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Financial Sector


TP: S$14.96

Dvd. Yield: 5.2%

Our analysts like OCBC due to attractive valuations and dividend yield of 6.6%, buffered by a well-capitalised 14.8% CET 1, and fee income recovery from China’s re-opening. In FY24, they anticipate NII growth driven by stable NIMs and rising loans amid stabilised rates, with fee income recovery boosting earnings.


CapitaLand Investment(SGX: 9CI)

TP: S$3.68

Dvd. Yield: 3.8%

Lodging segment continues to perform exceptionally well. 3Q23 RevPAU improved 15% YoY, attributed to higher occupancy (+7ppts) and ADRs (+3%). Recurring fund management continues to improve. It grew 9% YoY to S$272mn in 9M23. The potential Fed pivot in 2024 could drive capital recycling activities and event-driven fee-related income.

Frasers Centrepoint Trust (SGX: J69U)

TP: S$2.29

Dvd. Yield: 5.4%

Our analysts recommend Frasers Centrepoint Trust for its defensive suburban mall portfolio, high occupancy, and inorganic growth opportunities from its sponsor. Retail portfolio occupancy is nearly full at 99.7% with positive rental reversions. Tenants’ sales and shopper traffic continued to grow 7.3% and 24.7% YoY, respectively for FY23 indicating robust demand. With stable retail portfolio valuations with a visible inorganic growth pipeline, it has no refinancing risks in FY24.


Keppel Corp (SGX:BN4)

TP: S$7.52

Dvd. Yield: 4.7%

Keppel’s asset monetisation exercise will be front and centre. The divestment of the legacy rig assets could return about S$4bn cash to Keppel. Other assets that could be monetised include M1, the data centres and real estate. With its fund management platform, Keppel is building recurring income on an asset-light model.

ST Engineering (SGX:S63)

TP: S$4.50

Dvd. Yield: 4.1%

Heightened geopolitical tensions will drive an increase in spending and stockpiling of defence and cybersecurity products and services, thus driving STE’s order wins going forward.

ThaiBev (SGX: Y92)

TP: S$0.67

Dvd. Yield: 4.4%

Volumes in Vietnam are expected to be weak until 1Q25 when the macro environment recovers. Consumption of beer in Thailand should enjoy support from the recovery in tourism. However, the emergence of Carabao as a new beer competitor will raise the pricing and marketing intensity. The upside in our forecast will stem from fiscal spending underway in Thailand. The stimulus is targeted at consumer spending and farmer income. A bonus is low alcohol taxes.

Valuetronics (SGX: BN2)

TP: S$0.7

Dvd. Yield: 4.0%

Valuetronics current cash hoard of HKD1.143bn (or S$199mn), around 80% of the market capitalisation is net cash. There is visibility of earnings growth over the next two years as Valuetronics’ four new customers ramp up production. The company trades at a dividend yield of 6% and has an outstanding share buyback plan of approx. HKD182mn (or > 50mn shares at current share price).

China Aviation Oil (SGX: G92)

TP: S$1.01

Dvd. Yield: 1.8%

International passenger traffic in China leapt 12-fold in the first 11 months of 2023. The major Chinese carriers returned to profitability in 3Q23. CAO could potentially supply jet fuel to more international airports in China. Balance sheet is backed by net cash of US$308mn as at Dec 2022, equivalent to 56% of market cap.


Singtel (SGX:Z74)

TP: S$2.80

Dvd. Yield: 4.0%

Singtel is making significant strides in restructuring the entire group, monetising assets, and shedding unprofitable entities. Singtel revised its payout ratio higher from 60-80% to 70-90% and announced a 3-year programme to remove S$600mn (of S$200mn p.a. FY24-26) of indirect cost.


ComfortDelgro (SGX: C52)

TP: S$1.57

Dvd. Yield: 3.3%

ComfortDelGro continues to reprice higher its bus and taxi services from rising costs and reduced competition and its earnings recovered strongly from higher bus fees in the UK and a reduction in taxi rental rebates in Singapore.

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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.  

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