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UOB KAYHIAN |
UOB KAYHIAN |
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Singapore Telecommunications (ST SP) On Track To Continue Driving Shareholder Value
In line with Singtel’s ST28 growth plan, its value-unlocking initiatives remain on track which we reckon would come from paring down stakes in its regional associates and non-core fixed assets, likely leading to higher VRDs in the next 3-5 years. The group continues to improve its ROIC through better core operational performance while also doubling down on its future growth drivers, NCS and Nxera. In view of a decent dividend yield of 5.2%, we maintain BUY with the same target price of S$3.58.
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Singapore Telecommunications (ST SP) On Track To Continue Driving Shareholder Value
In line with Singtel’s ST28 growth plan, its value-unlocking initiatives remain on track which we reckon would come from paring down stakes in its regional associates and non-core fixed assets, likely leading to higher VRDs in the next 3-5 years. The group continues to improve its ROIC through better core operational performance while also doubling down on its future growth drivers, NCS and Nxera. In view of a decent dividend yield of 5.2%, we maintain BUY with the same target price of S$3.58.
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CGS CIMB |
MAYBANK KIM ENG |
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Seatrium Ltd Sequential improvement likely on track
■ We update our model to reflect STM’s latest win of BP’s Kaskida FPU in Dec 24 as well as lapse of Golar Gandria conversion contract. ■ We estimate STM had closed FY24F with c.S$14.4bn of order wins with order book at S$25bn. We keep our S$6bn order win target intact for 2025. ■ We project 2H24F gross margin (GM) to improve to c.7.% (1H24: 3.7%) as STM nears completion of onerous loss-making projects. ■ Our new, rolled forward TP of S$2.90 is still based on 1.5x CY25F P/BV (10- year average trading band). Maintain Add on order pipeline, GM expansion.
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CSE Global (CSE SP) Drill baby drill
Maintain BUY with an unchanged TP of SGD0.64 President-elect Trump vowed to declare a national energy emergency as soon as he takes office and slash electric and gasoline prices in the first year of his administration. He will approve new drilling, pipelines, refineries, power plants, reactors and also plans to slash red tape. We believe this is positive for CSE as the number of O&G related projects available will rise after a lukewarm past few years, resulting in CSE pivoting to electrification previously. With all 3 engines firing now, we believe CSE’s prospects are more positive than ever. Retain BUY rating our TP of SGD0.64 based on 13x FY25 P/E.
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| MAYBANK KIM ENG | LIM & TAN |
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Malaysia Renewable Energy A year of growth and opportunities
LSS PETRA 5+ bidding opens In a significant move to accelerate renewable energy (RE) generation, the Energy Commission (EC) has launched an open bidding process for the development of an additional 2GW capacity of large scale solar (LSS) in Peninsular Malaysia under the LSS PETRA 5+ programme. The projects, which range from 10MW to 500MW each, are slated for operational commencement in 2027. Among the RE-focused companies under our coverage, we have a BUY rating on Solarvest. In the broader utilities space, we have a BUY on Mega First (MFCB MK, CP: MYR4.53, BUY, TP: MYR4.80).
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PT Sembcorp Renewables Indonesia, a wholly-owned subsidiary of Sembcorp Industries / SCI ($5.66, up 0.03) and PT PLN Nusantara Renewables, a 99%-owned subsidiary of PT PLN Nusantara Power, today launched the Nusantara Sembcorp Solar Energi (NSSE) Power Plant. The NSSE Power Plant, built on approximately 87 hectares of land, is the first utility scale integrated solar and energy storage project in Nusantara, Indonesia. SCI is at the forefront of Singapore’s push towards renewable energy and sustainable initiatives, targeting to go into net zero emission standards by 2030. We maintain our “Accumulate” rating on SCI given its undemanding forward PE of 10x and consensus 1 year target price of $6.80, implying an upside potential of 20% from current levels. We see scarcity premium in SCI given high demand from institutions for “Green/Sustainable” investing themes. |
