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CGS CIMB |
CGS CIMB |
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Ind Goods & Services Divestment gains to drive profits; more action in the pipeline
■ We rank KEP as the top earnings performer for the sector in 1H25F due to divestment gains and stronger asset management. ■ We rank SATS as the next stock back in focus among the Temasek-linked group, with its firm market share in global cargo. ■ We keep our Overweight recommendation on the sector, with KEP and SATS among our country top picks given the upside to our TPs. ■ Downside risks for the sector: global recessionary macro environment, slower than expected order win or cost overrun .
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Sembcorp Industries 1H25F to be boosted by divestment gains
■ We lift our TP for SCI to S$8.54, now based on 13x CY26F P/E, closer to the MSCI SG trading index, as well as regional peers’ valuations. ■ We expect SCI’s 1H25F reported profit of c.S$664m, with divestment gains from SembEnviro. Core net profit to be c.S$566m. ■ Re-rating catalysts come from stronger-than-expected profit growth from gas and related services. Maintain Add.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Food Empire Holdings (FEH SP) Expect Healthy Growth And Outlook; Raise Target Price By 22% To S$2.40
We expect FEH to deliver 1H25 core earnings of S$27m (+14% yoy). Positive stock drivers include: a) FEH’s optimistic outlook in 1Q25 and our confidence in its moat from its strong brand equity; b) the expansion of four new manufacturing facilities in Malaysia, Kazakhstan, Vietnam and India up to 2028 will drive growth; and c) the supplemental agreement for REN will eliminate earnings volatility from 3Q25 onwards. Maintain BUY with a 22% higher target price of S$2.40.
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CSE Global (CSE SP) Beneficiary of Trump’s AI and energy investments
Maintain BUY with a TP of SGD0.70 Trump announced a USD70bn investment in AI and energy, including new data centres, power generation expansion and grid infrastructure upgrades, which benefit CSE directly. We believe CSE is gaining good traction with one of the largest data centre players in the US and is in the midst of qualifying for another 1-2 major customers. CSE is also wellplaced to be one of the key beneficiaries of the Monetary Authority of Singapore’s (MAS) SGD5bn investment program. Maintain BUY.
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| MAYBANK KIM ENG | LIM & TAN |
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Malaysia Construction Data centre jobs galore to be awarded soon
Maintain POSITIVE – Top pick still GAM Despite the prospect of the United States restricting the shipment of AI chips to Malaysia, we understand that ECW, SDPR and Pearl Computing will award 4 data centre (DC) jobs totalling c.500MW over the next 2 months. We estimate that they will yield c.MYR10b of jobs and believe that they will be awarded to >1 winner. GAM, our top pick would be a winner, in our view. A year after works begin, we expect MEP subcontracting works to be awarded, to which MNHLDG is well positioned to be a beneficiary.
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Frasers Logistics and Commercial Trust / FLCT ($0.855, up 0.5 cts) is pleased to announce that FLCT, through its indirectly wholly-owned subtrust Collins Street Landholding Trust (the “Vendor”), has entered into a sale and purchase agreement with, among others, an unrelated thirdparty purchaser for the sale of the commercial property at 357 Collins Street, Melbourne, Victoria, Australia (“357 Collins Street”) for a sale price of A$195.3 million (approximately S$164.1 million). FLCT’s market cap stands at S$3.2bln and currently trades at 0.8x PB and 7.0% yield. The non-core office building divestment is in-line with FLCT’s aim to have a greater portfolio allocation toward high-quality logistics and industrial properties. Consensus target price stands at S$1.00, representing 16.3% upside from current share price. We continue to have an Accumulate rating on FLCT given its attractive stable dividend yields coupled with healthy gearing. |
