ETF Monthly February 2024

Analyst: Zane Aw

– Review of asset classes performance in February – Most ETFs posted gains of 5% or more, with the exception of Singapore Equities which was flat and US Treasury Bonds which pulled back by a modest 2%. ETF tracking Bitcoin (BITO) was a standout as it surged 45%

– For their current trends, S&P 500 and Bitcoin lead the way trading in an uptrend. Other asset classes remain in a range consolidation

– As we head into March, we are most upbeat on Gold, Oil and Hang Seng Index. We expect these indices to extend their respective bullish performance in February. Price consolidation is likely for S&P 500, US Treasury Bonds, Bitcoin and Singapore Equities in the coming month

Thai SDR Monthly February 2024

Analyst: Zane Aw

– Review of performance in February – All 3 Thai SDRs posted gains ranging from 4-10%. CP All Public Co. Ltd was the top performer and erased its losses from January

– For their current trends, all 3 Thai SDRs are in a range consolidation phase

– As we enter March, we expect Airports of Thailand Public Co. and CP All Public Co. Ltd to consolidate sideways and digest their recent price gains with short-term resistance right ahead. PTT Exploration & Production Public Co. Ltd is expected to pullback further, with a bearish bias to break its bearish flag and trend lower

Trades Initiated in the past week


Week 10 Equity Strategy: In February, the Singapore market hardly changed with a decline of 0.35%. Electronics were the standout gainers led by Frencken and Aztech Global, following their strong 4Q23 results. Recovery in the Hong Kong stock market (+6.6%) buoyed sentiment of Hong Kong Land and DFI Retail. REITs were the weak spot, falling 5.1%. It has been hurt by a major rise in interest rate expectations. Futures market expectations of Fed rates have climbed 50 bps over the past month, from 6 to 4 rate cuts expected in 2024.

The US semiconductor index (or SOX) rallied 11% in February, boosted by Nvidia’s performance. Performance was mixed in Singapore. AEM’s share price was down 20%. Excluding the (human error) inventory write-off, the company swung into a loss as revenue fell 24% YoY. More importantly, annualised revenue guidance implies a decline of 17% to 19% for 2024. The major customer still faces low utilisation of existing installed equipment and any ramp-up in their five new customers is only expected in 2025. UMS’ profit was also weak, down an adjusted 11%. Orders from its major customer likely to be flat this year. However, the new plant in Penang is beginning to gather orders from its new major customer this month. The company’s recent S$51mn placement was earmarked to acquire another piece of land for expansion. Frencken was the best performer with the share price rising 23% after earning doubled QoQ but still down 10% YoY. 4Q23 improvement was due to customers pulling in orders to meet export cut-off times to China or tiered pricing. 1Q24 may be weaker. Nevertheless, Frencken is the most exciting. The company is enjoying multiple new customer programmes in semiconductors and instrumentation. The underlying trend is production shifted from both China and Europe into SE Asia.

Speaking to the two largest real estate agencies, expectations are the residential property market has bottomed but recovery is muted. Demand for residential new launches in 2023 is the lowest in more than a decade at 6400 units. This is even lower than post-TDSR years of 7000 plus units in 2014/15. Expectations are for property prices to rise 3-5%. The number of new launches will jump from 7,500 to 11,000 in 2024. We are more sanguine on demand. There is almost a 10-fold jump in new launches to 2,350 units for the core central region which is already burdened with 4-year inventory. Furthermore, the doubling of residential completions over the past two years could push demand from the primary into the secondary market.

Paul Chew
Head Of Research

Singapore stock fell 0.2 per cent or 6.09 points on Friday (Mar 1) to end the week at 3,135.76. Across the broader market, decliners narrowly beat advancers 278 to 274, after 2.1 billion securities worth S$1.4 billion changed hands. The Nikkei 225 climbed 1.9 per cent, the Hang Seng Index rose 0.5 per cent, and the Shanghai Composite Index added 0.4 per cent. The ASX 200 also gained 0.6 per cent. Bucking the trend, the Bursa Malaysia lost 0.9 per cent.

