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UOB KAYHIAN |
UOB KAYHIAN |
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Strategy – SMID Cap Outlook SMID Cap Retail Webinar Takeaways
Highlights • The SMID-cap retail webinar on 11 Jun 26 garnered interest from over 180 retail investors. • Key questions focused on buying opportunities, sector valuations (especially tech and IPOs), and catalysts for individual stocks • We highlighted BKM, HUAGL, VALUE & FEH as our top SMID-cap picks.
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Mr. DIY (MRDIY MK) Screwing Down Costs; Building Up Yield
Highlights • Recent SSSG appears to have stabilised, aided by price-lock traction and low base, while margins remain above last year. • Forex tailwinds support margins, though the recent MYR/RMB weakness is only a consideration for 2027 earnings risk given Mr. DIY’s five-month inventory levels. • Maintain BUY with an unchanged target price of RM2.30. Mr. DIY offers a yield of 5.6-6.3% for 2026-28.
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| CGS INTERNATIONAL | MAYBANK SECURITIES |
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Internet Services Sales growth during 618 in line with our expectations
■ According to Syntun data, total online e-commerce sales reached Rmb934bn during this year’s 618, up 4.0% yoy, in line with our expectations. ■ During the event, major platforms abandoned complicated bundled purchases; AI technology integration stood out as the core highlight. ■ Although the overall cosmetics sales were weak during this year’s 618, Maogeping performed well with its ranking improving from 2025’s No.2 to No.1 on Douyin. ■ We reiterate Overweight on China’s Internet services sector as we expect re-rating from AI-driven efficiency gains; top picks: Tencent, Alibaba, followed by JD.com.
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Singapore Telecommunications (ST SP) More fuel for capital returns and growth investments
Gulf stake sale strengthens capital-return visibility ST sold a 2.8% stake in Thai-listed Gulf Development for c.SGD1b, executed close to THB60/sh, a ~5% discount to Gulf’s 1-mth trading average. We understand there are no tax implications from the transaction. Post-sale, Singtel retains a 4.95% stake in Gulf which could potentially be monetised over time given it is non-strategic in nature. Including this transaction, we estimate Singtel’s FY27 FCF plus capitalrecycling proceeds at c.SGD3.0b, significantly bridging the c.SGD3.2b dividend requirement implied by our SGD19.3c DPS est. Importantly, a meaningful part of FY27 growth capex is also to be funded by customer advances and private capital. We therefore see Singtel as well placed to sustain elevated capital management, implying a c.4.5% dividend yield plus SGD2b of share buybacks with 34% already executed. Maintain BUY.
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| CGS INTERNATIONAL | |
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Consequences of liquidity slush
◼ Easing oil prices suggest the global market is leaning into the ‘worst is over’ narrative when it comes to the Middle East (ME) crisis. However, the outperformance of large-cap stocks against small-mid cap stocks in Singapore, with preference for beta over alpha, suggests investors’ confidence has yet to return.
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