Singtel
With a market cap of $52bln, Singtel trades at 19x PE, 5-6% yield and based on Bloomberg 1 year upside potential of 20% to $3.80, we maintain our Accumulate recommendation as yesterday’ drop was due to ex-div of 9 cents and provides another opportunity to add more Singtel. -LTS
CLI
CLI’s market cap stands at S$14.1bln and currently trades at 20x forward PE and 1x PB, with a dividend yield of 4.5%. Our target price stands at S$3.55, representing 25.4% upside from current share price. We continue to like CLI for it’s successful efforts to grow it’s stable recurring income streams and maintain sustainable dividends. In view of a even more asset-light strategy amidst a lower interest rate environment and continued share buybacks, we maintain our BUY recommendation on CLI – LTS
Reits
Three out of 20 S-REITs under our coverage beat our expectations, namely DCREIT (successfully backfilled two LA data centres), KDCREIT (positive reversion of >40% for a major colocation contract in Singapore) and FEHT (benefitting from a surge in Chinese tourists). Many blue-chip S-REITs are trading at attractive yields of 6-7% after the recent correction. Maintain OVERWEIGHT. BUY DCREIT (Target: US$0.95), FCT (Target: S$2.79), LREIT (Target: S$0.77) and MINT (Target: S$3.05) – UOBKH
Sime Darby Property
Sime Darby Property: Exceeding Expectations
Sime Darby Property reported a core net profit of MYR133 million for the third quarter of 2024, surpassing both analysts’ and market expectations. Despite an 11% year-over-year decline and a 16% quarter-over-quarter decrease, the results were still 5% above projections. The company’s nine-month locked-in property sales reached MYR3.2 billion, also exceeding expectations.
Financial Performance and Sales
The company has shown a solid performance with a 3Q24 core net profit of MYR132.6 million. This performance lifted the nine-month core net profit to MYR413.9 million, showing a 50% increase year-over-year. The better-than-expected earnings were driven by stronger operating margins, which counterbalanced losses from its 40%-owned Battersea Power Station project.
Sales Goals and Strategy
SDPR is on track to exceed its FY24 sales goal, with MYR3.2 billion in locked-in property sales, representing 91% of SDPR’s and 88% of the projected sales goal for the fiscal year. The sales mix comprises 32% industrial projects, 30% high-rise properties, 20% landed, and 14% commercial properties. With secured total bookings of MYR1.9 billion as of October 2024, the company is poised to surpass its sales assumptions. – Maybank
SD Guthrie
The core PATMI stood at MYR401 million, reflecting a 9% year-over-year decrease and stable quarter-on-quarter performance. The nine-month cumulative core earnings reached MYR1,027 million, marking a 41% increase from the previous year, fulfilling 72%-74% of the fiscal year 2024 estimates. These figures indicate that higher-than-expected tax expenses impacted SD Guthrie’s profitability, as core earnings could have been higher otherwise.
Upstream Performance
During the third quarter, SD Guthrie’s upstream earnings before interest and taxes (EBIT) improved to MYR646 million, an 18% year-over-year and 52% quarter-on-quarter growth. This was driven by better-than-expected crude palm oil (CPO) and palm kernel (PK) average selling prices (ASPs), which compensated for weaker fresh fruit bunch (FFB) output due to poor harvests in Indonesia and Papua New Guinea. Despite these challenges, the nine-month FFB output increased by 2% year-over-year. – Maybank
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