SATS Ltd (ADD, tp:SGD4.30) – Not a sitting duck
SATS turned in a net profit of S$0.8m in 4Q21 vs. our expected S$11m net loss.
FY21 core net loss of S$7m is narrower than our expected S$26m. Higher-than expected non-aviation revenue, lower staff costs from government relief and share of MI helped the performance. We see buying opportunity on recent share price dip as Singapore regressed to Phase 2. Border reopening is a catalyst. DCF TP unchanged at S$4.30.

Sembcorp Industries (ADD, tp:SGD2.43) – Renewables proxy in Singapore
SCI aims to grow renewable energy profit by 30% (5-year CAGR) by 2025F from
S$46m in FY2020. ROE target: 10%. No more investment in coal power. The
group targets to grow its renewable energy installed capacity to 10GW from
current 2.6GW. The target is higher than Philippines peer ACEN (5GW). We are
positive on SCI’s renewables commitment, but execution is key. Assuming a bluesky scenario, SCI’s profit could reach S$397m by FY25F. We now value SCI
based on 15x FY22F P/E, in line with Asian peers, to derive a higher TP of S$2.43. Reiterate Add.

SingTel (ADD, tp:SGD2.90) – Look beyond FY21’s earnings trough
2HFY3/21 core net profit fell 22% yoy but FY21 beat our forecast by 8%. Lower
Optus, Singapore, Globe & Tsel profits were partly aided by Bharti. We reiterate
our Add call with a 6% lower SOP-based target price of S$2.90.