Maybank Research’s Comprehensive Market Analysis and Recommendations
Date: 16 December 2024
Broker: Maybank Research Pte Ltd
As the year 2024 comes to a close, Maybank Research Pte Ltd offers an in-depth look into the unexpected twists that have defined the financial landscape, particularly in Singapore and the surrounding regions. Here’s a comprehensive breakdown of the key players and sectors driving market dynamics, alongside the strategic recommendations by Maybank’s analysts.
Singapore Strategy: Reflections on 2024
The year 2024 was marked by unexpected developments becoming the norm. Three cardinal themes emerged, potentially shaping medium-term earnings: early AI-use cases, resurgence in laggard sectors with structural growth, and the restructuring momentum by S-REITs and industrials. These themes are projected to bolster income and margin enhancements moving forward. Key beneficiaries identified are CDLHT, CICT, DBS, GRAB, MLT, Marco Polo Marine, SCI, Sea, Thomson Medical, and UOB.
CDL Hospitality Trusts (CDLHT)
CDLHT has been spotlighted as a key winner due to its strategic positioning in the hospitality sector, benefiting from the tourism rebound and AI integration in service delivery.
CapitaLand Integrated Commercial Trust (CICT)
CICT’s strategic asset portfolio and restructuring efforts are expected to leverage structural shifts in the real estate market, ensuring sustained growth and profitability.
DBS Bank
DBS is anticipated to capitalize on resilient macroeconomic conditions and AI-driven financial services, enhancing its competitive edge and profitability in the banking sector.
Grab Holdings (GRAB)
With early AI-use cases propelling its service offerings, Grab is positioned to make significant gains in the tech and transport sectors.
Mapletree Logistics Trust (MLT)
MLT is strategically poised to benefit from the revival of lagging sectors and AI-driven logistics solutions, promising robust returns.
Marco Polo Marine
The company is expected to ride the wave of restructuring momentum, aligning its operations with emerging market trends for optimal growth.
Sembcorp Industries (SCI)
Sembcorp’s proactive steps in ASEAN power integration and renewable energy are set to secure its leadership in the energy transition, warranting a ‘BUY’ recommendation with a target price of SGD6.20.
Sea Limited (SE)
Sea is expected to leverage AI advancements for growth in e-commerce and digital entertainment, maintaining its market leadership.
Thomson Medical Group (TMG)
Thomson Medical is highlighted for its strategic initiatives in healthcare services, poised for growth as the sector rebounds.
United Overseas Bank (UOB)
UOB is set to benefit from resilient economic conditions and strategic banking innovations, ensuring robust financial performance.
Sembcorp Industries: ASEAN Power Integration
Sembcorp Industries has taken significant steps towards ASEAN power integration, agreeing to import 50MW of renewable energy from Malaysia’s Tenaga. This initiative, though not materially impactful on earnings, marks a positive stride towards energy transition. Consequently, the company’s FY25/26 revenue for gas and renewable energy is slightly adjusted, with a revised target price of SGD6.20, maintaining a ‘BUY’ stance.
Malaysia Gloves Sector: A High Stakes Year
The Malaysian glove sector is navigating a recovery phase, driven by inventory replenishment and potential benefits from increased US tariffs on China-made gloves. While the sector faces risks from Chinese competitors, Maybank has downgraded the sector to ‘NEUTRAL’ following a share price rally. Key recommendations include maintaining a ‘BUY’ on Hartalega (HART) and downgrading Kossan Rubber Industries (KRI) to ‘HOLD’ and Top Glove (TOPG) to ‘SELL’.
Eco World Development: Surpassing Promises
Eco World Development exceeded expectations with its 4QFY24 core net profit and FY24 property sales. Despite setting a conservative FY25 sales target, the company is expected to benefit from higher data center developments. The target price is adjusted to MYR2.25, with a ‘BUY’ recommendation reiterated.
BDO Unibank: Sustained Growth
BDO Unibank continues to outperform, with sustained loan growth and high return on equity (ROE). The target price is increased to PHP200, reflecting easing net interest margin pressures. The bank remains a top pick in the Philippine financial sector, with an 8% increase in FY25E net income forecast.
Gamuda: In-Line Performance
Gamuda’s 1QFY25 core net profit met expectations, signaling stable performance with anticipated earnings growth in subsequent quarters. With a revised target price of MYR10.50, the recommendation is to ‘BUY’.
Upcoming Initiatives and Market Outlook
The report also highlights upcoming events, including the Singapore Market Outlook and Feng Shui event on January 18, 2025. Additionally, the ASEAN macroeconomic forecast for 2025 suggests resilience amidst global trade uncertainties, with ASEAN-6 GDP growth projected at 4.7%.
Maybank Research’s comprehensive analysis provides a detailed overview of key companies and sectors, offering strategic insights and recommendations to navigate the evolving market landscape. As 2024 concludes, investors are encouraged to consider these insights for informed decision-making in the coming year.
