|
UOB KAYHIAN |
UOB KAYHIAN |
|
SATS (SATS SP) Tariff War Posing Significant Uncertainties To Global Trade
The escalating tariff war poses significant uncertainties for the global trade outlook in the medium term. SATS, due to its significant 50%/25% revenue exposure to the global/US air cargo handling business, is poised to be negatively impacted by a potential setback in globalisation and decline in global trade volume. We tentatively cut our FY26-27 air cargo volume projections for SATS by 5%, and lower our earnings projections by 17-18%. Downgrade SATS to HOLD. Target price: S$2.89.
|
SECTOR UPDATE REITs – Singapore Data Centre
REITs – Reasoning AI Models Usher In The Next Wave Of Demand Reasoning AI models consume over 100 times more resources vs conventional AI models. The advent of new Reasoning AI models, including OpenAI GPT-5, will drive the next wave of demand for data centres. Demand for data centres is correlated to new product cycles, rather than import tariffs. BUY KDCREIT (Target: S$2.55) as SGP7 and SGP8 have started to contribute in 1Q25. BUY DCREIT (Target: US$0.88) and MINT (Target: S$2.70) for exposure to the US market. Maintain OVERWEIGHT.
|
|
UOB KAYHIAN |
CGS CIMB |
|
SECTOR UPDATE Plantation – Malaysia
Production Starts To Pick Up In Mar 25 MPOB’s Mar 25 data reported a recovery in production, but end stock came in lower due to higher domestic usage while exports remained flat. On the other hand, companies’ production trend remains the key focus ahead of the peak season whereas geopolitical tension due to the US tariffs could pose risks to the sector, although we see limited direct impact. Our BUY recommendations are Hap Seng Plantations (HAPL MK/BUY) and SD Guthrie (SDG MK/BUY). Maintain MARKET WEIGHT.
|
ASEAN Strategy Bounce back list but keep some ammunition
■ The crucial element of confidence is still lacking despite a broad base rebound over the past 1 day. One should still exercise caution. ■ Based on EPS growth, currency and political stability, market valuations and dividend yield, we rank SG ahead of Malaysia; Thailand ahead of Indonesia. ■ We list 22 names across ASEAN markets that have reached compelling buy levels, albeit risks remain in the next 90 days as tariffs flip flop. ■ MISC, DLG, GENS, CIT, PTTEP, HANA stand out as they are trading below GFC and Covid-19 trough P/BV valuations.
|
| MAYBANK KIM ENG | LIM & TAN |
Grab Holdings (GRAB US)GrabX Inaugural Event: Key takeawaysAI to improve efficiency, user experience and operations. Grab maintains growth guidance; BUYGrab hosted its first-ever annual product launch event, Grab X, on 8 Apr’25. The CEO and Chief Product Officer presented at the event. Key highlights are its AI initiatives aimed at generating scalability and operating efficiency while improving consumer experience, enabling Grab usage for all kinds of users. Grab launched AI initiatives for merchant operations, driver efficiency and elevating user experiences, enabled by the deepening of partnerships with OpenAI and a new collaboration with Antrophic, 2 of the world’s leading AI developers. Grab maintains its FY25 revenue growth guidance at 19-22% YoY and for some cost-savings to be passed down to consumers and partners, reiterating its goal of achieving organic growth by improving customer retention (details on pages 2-3). Maintain BUY on Grab. Our TP of USD5.75 is based on an SoTP valuation.
|
Capitaland Investment / CLI ($2.50, up 10 cent) announced that The Ascott Limited (Ascott), the lodging business unit wholly owned by CapitaLand Investment (CLI), plans to double its portfolio in India to 12,000 units by 2028, up from about 5,500 units at the end of 2024. CLI’s market cap stands at S$12.5bln and currently trades at 17.2x forward PE and 0.9x PB, with a dividend yield of 4.8%. Consensus target price stands at S$3.48, representing 39.2% upside from current share price. We like CLI for it’s diversifed portfolio and in view of lower interest rates in FY25, we recommend a longer term “ACCUMULATE on Weakness” on CLI. |