US stocks rose on Friday (Mar 1), with the S&P 500 and Nasdaq closing at record highs, as technology stocks rallied on continued enthusiasm for artificial intelligence (AI), with further support from declining Treasury yields. The Dow Jones Industrial Average rose 90.99 points or 0.23 per cent to 39,087.38, the S&P 500 gained 40.81 points or 0.8 per cent to 5,137.08 and the Nasdaq Composite gained 183.02 points or 1.14 per cent to 16,274.94.

Top gainers & losers


Events Of The Week



Property and construction company TA Corp posted a 9 per cent rise in net profit to S$11.7 million for its second half ended Dec 31, 2023, from S$10.8 million in the previous corresponding period. Earnings per share stood at S$0.0227 for the half-year, up from S$0.0207 in the year-ago period. However, revenue for H2 fell 80.4 per cent to S$43.4 million from S$221.1 million a year earlier. This was attributed mainly to lower revenue from the company’s construction segment, due to the liquidation of its wholly owned subsidiary Tiong Aik Construction in July 2023. Revenue for the segment fell by S$70 million from a year earlier to S$16.9 million. Meanwhile, TA Corp’s real estate investment segment had higher revenue due to improved bed rates at Tuas South Dormitory.

Private healthcare group IHH Healthcare is continuing its quest for organic growth as it works to expand its capacity by around 33 per cent by 2028, said its senior management on Friday (Mar 1). This is equivalent to around 4,000 new beds in several markets, with more than 1,000 each slated to be added to Malaysia and India over the next five years. In other markets – specifically Turkey, Europe and Hong Kong – bed numbers will go up by around 120 to 310 over the same period. To increase its capacity, the group is planning to spend around RM2.7 billion (S$763.9 million) to RM2.8 billion in FY2024, said group head of finance Dilip Kadambi.

Developer TID’s Lentoria project moved 50 units with prices starting from S$1,958 per square foot (psf) during its launch weekend on Mar 2 and 3. This works out to roughly 18.7 per cent of the 99-year leasehold development’s 267 units. Of the 50 units sold, over 70 per cent were for two and three-bedroom units, sized from 700 square feet (sq ft) to 1,1119 sq ft, said TID. “Prospective buyers were particularly drawn to the fact that Lentoria will be looking to serve its notice of vacant possession by July 2027.” Overall, units were priced at an average of S$2,120 psf. Located in District 26, Lentoria is the fourth new launch in the Lentor area, out of six state land sites sold so far. The 10,819-square-metre site was purchased by TID, a joint venture between Hong Leong Group and Mitsui Fudosan, for S$276.36 million (S$1,130 psf per plot ratio) in September 2022.


Oil prices rose 2 per cent on Friday (Mar 1) and posted weekly gains as traders awaited an Opec+ decision on supply agreements for the second quarter, while also weighing fresh US, European and Chinese economic data. Brent futures for May settled US$1.64 higher, or 2 per cent, at US$83.55 a barrel. The April Brent futures contract expired on Feb 29 at US$83.62 a barrel. US West Texas Intermediate (WTI) for April rose US$1.71, or 2.19 per cent, to US$79.97 a barrel. For the week, Brent added around 2.4 per cent following the switch in contract months, while WTI gained more than 4.5 per cent.

Online property portal PropertyGuru posted a net income of S$1.1 million for the fourth quarter ended December, reversing from a net loss of S$5.2 million a year prior and marking the second sequential quarter of positive earnings. This came as revenue for the quarter rose 3.5 per cent to S$41.5 million from S$40.1 million in Q4 FY2022, on the back of growth in its Singapore marketplaces. Adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) surged to S$8.9 million from S$503,000 in the corresponding period last year, based on its financials released on Friday (Mar 1). Marketplaces revenue increased 4.1 per cent year on year to S$39.9 million, as a strong performance in its Singapore market helped to offset challenging market conditions in Vietnam. Earnings per share for the period stood at S$0.01, reversing from a loss per share of S$0.03 a year ago.

