Hong Kong Retail Research | November 12, 2024

Broker: CGS International

Market Highlights

In a week marked by solid consumer sentiment data and optimism around President Donald Trump’s pro-growth agenda, US stocks saw significant gains. The S&P 500 rose for the fourth consecutive session, hitting its 50th record this year and closing with a weekly gain of 4.7%. Tesla Inc. made headlines as its market cap surged past the trillion-dollar mark, driven by a rally in its stock price. Defensive shares led the market on the last trading day of the week, and small caps, benefiting from Trump’s protectionist stance, attracted the largest inflow since March.

Singapore Airlines: 2QFY25 Performance

Singapore Airlines (SIA) reported a core net profit of S\$296 million for 2QFY3/25, which was 29% below expectations and 54% lower year-on-year. The company also experienced a 32% decline quarter-on-quarter. Given that the 1QFY25 core net profit was ‘only’ 38% lower year-on-year and 21% lower quarter-on-quarter, the stock is expected to face pressure when the market reopens. We reiterate our ‘Reduce’ rating on SIA, citing continued weakening yields. However, our target price has been adjusted to S\$6 as we roll forward to end-CY25F, maintaining an unchanged P/BV of 1.1x.

Sembcorp Industries: Divesting Recycled Waste Asset

Sembcorp Industries has announced its intention to divest a recycled waste asset. This strategic move aligns with the company’s broader objective to optimize its asset portfolio, focusing on core competencies and sustainable growth. The market is expected to react positively to this divestment as it will likely improve the company’s balance sheet and operational focus.

OCBC: On Track to Meet FY24F Targets

OCBC Bank remains on track to meet its FY24F targets. The bank’s robust financial health and strategic initiatives are expected to drive its performance, making it a stock to watch in the coming months. Investors can look forward to steady returns as OCBC continues to execute its growth strategy effectively.

United Overseas Bank: Capital Return on the Cards

United Overseas Bank (UOB) is reportedly considering a capital return to its shareholders. This move is anticipated to be well-received by the market, as it reflects the bank’s strong capital position and commitment to delivering shareholder value. Investors should keep an eye on UOB for potential upside from this development.

CARsgen Therapeutics Holdings Ltd (2171): Technical Buy

CARsgen Therapeutics Holdings Ltd has shown a bullish reversal, confirmed by recent price actions. The stock has broken out of a larger falling wedge, forming higher highs and lows while testing the gap resistance zone. The breakout above HK\$7.36 resistance turned support signifies a bullish reversal of the inverted head and shoulder pattern. Additionally, prices have closed above all Ichimoku indicators, and the MACD histogram is positive with a steady rise in the MACD/signal line post-crossover. The Stochastic Oscillator is also rising, crossing above the 50-line, and the Directional Movement Index confirms the bullish strength. Volume spikes further support the bullish bias. Risk-averse traders may consider waiting for a pullback near the second entry price of HK\$5.82 before executing a buy order.

Company Overview

CARsgen Therapeutics Holdings Limited operates as a biotechnology company, focusing on the development of chimeric antigen receptor (CAR) T-cell therapeutics. The company conducts its business operations across China, the United States, and Europe.

Technical Snapshot

• Entry Prices: 8.46, 5.82, 4.80
• Support Levels: 7.36, 5.16
• Stop Loss: 4.27
• Resistance Levels: 8.93, 13.80
• Target Prices: 11.34, 14.12, 20.00, 30.00

Market Indicators

• MACD histogram is positive, and MACD/signal line has risen steadily after the crossover at the bottom.
• Stochastic Oscillator is rising and has crossed above the 50-line.
• Directional Movement Index confirms the bullish strength.
• Volume spike supports the bullish bias.

Conclusion

The market sentiment remains optimistic with significant gains across major indices and bullish trends in key stocks like Tesla Inc. Singapore Airlines faces challenges with weaker-than-expected quarterly results, prompting a cautious outlook. Sembcorp Industries, OCBC, and UOB present positive opportunities with strategic moves and strong financial positions. CARsgen Therapeutics Holdings Ltd stands out with a confirmed bullish reversal, making it a compelling buy for investors looking to capitalize on its upward momentum.