Magnum :
Valuation and Investment Recommendation
Magnum is currently trading at attractive valuations, close to pandemic lows, with a projected 2025 PE of 10x, below the NFO sector’s five-year mean of 12-13x. These valuations, combined with the company’s low beta, defensive business nature, and steady cash flow, make it appealing to risk-averse investors. The company’s earnings resilience and prospective dividend yields of 6.2-8% in 2024-25 further enhance its attractiveness.
A potential monetization of Magnum’s stake in U-Mobile, anticipated as early as 1H25, serves as a key re-rating catalyst. U-Mobile’s listing through an IPO could fetch Magnum approximately RM630 million or RM0.44 per share, representing 36% of its current market cap. Magnum may distribute special dividends or shares in specie upon monetization, potentially translating to a yield of up to 36%.
UOB Kay Hian reaffirms a “BUY” recommendation for Magnum, albeit with a slightly reduced target price of RM1.55, reflecting adjustments for higher tax expenses. The target price implies a 13x 2025 PE, aligning with the mean. -UOBKH
PDD
3Q24 Financial Performance
PDD Holdings reported a revenue increase of 44% year-on-year to Rmb99.4 billion, although this was slightly below consensus estimates by 3%. The non-GAAP net profit was Rmb27.5 billion, 6% below expectations, yet the non-GAAP net margin expanded by 3 percentage points to 27.6%. These figures underscore the challenges faced by PDD due to soft commission revenue growth and increased competitive pressures.
UOB Kay Hian maintains a “BUY” recommendation for PDD Holdings, albeit with a lowered target price of US\$160.00. This valuation takes into account the lower valuation for Temu and core commerce PE. PDD is currently trading at 8.3x 2025F PE, against an 18% EPS CAGR over 2025-28-UOBKH
China Mengniu
Financial Projections and Analyst Recommendations
For the fiscal year ending December 2024, China Mengniu Dairy’s net profit is anticipated to be Rmb 4,708 million, with a projected increase to Rmb 5,848 million by 2025 and Rmb 6,676 million by 2026. The company’s earnings per share (EPS) is forecasted to be 119.0 fen in 2024, rising to 147.8 fen in 2025 and 168.8 fen in 2026.
The report maintains a “BUY” recommendation, with the target price raised by 1% to Rmb23.50. This valuation implies a 17.8x 2024 forward price-to-earnings (PE) ratio and a 14.3x 2025 forward PE ratio, highlighting the stock’s attractive valuation at the current trading levels of 13.4x 2024F PE and 10.8x 2025F PE.
Enhancing Shareholder Returns
In a bid to enhance shareholder value, China Mengniu Dairy plans to maintain a 40% dividend payout ratio for 2024, with an ambition to increase it to 50% within the next two years. The company has also initiated a HK\$2 billion share repurchase program, which commenced in August 2024, with all repurchased shares set to be canceled. – UOBKH
Trip.com
Trip.com continues to capitalize on strong travel demand, both domestically and internationally. In 3Q24, the company outperformed expectations with a 15.5% increase in net revenue, driven by resilient travel demand across all segments. The outbound travel sector, in particular, showed a robust recovery, with outbound hotel and air ticket bookings rebounding to 120% of pre-pandemic levels.
Trip.com’s international platform remains a key investment area, with significant growth potential in the upcoming quarter. Management anticipates revenue growth to accelerate in 4Q24, supported by solid demand and stabilizing prices. The company’s long-term growth strategy involves expanding market share and enhancing product offerings.
Trip.com has demonstrated strong cybersecurity measures and business ethics practices, although its corporate governance could improve. The company’s ESG rating was recently upgraded, reflecting better labor management practices. The recommendation for Trip.com is a resounding BUY. – OCBC
BYD Co Ltd
Potential Growth Driven by Premium and Overseas Expansion
BYD Co Ltd has shown remarkable potential with a 98% quarter-on-quarter surge in net profit during 2Q24, driven by strong sales in the NEV segment and reduced operating expenses. The company is expected to further bolster its value per model (VPM) through premium model launches and overseas expansion in fiscal years 2024-2026. The recommendation is to reiterate an “Add” with a sum-of-the-parts-based target price of HK\$345. -CGS
BRC Asia
The company declared a total dividend of 20 Singapore cents, representing a dividend payout ratio and yield of 59% and 8.4%, respectively. With a robust sales order book and strong fundamentals, BRC Asia remains a promising investment opportunity. Lim & Tan Securities maintain an “Accumulate” rating on BRC Asia, given its attractive 8.4% dividend yield and P/E ratio of 7x. – LimTan
Thai Beverage
The consensus target price for Thai Bev is S\$0.67, indicating a 30.1% upside from its current share price. The company remains focused on its core F&B business, with an emphasis on leveraging F&N. Lim & Tan Securities recommend an “Accumulate” rating for Thai Bev, citing its undemanding valuations. = LimTan
Thai Beverage
In the latest comprehensive report by UOB Kay Hian, Thai Beverage Public Company Limited (THBEV), Thailand’s largest beverage producer, is meticulously analyzed. The report sheds light on the company’s fiscal year 2024 (FY24) performance and offers insights into its future prospects. With a maintained “BUY” recommendation, the report highlights a target price of S\$0.56, indicating a potential upside of 8.7% from its current share price of S\$0.515.
UOB Kay Hian maintains a “BUY” recommendation for Thai Beverage, with a target price of S\$0.56, reflecting a 13x FY25F PE multiple. The stock is considered attractively priced at -1.5 standard deviations from its long-term average mean PE, supported by a projected FY25 dividend yield of 5.1%. -UOBKH
Thank you