Tesla unveiled new incentives, including insurance subsidies, on Friday to woo consumers in the world’s largest auto market, where the U.S. electric vehicle giant is in a protracted price war against entrenched rivals such as BYD. Customers picking up existing inventories of Model 3 sedans and Model Y SUVs by the end of March would be entitled to a maximum of 34,600 yuan ($4,807.76) worth of incentives, Tesla said in a post on its Weibo account. Among the incentives are a 8,000 yuan discount in car insurance products with partnerships with Tesla, and a 10,000 yuan discount if the buyer chooses a change of paint. Tesla also offers limited-time preferential financing plans that could save up to 16,600 yuan for purchases of Model Y.

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


CapitaLand Investment Limited – Targeting to double FUM in 5 years

Recommendation: Buy (Maintained), Last Done: S$2.71

Target price: S$3.38, Analyst: Darren Chan

– FY23 revenue of S$2.784bn (-3.2% YoY) formed 92% of our FY23e forecast while PATMI of S$181mn (-79% YoY) was below our estimate due to revaluation losses of S$600mn and lower contribution from China.

– FY23 fee-related revenue (FRB) rose 8.7% YoY, driven by higher recurring fund management fees (+9% YoY), lodging management fees (+28% YoY), and commercial management fees (+11% YoY). However, this was offset by a significant decrease of 52% in event-driven fees. Including S$10bn of funds pending deployment, CLI has reached its FY24 FUM target of S$100bn and has now set a new target to reach S$200bn in five years.

– Maintain BUY with a lower SOTP TP of S$3.38 from S$3.68. We cut our FY24e PATMI by 15% after factoring in a weaker contribution from China. Our SOTP-derived TP of S$3.38 represents an upside of 29.2% and a forward P/E of 15x. We like CLI for its robust recurring fee income stream and asset-light model. We expect the FRB to continue to improve, boosted by the lodging business with higher RevPAU (FY23: +20%) and more lodging units turning operational.

China Aviation Oil – Net profit and dividend beat expectations

Recommendation: BUY (Maintained) Last Done: S$0.905

Target Price: S$1.05; Analyst: Peggy Mak

– The results beat our estimates by 22%, due to stronger-than-expected contributions from 33%-owned SPIA.

– Net profit rebounded 75.5% due to 1) stronger demand for jet fuel with borders reopened from early 2023; 2) higher margin per metric ton with increased direct sales with airline customers; and 3) SPIA’s net profit jumping 61% YoY. Net cash at year-end was US$373mn (S$0.623/sh). Full-year dividend was raised to 5.05 Sct (FY22: 1.6 Sct), a yield of 5.4%.

– China’s international air traffic is still at 37% below pre-Covid level. Flights are progressively being restored with further normalization of aviation services. China accounted for 62% of total revenue in FY23.

– Maintain BUY call and raised TP to DCF-derived TP to S$1.05 (prev. S$1.01). We lifted our FY24e net profit estimates by 17% to factor in improved gross margin.

ComfortDelGro Corp Ltd – More growth ahead

Recommendation: BUY (Maintained); TP S$1.63, Last close: S$1.36; Analyst Paul Chew

– FY23 earnings beat expectations at 117% of our forecast. Revenue was within our estimates at 98%. 4Q23 PATMI jumped 77% YoY to S$49.3mn.

– The turnaround in UK bus operations and growth in Singapore and China taxi operations were the major drivers of earnings.

– We raised our FY24e earnings by 24% to S$207mn. Our BUY recommendation is maintained and the DCF target price raised to S$1.63 (prev. S$1.57). We expect multiple earnings drivers in 2024; (i) higher platform fees and commission for Singapore taxis; (ii) UK bus indexation and re-contracting; (iii) Increased taxi fleet size in China; (iv) Margin recovery for Singapore rail operations as operating cost stabilises, rail passenger numbers grow and lagged re-pricing of fares.

PropNex Ltd – Challenging but bottomed

Recommendation: ACCUMULATE (Maintained); TP S$0.97, Last close: S$0.865; Analyst Paul Chew

– 2023 results were below expectations. Revenue and PATMI were 83%/76% of our estimates. 2H23 adjusted PATMI declined 26% YoY to S$26.2mn, dragged down by weakness in new launch transactions. The dividend for FY23 dropped 11% to 6 cents or 6.9% yield.

