DAILY MORNING NOTE | 16 February 2023

Singapore shares sank for the third straight day this week following a mixed showing on Wall Street, after mildly lower US inflation data signalled that the Federal Reserve (Fed) could stay on its path of elevated rates. The Straits Times Index (STI) fell 37.38 points or 1.1 per cent to 3,280.82 on Wednesday (Feb 15). This showing also followed Finance Minister Lawrence Wong’s Budget 2023 speech the day before. Some 1.3 billion units worth S$1.1 billion were traded on the local bourse. Losers outpaced gainers with 341 counters down and 216 up. Wednesday’s losses were led by Singapore’s banking trio, DBS, UOB and OCBC, as well as Singtel.

Wall Street stocks shrugged off early weakness on Wednesday, finishing with gains after a surprisingly strong January retail sales report. Sales bounced by three per cent last month to US$697.0 billion after two months of contraction, following strong gains in auto sales, department store sales and other categories. The Dow Jones Industrial Average added 0.1 per cent at 34,128.05. The broad-based S&P 500 advanced 0.3 per cent to 4,147.60, while the tech-rich Nasdaq Composite Index jumped 0.9 per cent to 12,070.59. Among individual companies, Airbnb surged 13.4 per cent after reporting better-than-expected profits as it characterised travel demand as “strong.” Devon Energy slumped more than 10 per cent as its earnings lagged estimates.

Top gainers & losers





Marco Polo Marine has reported revenue of $23.7 million for the 1QFY2023 ended Dec 31, 2022, 95.9% higher y-o-y. The higher revenue was attributable to the group’s shipyard and chartering segments’ continuous growth. 1QFY2023 gross profit surged by 153.8% y-o-y or nearly 2.5 times higher to $6.6 million with gross profit margin (GPM) improving by 6.5 percentage points y-o-y to 28.5%. The group says it remains optimistic about its prospects for the year ahead, adding that it expects to see “continued growth” from the rising demand from its end customers for both of its segments.

Singapore Airline‘s group-wide passenger load factor for January reached 86.9 points, up 46.9 points over the year earlier, as recovery continues from the pandemic. SIA as a group carried 2.6 million passengers that month, a slight dip of 2.7% over the preceding peak holiday season of December, but up four-fold over the year earlier. Nonetheless, in the absence of China’s full reopening, SIA’s group-wide passenger capacity in January 2023 was still at 80% of the pre-pandemic levels, similar to the preceding month.

The privatization of Chip Eng Seng will go through, after the offerors secured 90.19% of the shares as at Feb 14. With the 90% threshold crossed, the company’s chairman cum controlling shareholder Celine Tang, who is making the offer with her husband Gordon Tang, can now exercise their right to acquire the remaining shares. As at June 30, Chip Eng Seng’s net asset value was 99.06 cents per share.

COSCO Shipping International is expecting to report a net loss in the FY2022 ended December with a “significant deterioration” in profit during the year. The loss was due to a non-cash impairment of goodwill in connection with the group’s investment in Cogent Holdings Pte. Ltd. (formerly known as Cogent Holdings Limited). Cogent Holdings was compulsorily acquired by COSCO Shipping for $490 million in 2018. The group will release its full results around March 1.

CSE Global warns that its earnings for 2HFY2022 will be “significantly” lower versus both the year earlier’s $4.9 million and the preceding 1HFY2022’s $4.5 million. The engineering company attributes the likely drop in earnings to restructuring costs of $1.3 million, where among other issues, two projects were found to have suffered from cost-overruns. Even so, CSE Global expects to be in the black for the full of FY2022 ended Dec 31 2022. In a separate announcement, CSE Global says it has won new orders of some $220.8 million in 4QFY2022, which brings its total order book to $478 million. It expects to report its FY2022 numbers on or before Feb 27.

Sen Yue Holdings is expecting to report a “commendable net profit” in the FY2022 ended Sept 30, 2022, reversing from its loss after tax of $5.5 million in the FY2021. The group attributed the better performance to the improvement in its business performance as it progresses back to “normalcy” under the helm of its new management. During the 2HFY2022, the group saw a significant increase in revenue for its lithium battery recycling business under its commodities segment. Sen Yue’s results will be released on or before Feb 28.


