IFAST CORPORATION LTD. (SGX:AIY)
COMFORTDELGRO CORPORATION LTD (SGX:C52)
GENTING SINGAPORE LIMITED (SGX:G13)
CHINA AVIATION OIL(S) CORP LTD (SGX:G92)
UMS HOLDINGS LIMITED (SGX:558)
Singapore Stock 4Q20 Results Review - Earnings U-Turn
- First positive earnings revision since 2Q19, +2% for FY21F and +3% for FY22F.
- Boosted by banks and agri products, lowered for shipyards.
- Earnings (excluding property) to recover back to 97% of pre-pandemic level by end-2021.
- Strongest y-o-y earnings recovery in 2Q21, to taper off and stay positive beyond that.
Earnings revised up post 4Q20 results – first after 6 consecutive quarters of earnings cuts.
- Positive earnings revision of 2% for FY21F and 3% for FY22F for stocks under our coverage. This is the first upward earnings revision after 6 consecutive quarters of cuts. The outcome is in line with the anticipated economic recovery as the global vaccination drive unfolds and business activities pick up.
- The STI now trades at 13.8x (+0.5 standard deviation) 12-month forward P/E. The latest upward earnings revision underpins STI 2021 target of 3180 that coincides with 14.08x (+0.75 standard deviation) blended FY21F/FY22F P/E.
Earnings boost from banks.
- Key earnings uplift came from banks with 7.3% in FY21F and 7% in FY22F on better NIM; better non-interest income outlook for UOB (SGX:U11) and higher loans growth expectation for OCBC (SGX:O39).
- Agri products saw positive earnings revision from higher CPO price trends for First Resources (SGX:EB5) and strong product demand for Wilmar International (SGX:F34).
- But yards Keppel Corp (SGX:BN4), Sembcorp Industries (SGX:U96) and Sembcorp Marine (SGX:S51) suffered earnings cuts due to impairment and fair value losses.
- Earnings for Genting Singapore (SGX:G13) and Singapore Airlines (SGX:C6L) were cut in anticipation of slower international travel recovery.
Heading back to pre-COVID levels.
- Earnings for stocks under our coverage are anticipated to recover back to 97% (excluding property) of FY19 (pre-pandemic level) by end 2021 with 44.2% FY21F earnings growth.
- Consumer discretionary sector’s 608% FY21F earnings per share jump is due to a low base, driven by Genting Singapore (SGX:G13) and Koufu (SGX:VL6) on resilient domestic and tourist recovery.
- Healthcare: Sustained 40% FY21F earnings growth on robust demand for Riverstone (SGX:AP4)’s healthcare gloves and IHH Healthcare (SGX:Q0F) driven by Gleneagles HK.
- Index heavyweight banks - DBS (SGX:D05), OCBC (SGX:O39) and UOB (SGX:U11) should see a 23.2% growth in earnings per share growth in FY21.
- The REITs’ sector 22% DPU growth is led by
Pandemic recovery on track.
- 4Q20 results season underpins our view that earnings are on track to recover as economies reopen and the global vaccination program unfolds. We maintain our positive view on vaccine beneficiaries that includes hospitality REITs
- See report: Singapore Hospitality - DBS Research 2021-03-10: Right Time To Pick Up Fallen Angels; Time For Hospitality S-REITs To Shine.
- Genting Singapore (SGX:G13) and Koufu (SGX:VL6) should also benefit from tourist recovery. The rise in US 10-year yields could consolidate soon, that should see interest returning to REITs and technology stocks while the recent rally in banks may pause soon.
- Among the list of top Singapore growth stocks yielding > 20% growth with upside to our target price are
- See report attached below for complete analysis.
Kee Yan YEO CMT
DBS Group Research
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Janice CHUA
DBS Research
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https://www.dbsvickers.com/
2021-03-11
SGX Stock
Analyst Report
7.640
SAME
7.640
1.990
SAME
1.990
1.000
SAME
1.000
1.380
SAME
1.380
1.57
SAME
1.57