– Transaction volumes in 2023 disappointed. Consumer sentiment was weak and hesitant with April’s rising interest rates and cooling measures. Despite new launches rising by 66% in 2023 to 7,551 units, weakness persisted.

– We lower our FY24e earnings by 16% to S$56mn. Our DCF target price was lowered to S$0.97 (prev. S$1.16) and ACCUMULATE recommendation maintained. We expect a recovery in transactions in FY24e. Driving transactions are recovering sentiment post-cooling measures, a higher number of new launches, a surge in residential completions, resilient HDB prices for upgraders, and lower mortgage interest. PropNex remains the largest real estate agency in Singapore, with 62.5% market share in private residential and HDB resale transactions. The company pays an attractive yield of 6.9% (or S$44mn) backed by S$148mn net cash.

SATS – Focus on refinancing debt and managing costs

Recommendation: REDUCE (Maintained) Last Done: S$2.66

Target Price: S$2.31; Analyst: Peggy Mak

– SATS reported 3Q24 net profit of S$31.5mn, which included S$3.1mn profit from WFS. The 9M24 net profit of S$23.7mn is in line with our FY24e estimates of S$66mn, before an estimated S$30mn amortization of intangible assets. The amount will be finalized in March 2024.

– SATS group operations (excluding WFS) have nearly returned to pre-pandemic volume – flights handled was 86%, meals served, cargo handled and ground handling were 94% to 99% as of Dec 2023. Looking ahead, growth will be led by overseas operations in China, India and Indonesia, and lower interest costs through refinancing of debt. Net debt was flat QoQ at S$2.2bn, and net gearing was 0.9x.

Maintain our FY24e earnings forecast and REDUCE call. We raised our DCF-derived TP to S$2.31 (prev. S$2.23), as we roll over to the next financial year.

ST Engineering – Defence and security led earnings growth

Recommendation: Accumulate (Downgrade) Last Done: S$3.97

Target Price: S$4.50; Analyst: Peggy Mak

– FY23 net profit was in line with our expectations. Net profit was affected by several one-offs amounting to S$66mn. Excluding these, net profit would have grown by 23.7%.

– Defence and Public Security (DPS) (+40.1% YoY) led earnings growth, with digital sytems and cyber the largest growth engine. Commercial aerospace (CA) grew 47% YoY (excluding one-off items) with increased MRO demand and improved margins from passenger-to-freighter conversions. Urban solutions and Satcom (USS) incurred loss on divestment and severance costs on restructuring. Transcore turned profitable in 4Q23. Orderbook remained strong at S$27.4bn.

– We maintain our FY24e earnings forecast and TP of S$4.50. DPS would remain the key earnings driver in FY24e, underpinned by digital solutions, AI-enabled command and controls, and cybersecurity. Due to recent price appreciation, we downgrade our recommendation to ACCUMULATE from BUY.

Semiconductor 4Q23 Update – AI driving most of the early recovery

Analyst: Jonathan Woo

– 4Q23 revenue growth reaccelerated significantly to 25% YoY (3Q23: flat YoY), with NVDA and SK Hynix the bright sparks. NVDA’s >3x spike in revenue (accounting for 18% points of YoY growth) helped to offset lingering weakness in Equipment and Foundry as wafer fabrication spending dipped -40% YoY in FY23.

– AI growth remained very robust, with most companies attributing better 4Q23 results to increasing AI-related demand. Data Centre CPUs and GPUs benefit the most due to increasing workload capacity from end customers, while Memory companies are seeing a surge in orders due to the need for higher DRAM + NAND memory in devices like AI servers and AI PCs.

– Forward guidance is for 1Q24e revenue growth of ~13% YoY. We expect growth to be supported by increasing AI-related spending on GPUs and High Bandwidth Memory (HBM), a slight recovery in the PC market, and higher wafer fabrication of >7nm chips.



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