The U.S. could become unable to pay all of its bills on time sometime between July and September, the nonpartisan Congressional Budget Office estimated, giving lawmakers several months to reach an agreement on lifting the debt limit and avoiding a default. The Treasury Department ran up against the roughly $31.4 trillion debt limit in January. It is now deploying a series of special accounting maneuvers to keep paying the government’s obligations to bondholders, Social Security recipients and others. In its estimate on Wednesday, the CBO said the so-called extraordinary measures could also run out before July if its expectations for tax revenue are off.

U.S. retail sales jumped 3% in January, compared with expectations for a rise of 1.9%, as consumers broadly boosted spending on vehicles, furniture, clothing and dining out, adding to signs that economic growth picked up at the start of the year. The unexpectedly strong January employment report and still solid wage gains bode well for consumer spending, and some economists think economic growth could be picking up. Retail sales grew broadly across the economy in January, including at restaurants, car dealerships, department stores and furniture and appliance sellers.

Tesla will halt some production at its Shanghai factory until the end of February, as it upgrades the facility to start rolling out a revamped version of its Model 3 sedan in the competitive Chinese market. The plant has two phases for vehicle manufacturing, and some workers on the first phase won’t be allowed on production lines from as soon as Sunday (Feb 19) as the work on improving them is undertaken.

Apple has postponed a planned introduction of its first mixed-reality headset from around April to June, according to people familiar with the matter. The iPhone maker is now aiming to unveil the product at its annual Worldwide Developers Conference (WWDC). Apple made the decision to delay the launch earlier this month after product testing showed that both hardware and software issues still needed to be ironed out, they said.

Barclays on Wednesday reported a full-year net profit of £5.023 billion ($6.07 billion) for 2022, beating consensus expectations of £4.95 billion but suffering a 19% fall from the previous year’s restated £6.2 billion in part due to a costly trading blunder in the U.S. Fourth-quarter attributable profit was £1.04 billion, above analyst projections of £833.29 million but down 4% from the £1.08 billion posted in the fourth quarter of 2021. Pretax profit for the fourth quarter came in at £1.31 billion, short of a consensus forecast of £1.5 billion, while full-year pretax profit fell 14% to £7 billion.

Cisco announced fiscal second-quarter results that topped Wall Street expectations. Cisco’s total revenue grew 7% year over year in the quarter, which ended Jan. 28. Net income decreased about 7% to $2.77 billion. The company called for fiscal third-quarter adjusted earnings of 96 cents to 98 cents per share and 11% to 13% revenue growth. Cisco lifted its guidance for the 2023 fiscal year, and now expects $3.73 to $3.78 in adjusted earnings per share and 9% to 10.5% revenue growth. Both numbers are well ahead of analysts’ estimates. But Cisco said its backlog increased year over year. The backlog for both hardware and software is still considerably higher than usual for Cisco because of limited supply availability, said Scott Herren, Cisco’s finance chief.

Roblox reported fourth-quarter earnings that beat analysts’ expectations on top and bottom lines. The revenue figure is what Roblox calls bookings, which include sales recognized during the quarter and deferred revenue. Bookings rose by 17% year over year to $899.4 million. Roblox reported 58.8 million average daily active users, up 19% from a year earlier. The company reported a net loss of $289.9 million for the quarter, which ended Dec. 31, compared to a net loss of $143.3 million for the same period in 2021.

Heineken reported a higher-than-expected 2022 profit on the back of a recovery in beer drinking to pre-pandemic levels. The company said operating profit would grow but at a slower mid- to high-single-digit percentage rate in 2023, reflecting continued cost savings, a challenging economy and lower consumer confidence in some markets. Heineken said its operating profit before one-offs rose by 24.0% to 4.50 billion euros ($4.8 billion) in 2022, compared with an average forecast of 4.43 billion.

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


BRC Asia – Earnings decline 12.2% YoY for 1Q23

Recommendation: Buy (Maintained), Last Done: S$1.84

Target price: S$2.14, Analyst: Terence Chua

– FY23 net profit was below our expectations at 11% of our FY23e forecasts. Earnings were below expectations even as we accounted for a seasonally weaker 1H as margins weighed from the more intense competition in the sector.

– Group to see slower 9M23 from Heightened Safety period extension by another three months till end-May.

– Local construction demand remains robust with the Building and Construction Authority (BCA) projecting total construction demand for 2023 to be between $27-32bn (unchanged from 2022).

– Maintain BUY with a lower target price of $2.14 (prev. $2.30). We trim FY23e earnings by 9.8% as we expect the construction recovery to take longer than expected as it grapples with near-term headwinds. Our TP is lowered to $2.14, still based on 7x FY23e P/E, 15% discount to its 10-year average, on account of the uncertain external environment. Catalysts expected from an end to the Heightened Safety period.

