DAILY MORNING NOTE | 25 January 2024

Trade of the Day

LHN Ltd (SGX: 41O)

(Current Price: S$0.345) – TECHNICAL BUY
Buy stop: S$0.350 Stop loss: S$0.330 (-5.71%)
Take profit 1: S$0.375 (+7.14%) Take profit 2: S$0.395 (+12.86%)

Factsheets


Samudera Shipping Line Ltd (SGX: S56)

Analyst: Zane Aw

(Current Price: S$0.740) – TECHNICAL BUY
Buy price: S$0.740 Stop loss: S$0.705 (-4.73%)
Take profit 1: S$0.785 (+6.08%) Take profit 2: S$0.840 (+13.51%)

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Trades Initiated in the past week

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Singapore shares closed higher on Wednesday (Jan 24), reversing a losing streak since the start of the week. Benchmark index rose 0.6 per cent or 18.08 points to end at 3,153.33. Across the broader market, advancers outnumbered decliners 343 to 206, after 1.7 billion securities worth S$938.1 million changed hands.

Wall Street stocks mostly rose Wednesday (Jan 24), lifting the S&P 500 to a fresh record following strong Netflix results and data suggesting United States economic health. The broad-based S&P 500 added 0.1 per cent at 4,868.55, logging a third straight record. The Dow Jones Industrial Average declined 0.3 per cent to 37,806.52, while the tech-rich Nasdaq Composite Index gained 0.4 per cent to 15,481.92.

Top gainers & losers

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Events Of The Week

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SG

Mapletree Logistics Trust’s DPU rose 1.2 per cent to S$0.02253 for its third quarter ended Dec 31, 2023, underpinned by a resilient portfolio, contributions from acquisitions and divestment gains. The latest DPU is up from the S$0.02227 from the same period a year ago, said the trust manager on Wednesday (Jan 24). Gross revenue for the quarter went up 2.1 per cent to S$184 million, mainly due to higher contribution from existing properties in Singapore and contribution from acquisitions in Japan, South Korea and Australia, which were completed in the first quarter of FY 2023/24.

SGTech on Wednesday (Jan 24) launched a job and skills guide to help small and medium enterprises (SMEs) better leverage generative artificial intelligence (GenAI) in their business. The guide, which was done in partnership with SkillsFuture Singapore and AI Singapore, covers the use of GenAI in business solutions, technology talent profiles and GenAI skills required for employees.

THE manager of EC World Real Estate Investment Trust said that its property manager in China bypassed internal processes to lend seals and documents to the sponsor, Forchn Holdings, for illegal mortgage applications. On Jan 2, the Reit manager revealed the three mortgages over its Chinese properties: Hengde Logistics, Fuzhou E-Commerce and Fu Heng Warehouse. It said on Jan 18 that one of the three mortgages had been discharged, and that the sponsor was working on solutions to discharge the remaining two mortgages.

ComfortDelGro’s joint venture (JV) with British transport group Go-Ahead obtained a contract to operate and maintain the Stockholm Metro. The 11-year contract, with operations starting in May 2025, will be the transport group’s first rail contract in Sweden and its largest rail passenger operation outside Singapore, it said on Wednesday (Jan 24).

The Infocomm Media Development Authority (IMDA) has set aside S$30 million to push for research and innovation in green computing, it announced on Wednesday (Jan 24). Under the effort, called the Green Computing Funding Initiative (GCFI), researchers from institutes of higher learning can collaborate with industry players to maximise the energy efficiency of computing infrastructure and software.


US

Ford Motor said Wednesday (Jan 24) it was recalling 2.24 million older Explorer sport utility vehicles worldwide because trim retention clips may not be properly engaged. The recall includes 1.89 million SUVs in the US and covers 2011 through 2019 model year vehicles because the trim could detach, said the National Highway Traffic Safety Administration (NHTSA) on Wednesday.

Microsoft achieved a historic US$3 trillion market valuation on Wednesday (Jan 24), in the latest example of how optimism over artificial intelligence has fuelled a seemingly unstoppable advance in the software giant.

ASML shares closed at 775.80 euros in Amsterdam, a 9.7 per cent rise that took the company’s market capitalisation above 300 billion euros ($327 billion) for the first time. Net profit rose 9 per cent to 2.0 billion euros ($2.2 billion) on sales of 7.2 billion euros in the fourth quarter. That topped analyst expectations of a 1.87 billion euros net profit on revenue of 6.9 billion euros, according to LSEG data.

Tesla misses fourth-quarter estimates on weak auto revenue, warns of lower volume growth in 2024. Total revenue increased 3% from $24.3 billion a year earlier. Operating margin for the quarter came in at 8.2%, down from the year-ago quarter’s figure of 16% and slightly higher than 7.6% in the prior quarter. Meager growth in auto revenue was partly due to a reduced average selling price following steep price cuts around the world in the second half of the year.

Spotify users in Europe can start to buy audiobooks and subscription plans from within the music-streaming app from March as a result of the region’s new competition law for Big Tech, the Swedish company said on Wednesday. The move will help the company avoid Apple’s 30% fee for purchases through its App Store, which has long been a source of contention between app developers and the tech giant.

Boeing is set to deliver its first 737 MAX to a Chinese airline since March 2019 on Wednesday (Jan 24), flight data shows, ending a four-year freeze on imports of the US planemaker’s most profitable product in a respite for severely strained trade relations between the world’s two largest economies.

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


RESEARCH REPORTS

Suntec REIT – Deeply discounted assets

Recommendation: BUY (Maintained), Last Done: S$1.23

Target price: TP: S$ 1.47, Analyst: Liu Miaomiao

– Gross revenue for FY23 surged by 8.3% to S$462.7mn, surpassing our expectations by 7.8%. NPI slided 0.8% YoY to S$313.2mn and was in line with expectation at 104.2% of our forecast.Revenue were supported by a rental reversion of 12.3% for Singapore office spaces and a 21.8% rental reversion for Suntec City Mall. Suntec Convention has fully resumed its operations, with revenue surpassing pre-COVID levels by 3.9%.

– DPU decreased by 19.7% YoY but exceeded our estimates (S$307.9mn) by 6.7%, primarily due to higher maintenance fund contribution and weaker Australia performance, ending the full year at 7.135 cents. Another S$100mn divestment plan has been set, following the S$94.4mn of strata offices sold in FY23.

– We reiterate our BUY recommendation with an unchanged DDM-TP of S$1.47 and FY24e-25e DPU forecasts of S$7.30 to S$7.89 cents. We have factored in the effects of leasing downtime and a better-than-expected recovery of the Suntec Convention Center in FY24e. Rental reversions for retail spaces will continue to trend strong in the mid-teens, while office spaces are expected to be in the mid-single digits. The stock is trading at 42% discount to book value of S$2.1.

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