicron cases Sa Sa scored 4.7% y-o-y growth in group revenue for 3Q FY22 (i.e. Oct-Dec 2021) to HK$982m; latest sales in HK/Macau also sustained single-digit y-o-y growth in 1-12 Jan 2022 While 3Q FY22 revenue was 53.7% lower than pre-COVID level […]

DBS: Pinduoduo Inc – BUY TP US$96

Key e-grocery player with huge user base Investment Thesis Monetisation potential from 700m+ user base. Pinduouo’s MAU of 700m+ surpassed Alibaba in 2020. This should continuously attract 3P merchants and expand product categories and SKUs, which will drive advertising revenue. We expect higher earnings thanks to improving operating efficiency and more focus on high-margin marketplace […]

DBS: Taiwan Semiconductor Manufacturing Co Ltd – BUY TP TWD860

<Results Analysis> Stellar 2021, Upbeat 2022 guidance Another record quarter with strong gross margins of 52.7% Gross margin to inch higher towards 53-55% in 1Q22; Guiding for higher revenue growth and capex ahead Raising FY22/23F earnings forecasts by 10-16%  Preferred pick for semiconductors; TP lifted to NT$860 / US$140   4Q21 beat expectations. 4Q21 revenue grew 5.8% q-o-q to US$15.74bn, […]

DBS: Singapore Exchange – BUY TP $10.20

No immediate catalysts Investment Thesis:  Maintain HOLD; no immediate catalysts. While SGX saw good contributions from all business segments in last two years, including from equities and fixed income, currencies and commodities (FICC) on the back of heightened market volatility, we maintain our HOLD call, as we believe there are no immediate catalysts for the stock, […]

DBS: Logan Group – BUY TP HK$7.55

Steady as she goes Investment Thesis Better-than-peers access to capital market funding. Logan was one of the only two POE mid-caps that were invited by the CSRC and Shanghai Exchange to apply for the issuance of public corporate bonds in Dec-21. The company was also successful in the pursuance of an HK$1.17bn share placement in […]

DBS: Alibaba – BUY TP HK$211

Encouraging user growth and promising cloud outlook Investment Thesis Largest e-commerce platform with marketplaces as a key driver. Alibaba continues investing in community marketplaces to deepen penetration into lower-tier cities via multiple consumer touch points in its ecosystem like Taobao Deals and Taobao Grocery. Cloud leader in China. Alibaba leads the China cloud services market […]

DBS: Singapore Stock Pulse – Uncertain in anticipation, recovers on news

Market view update Past taper-rate hike cycle from 2014 to 2017 Straits Times Index (Daily) Rate hikes and equity markets – Uncertain in anticipation, recovers on news What’s new: FED governor Lael Brainard became the 4th official to signal a March rate hike, consensus (source: Bloomberg) thinks there can be 3 to 4 hikes this year. […]

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