Daily Morning Note – 27 September 2021
Asia stocks are set to start the week under pressure with traders keeping an eye on China Evergrande Group’s debt crisis and the pace of economic recovery. The euro pared gains on a close German election. Futures fell in Japan, where the ruling coalition chooses a new leader this week who will probably be the next prime minister. Contracts were little changed in Australia and fell in Hong Kong earlier. U.S. contracts were little changed. The Nasdaq Golden Dragon China Index — which tracks some of the Asian nation’s largest firms listed in the U.S. — sank Friday. The S&P 500 edged up to eke out a weekly gain.
Construction group Lum Chang Holdings said on Saturday that its subsidiary, Wembley Properties, has entered into an agreement to dispose of its interest in several property assets in the United Kingdom. Wembley Properties owns a subsidiary, Kelaty Holdings, which indirectly holds the freehold interest in a recently-completed 11-storey serviced residence block with 300 rooms in the UK, as well as the long leasehold rights to an ancillary 45-lot car park at the basement of the apartment block.
Watch-listed KTL Global on Thursday said it expects the ongoing independent review of the company to take between three and five months, as it appointed its independent reviewer Deloitte & Touche Advisory Services only on Aug 14.
Southern Alliance Mining (SAM), a Malaysian iron-ore producer, posted a 257 per cent jump in net profit to RM96.7 million (S$31.2 million) for the half-year ended July 31 this year, up from RM27.1 million a year ago. Revenue rose to RM235.3 million for the same period, up 108 per cent from the RM113.2 million last year.
Metech International‘s wholly-owned subsidiary, Asian Green Tech (AGT), has entered into a joint venture (JV) with X Diamond Capital Pte Ltd (XDC) to manufacture and distribute lab-grown diamonds. In a bourse filing on Thursday, the Catalist-listed company said that the JV company will be incorporated as Asian Eco Technology and will initially have an issued and paid-up capital of S$500,000 divided into 500,000 ordinary shares.
IREIT Global’s wholly-owned subsidiary has acquired a Grade A freehold office building in Barcelona, Spain, for 27.2 million euros (S$43.1 million). The move brings the number of Spain properties in the Europe-focused real estate investment trust’s (Reit) portfolio to five – three in Barcelona and two in Madrid.
SIA Engineering Company (SIAEC) on Friday said it signed an agreement with Hawaiian Airlines to expand airframe maintenance services for the latter’s Airbus A330-200 fleet. This is in addition to the group’s existing airframe services agreements with Hawaiian Airlines for its A330 aircraft, which cover heavy checks and paintings.
Aspen on Thursday clarified that it only received the notification of its latest 510(k) clearance for one of its glove products on Sept 22, even though it “successfully obtained” said clearance on Sept 20. The Malaysian developer and glove maker was responding to further questioning from the Singapore Exchange (SGX) regarding Aspen’s first response to queries on “unusual price movements” on Sept 22 – where Aspen said it was not aware of any explanation which may explain the trading.
The wait is almost over for some Tesla customers to get access to driver-assistance technology the company has marketed in controversial ways – as long as they’re on their best behaviour. Chief executive officer (CEO) Elon Musk has said that on Friday, the electric-car maker will roll out an updated version of its Full Self-Driving beta software, which until now has only been available to roughly 2,000 people.
Google chief executive Sundar Pichai in 2019 was warned that describing the company’s Incognito browsing mode as “private” was problematic, yet it stayed the course because he did not want the feature “under the spotlight”, according to a new court filing. Google spokesman José Castañeda told Reuters that the filing “mischaracterizes emails referencing unrelated second and third-hand accounts”. The Alphabet Inc unit’s privacy disclosures have generated regulatory and legal scrutiny in recent years amid growing public concerns about online surveillance.
Moving to defend its Marvel superhero franchises, the Walt Disney on Friday filed a flurry of lawsuits seeking to invalidate copyright termination notices served by artists and illustrators involved with marquee characters like Iron Man, Spider-Man and Thor.
Daimler’s Mercedes-Benz on Friday said it will take a 33 per cent stake in battery cell manufacturer Automotive Cells Company (ACC) alongside the project’s original founders Stellantis and TotalEnergies. The purpose of the partnership is to develop cells and battery modules and “help ensure that Europe remains at the heart of the auto industry – even in an electric era”, Daimler chief executive Ola Kaellenius said in a statement.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Technical Pulse: Facebook Inc.
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
Facebook Inc (US: FB) upside has been ongoing strong especially after achieving two of our target price based on our report dated 7th May. Wave analysis suggest that the larger wave ((3)) of the primary phase is still ongoing and currently only the sub-wave (1) of the intermediate phase is completed. Despite we are in a potential sub-3 wave ABC corrective wave, technical shows a strong contention of a bullish upside to complete the 2nd leg of wave B,
Buy spot: 352.96 Stop loss: 331.25 Take profit : 375.04
>> Read more technical reports
StarHub Limited – Removing potential disrupter at a price
Recommendation: NEUTRAL (Maintained); TP S$1.24, Last close: S$1.24; Analyst Paul Chew
– Acquiring a 50.1% stake in MyRepublic’s (MR) Singapore Broadband business for S$70.8mn. And extending a S$74.2mn 3-year loan to MR Holding company.
· The acquisition will further consolidate the broadband market into a tighter oligopoly. Synergies include network cost savings and cross-selling into MR’s higher ARPU customer base.
· We are neutral on the transaction. A large benefit is to consolidate or even remove a potential competitive threat in the marketplace. The acquisition is EPS accretive and valued at FYJun21 EV/EBITDA of 8.0x and 13.6x PE. Our NEUTRAL recommendation and estimates are unchanged pending completion of the transaction in December 2021.
Facebook Inc – Capitalising on user growth
Recommendation : BUY (Initiation); TP: US$424.00, Last Close: US$352.96
· PATMI is expected to grow CAGR 19% till FY22e, supported by growth in Family Monthly Active People and Family Average Revenue per Person.
· Expanding outside advertising into commerce and AR/VR verticals, payments & others category driven by commerce activity and VR device sales.
· Initiate coverage with a BUY recommendation and DCF target price (WACC 6.7%) of US$424.00.
HK Reports – Read up on our Hong Kong reports here
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Date: 20 September 2021
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Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
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