Comprehensive Market Analysis of Listed Companies

Broker: Lim & Tan Securities

Date: 13 November 2024

Singtel: Strong Earnings and Strategic Growth

Singtel, trading at \$3.16, demonstrated a remarkable EBIT growth of 27% to S\$738 million in the first half-year. This momentum is attributed to improved mobile performance and cost management at Optus, along with continued margin improvements at NCS. Optus saw a 58% surge in EBIT, while NCS’ EBIT jumped 40%. Underlying net profit rose 6% to S\$1.19 billion, which would have been 9% in constant currency terms.

Despite a 42% decrease in net profit to S\$1.23 billion due to an exceptional gain last year, operating revenue remained stable at S\$6.99 billion. Singtel’s Group CEO, Mr. Yuen Kuan Moon, highlighted the positive start to their Singtel28 plan, focusing on execution and operating rigor. The Group has also been simplifying product offerings and innovating with technologies like network slicing.

With a solid financial position and a healthy cash balance of S\$2.68 billion, Singtel’s net debt increased to S\$9.73 billion due to spectrum payments in Australia. Free cash flow rose 9% to S\$1.30 billion. An interim ordinary dividend of 7.0 cents per share was approved, up 35% from the previous period. Singtel’s market cap stands at \$52.2 billion, trading at 18x forward PE with a price to book of 2.1x. The potential upside is 17-18%, maintaining an Accumulate rating.

Delfi Limited: Navigating Through Challenging Times

Delfi Limited, trading at S\$0.86, reported a 5.5% Y-o-Y decline in Net Sales to US\$117.6 million for 3Q 2024, bringing 9M 2024 Net Sales to US\$378.5 million, a 7.1% decrease. The performance was impacted by weaker regional currencies and the termination of an agency brand. However, on a constant currency basis, the decline was more moderate at 1.8% for 3Q and 2.8% for the 9M period.

Net Sales in Indonesia for 3Q 2024 totaled US\$70.5 million, reflecting a 10.3% Y-o-Y decrease. On a constant currency basis, the decline was 4.6%. Regional Markets saw a 2.9% increase due to growth in Agency Brands in Malaysia and the Philippines. For 9M 2024, the Group reported EBITDA of US\$41.6 million, a 21.2% Y-o-Y decrease, mainly due to lower Net Sales and higher raw material costs.

Despite these challenges, Delfi generated US\$46.9 million in net cash from operations, used to fund capital expenditures of US\$27.1 million. With a dividend yield of 6.7%, Delfi is capitalized at S\$526 million, trading at 1.5x P/B and forward P/E of 10.7x. Given its high yield and discounted valuations, an Accumulate rating with an unchanged target price of S\$1.04 is maintained.

Institutional and Retail Fund Flows

For the week of 4 November 2024, institutional investors showed a net buy of +S\$101.2 million, while retail investors had a net sell of -S\$419.6 million. Notable institutional net buys include DBS (+S\$161.1 million), UOB (+S\$78.8 million), and Singtel (+S\$40.4 million). Top retail net buys were CapitaLand Ascendas REIT (+S\$35.7 million), CapitaLand Integrated Commercial Trust (+S\$27.2 million), and Genting Singapore (+S\$25.9 million).

Dividend Announcements

Several companies announced dividends for the upcoming months:

• AIMS APAC REIT: 2.4c, Ex-Dividend Date: 13 Nov, Payable: 24 Dec
• Frasers Comm & Logistics Trust: 3.32c (Apr-Sept), Ex-Dividend Date: 13 Nov, Payable: 17 Dec
• DBS: 54c (3Q’24), Ex-Dividend Date: 14 Nov, Payable: 25 Nov
• Netlink NBN Trust: 2.68c Interim, Ex-Dividend Date: 15 Nov, Payable: 29 Nov
• Singpost: 0.34c Interim, Ex-Dividend Date: 18 Nov, Payable: 2 Dec
• Frasers Hospitality Trust: 1.1682c, Ex-Dividend Date: 19 Nov, Payable: 22 Dec
• Boustead Singapore Ltd: 1.5c Interim, Ex-Dividend Date: 21 Nov, Payable: 2 Dec
• The Hour Glass Ltd: 2c Interim, Ex-Dividend Date: 22 Nov, Payable: 4 Dec
• SIA: 10c Interim, Ex-Dividend Date: 25 Nov, Payable: 11 Dec
• Ban Leong Tech Ltd: 0.5c Interim, Ex-Dividend Date: 28 Nov, Payable: 9 Dec
• Chasen Holdings Ltd: 3c Special, Ex-Dividend Date: 28 Nov, Payable: 18 Dec
• Old Chang Kee: 1c Interim, Ex-Dividend Date: 29 Nov, Payable: 20 Dec
• UMS Holdings Ltd: 1c Interim, Ex-Dividend Date: 4 Dec, Payable: 16 Dec
• FNN: 4c Final, Ex-Dividend Date: 23 Jan, Payable: 28 Jan

SGX Watch-List

As of the latest update, 34 companies are under the SGX Watch-List. Recent additions include Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Green Build Technology, Global Invacom Group, and Keong Hong.

Companies like Amos Group, Ascent Bridge Ltd, and ASL Marine have been on the list since various dates, reflecting their ongoing financial challenges. Investors should be cautious and monitor these companies closely for any significant changes in their financial health or strategic direction.