Silverlake Axis Ltd – Earnings dip due to change in revenue mix

Recommendation: Buy (Maintained), Last done: S$0.36

TP: S$0.49, Analyst: Glenn Thum

– 2QFY23 earnings of RM42.1mn were in line with our estimates despite a dip. 1HFY23 earnings were at 48% of our FY23e. The 29% YoY dip in earnings came from a drop in gross profit margin due to the change in revenue mix as lower project-related revenue was slightly offset by higher recurring revenue.

– Project-related revenue comprising software licensing and software project services fell 22% YoY as the progression of actual project delivery varies from quarter to quarter, while recurring revenue rose 7% YoY due to additional contributions from new maintenance contracts that have become operational.

– We maintain BUY with an unchanged target price of S$0.49. Our FY23e estimates remain unchanged. Our FY23e estimates remain unchanged. Our target price is pegged to 20x P/E FY23e. We expect MOBIUS and the recovery in bank IT spending after two cautious pandemic years to be the key growth drivers for the company.

NetLink NBN Trust – Yield not attractive enough

Recommendation: NEUTRAL (Maintained); TP S$0.85, Last close: S$0.89; Analyst Paul Chew

– 9M23 revenue was within expectations but EBITDA exceeded, at 76%/80% of our FY23e forecasts. 3Q23 revenue was up 7% driven by a spike in diversion revenue to S$5.6mn.

– Completion of the regulatory review of fibre prices is expected to be completed by the March quarter. Points of discussion include WACC, allocation of cost by segments and how much of the recent spike in interest rates and inflation should be considered.

– Our base case is that fibre rates will be nudged marginally lower. Any impact on dividends is muted due to the ability to raise borrowings. Our FY23e EBITDA is raised by 5%, from higher diversion revenue and more stable staff and other operating expenses. Our NEUTRAL recommendation and DCF target price of S$0.85 is maintained. We find the dividend yield of 6% less attractive, especially with limited growth in dividends and headwinds from rising interest expense.

PayPal Holdings Inc – Accelerated cost reductions​

Recommendation: BUY (Maintained); TP: US$103.00

Analyst: Ambrish Shah

– 4Q22 results were in line with expectations. FY22 revenue/PATMI was at 100% of our forecasts. In 4Q22, revenue grew 7% YoY driven by total payment volume of US$357.4bn (up 9% YoY in constant currency). PATMI rose 15% YoY (7% normalized) on accelerated cost reductions.

– Payment transactions per active account set a new high at 51.4x on an annualized basis. 2.9mn net new active accounts were added in 4Q22, taking the total to 435mn.

– We maintain a BUY recommendation with a lower DCF target price of US$103 (WACC 7%, g 4%), down from US$110. Our FY23e revenue is lowered 2% as consumers are cutting back on discretionary spending; while we have increased our PATMI by 4% due to lower operating expenses. PayPal enjoys long-term tailwinds from two-sided network effects, secular shift to electronic payments, as well as rolling out Venmo payment option on Amazon.

PSR Stocks Coverage



For more information, please visit:


Upcoming Webinars

Guest Presentation by Paragon REIT [NEW]

Date: 17 February 2023

Time: 12pm – 1pm

Register: https://bit.ly/3ZNn4W0

Guest Presentation by Keppel DC REIT [NEW]

Date: 17 February 2023

Time: 3pm – 4pm

Register: https://bit.ly/3CYgrGr

Guest Presentation by First REIT Management Limited [NEW]

Date: 23 February 2023

Time: 12pm – 1pm

Register: https://bit.ly/3GY2tp8

POEMS Podcast:

Research Videos

Weekly Market Outlook: Alphabet Inc, Amazon Inc, SGX, Starhub Ltd, Tech Analysis & More
Date: 13 February 2023
Click here for more on Market Outlook.
Sign up for our webinars here, and be among the first to receive economy and market updates.


Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
Click here for more on Phillip in 3 mins.

Follow our Socials

Facebook Social Icon Instagram Icon Twitter Social Icon Youtube Social Icon Linkedin Social Icon TikTok Social Icon Spotify Social Icon

Join our Singapore Equity Research Community on POEMS Mobile 3 App for the latest research reports, market updates, insights and more

Click to join!


The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.

Confidentiality Note

This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com