DAILY MORNING NOTE | 14 March 2024

Trades Initiated in the past week

Factsheets


Singapore shares ended higher on Wednesday (Mar 13), tracking overnight gains on Wall Street, even as US inflation data came in slightly higher than expected. The benchmark rose 0.6 per cent or 19.25 points to close at 3,160.72.

Wall Street stocks largely closed lower on Wednesday, with the broad-based S&P 500 index retreating from a record and investors eyeing key economic indicators ahead. The tech-heavy Nasdaq Composite Index slumped 0.5 per cent to 16,177.77, while the S&P slipped 0.2 per cent to 5,165.31. But the Dow Jones Industrial Average eked out a gain of 0.1 per cent to 39,043.32.

Top gainers & losers

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Events Of The Week

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SG

Changi Airport passenger movements came in at around 5.3 million in February, 4.3 per cent higher than pre-pandemic levels for the month, statistics from Changi Airport Group (CAG) released on Wednesday (Mar 13) showed.

Singtel requested a trading halt on Wednesday (Mar 13) afternoon shortly after reported that the telecommunications giant was in advanced discussions to sell Optus to Canadian private equity firm Brookfield.

Hong Kong carrier Cathay Pacific on Wednesday (Mar 13) reported its first annual net profit in four years, citing “significant pent-up demand for travel” following the pandemic. The airline said profit surged to US$1.25 billion last year, compared with a loss of US$847 million in 2022, after hitting its target of operating at 70 per cent of pre-pandemic passenger flights during the 12 months.

Country Garden Holdings missed a coupon payment on a yuan bond for the first time, according to sources familiar with the matter, adding to the woes of the Chinese developer that is now facing a lawsuit seeking its liquidation offshore. The builder’s main onshore unit has not paid a 96 million yuan (S$18.2 million) coupon that came due on Tuesday (Mar 12) for a 4.8 per cent yuan bond maturing in 2026.

Seatrium has received in-principle approval from the Singapore Exchange (SGX) regarding its proposed 20-for-1 share consolidation exercise. This concerns the listing of and quotation for up to 3.4 billion consolidated shares on the mainboard.


US

Shell will eliminate at least 20 per cent of jobs in its deals team as the company continues to restructure its business units in an effort to reduce costs, according to people with knowledge of the matter.

German sportswear giant Adidas posted its first annual loss in more than 30 years on Wednesday (Mar 13) and warned sales in North America would fall again as sportswear retailers in the US battle high inventories.

Private equity firm KKR & Co will invest US$400 million in telecoms tower operations and expansion in the Philippines, the United States Department of Commerce said on Wednesday (Mar 13), among a slew of deals in a US$1 billion investment announced in a landmark trade mission.

Reddit is telling potential investors in its initial public offering (IPO) that it expects revenue in 2024 to grow by more than 20 per cent versus the previous year, according to a source familiar with the situation.

Goldman Sachs Asset Management (GSAM) will resume “actively investing” in US commercial real estate this year because the market is bottoming out, the co-head of its real estate business said on Wednesday (Mar 13).

Saudi Arabia has attracted about US$13 billion in private sector investment into its tourism industry as it aims to share the cost of spending associated with its plan to become a new travel hot spot.

Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR


RESEARCH REPORTS

Hyphens Pharma International – More visible growth drivers

Recommendation: BUY (Maintained); TP S$0.35 Last close: S$0.28; Analyst Paul Chew

– 2023 results beat expectations. Both revenue and PATMI were 106% of our forecast. Other markets, such as Indonesia and the Philippines, grew faster than expected due to the maiden contribution from Laboratoires Gilbert S.A.S exports.

– Revenue in 2H23 was a record S$96mn following a 27% YoY jump in specialty pharma to S$60mn. However, margins declined from higher distribution costs.

– We expect earnings to recover as the supply chain for specialty products from Europe normalises. Other growth drivers for Hyphens include aggressively expanding the number of principals for its specialty products, exporting to new markets, and SKU extensions of its proprietary brands. Additional costs by DocMed are also at a more gradual pace. Our BUY recommendation and DCF target price of S$0.35 is maintained.


Factsheets

Factsheets


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