Subscribe to our newsletter to get latest STOCK PICKS

Financial Sector

OCBC BANK (SGX: O39)

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.

Property/REIT

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.

Conglomerate

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.

Telecommunication

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.

Transport

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.

Subscribe to our newsletter to get latest STOCK PICKS

Join the Singapore Equity Research community group in our POEMS Mobile 3 App to be the first to receive Research Reports and Insights!

Join the Singapore Equity Research community group in our POEMS Mobile 3 App to be the first to receive Research Reports and Insights!

To view the recording of our Singapore Outlook 1Q2024 webinar, please visit:

@PhillipCapital

Watch Now!

@PhillipCapital

Watch Now!

To view the recording of our Singapore Outlook 1Q2024 webinar, please visit:

@PhillipCapital

Watch Now!

@PhillipCapital

Watch Now!

IMPORTANT INFORMATION

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