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UOB KAYHIAN |
UOB KAYHIAN |
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City Developments (CIT SP) One Beach Down, Many Debts To Go
CDL’s sale of its 50.1% stake in the 99-year leasehold South Beach development for S$834m unlocked S$465m in disposal gains. Assuming that the sale had been completed at end-24, net gearing would have improved from 117% to 103%. However, CDL’s balance sheet will remain burdened by high interest costs and debts for 2025. Further capital recycling efforts to deleverage and a more consistent execution of this strategy are needed to re-rate the stock. Maintain HOLD. Target price: S$4.60.
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Xiaomi Corp (1810 HK) Takeaways From Investor Day And Greater Bay Auto Show
We attended both Xiaomi’s investor day and the Greater Bay Auto Show 2025. During the investor day, Xiaomi provided some solid colours for its overall business and key segments, including top-/bottom line growths of 30%/40% yoy respectively. At the auto show, Xiaomi showcased its latest YU7 SUV model, which attracted significant attention from attendees eager to check out the latest release in person. Maintain BUY; keep target price at HK$69.90.
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UOB KAYHIAN |
LIM & TAN |
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IOI Corporation (IOI MK)
Turning More Optimistic On Its Recovery Path
We recently hosted a virtual investors’ call with IOI following its 3QFY25 results release. Key takeaways include management’s more optimistic view on its production outlook as well as refining margin trends. Its accelerated replanting programme undertaken in recent years is also expected to bear fruit in 2-3 years’ time, underpinning its longerterm production growth profile. Maintain HOLD on IOI with unchanged target price of RM3.55.
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City Developments Limited ($4.99, up 12 cents) and IOI Properties Group Berhad (IOIPG) have entered into a share sale agreement for their joint venture (JV) South Beach mixed-use integrated development. Under this agreement, IOIPG will acquire CDL’s 50.1% interest in the development, based on an agreed property value of S$2.75 billion on a 100% interest basis, which represents an approximately 3.0% premium over the latest valuation of S$2.67 billion as of 31 December 2024. The transaction will be executed via a share sale in the holding company Scottsdale Properties Pte. Ltd.. Based on CDL’s proportionate 50.1% share of its consolidated net assets as of 30 April 2025, the estimated sale consideration is S$834.2 million. CDL’s market cap stands at $4.5bln and currently trades at 0.5x PB with a dividend yield of 2%. Consensus target price stands at S$5.91, representing 18.4% upside from the current share price. In view of cheap valuations and their declared RNAV of S$17.57 vs current share price of S$4.99, coupled with the fact that CDL is embarking on monetization efforts to unlock shareholder value, we thus continue recommend an “Accumulate” rating on CDL. |
| LIM & TAN | MAYBANK KIM ENG |
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The Board of Directors (the “Board”) of Grand Venture Technology Limited ($0.935, up 0.005) wishes to provide a voluntary update on the Group’s business and financial performance for the three months ended 31 March 2025 (“1Q25”). The comparative financial quarter was for the three months ended 31 March 2024 (“1Q24”). On the back of a 44.8% year-on-year increase in revenue to S$44.6 million, from S$30.8 million in 1Q24, the Group recorded a 29.0% rise in EBITDA to S$8.4 million, and 27.7% growth in net profit after tax to S$2.6 million. These improvements were driven by continued wallet share expansion with its key customers. Gross profit margin was relatively stable in 1Q25, with continued ongoing absorption of expanded capacities and capabilities in preparation for future growth. EBITDA in 1Q25 had included a foreign exchange loss of S$0.4 million, whilst EBITDA in 1Q24 had included a foreign exchange gain of S$0.5 million. Adjusting against the foreign exchange gain/loss, EBITDA margins in 1Q25 and 1Q24 were 19.7% and 19.2% respectively. At 93.5 cents, Grand Venture Tech is capitalized at $317mln and despite its expected 25% growth for 2025, forward PE is around 23x which seems fair relative to its growth potential. Price to book is 2.4x while dividend yield is around 1%. While the company announced that there could be a potential deal on the company with major shareholders in negotiations with a 3rd party in relation to their stake, we think that valuations are fair and recommend minority shareholders to “HOLD” onto Grand Venture Tech.
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Malaysia Oil & Gas Softer offshore activities ahead
Downgrade Malaysia O&G to NEUTRAL With lower oil majors’ capex and OPEC’s policies in 2025E possibly affecting Malaysian OGSE players, coupled with softer outlook displayed by oil & gas companies during the recent 1QCY25 results, we downgrade the Malaysia O&G sector to NEUTRAL (from POSITIVE). Local OGSE players could see lower offshore activities and jobs for the respective segmental service providers. Our Brent crude oil price assumption was lowered to USD67/bbl for 2025E (from USD70/bbl on 6 May 2025 [link]). During the recent results season, we downgraded MISC (TP: MYR8.26) and Wasco to HOLD (TP: MYR0.99). Our top BUYs are unchanged – Dialog (TP: MYR2.34) and BArmada (TP: MYR0.73).
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