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Sembcorp Industries (SCI SP): Ahead of schedule

• BUY Entry – 5.45 Target– 5.85 Stop Loss – 5.25
  
• Sembcorp Industries Ltd provides utilities and integrated services for industrial sites such as power, gas, steam, water, wastewater treatment and other on-site services. Sembcorp Industries serves industrial parks, business, commercial, and residential spaces.
  
• Ahead of schedule. Sembcorp industries recently mentioned that its first greenfield renewables project in the Middle East will begin commercial operations more than four months ahead of schedule. This comes as its wholly owned subsidiary, Sembcorp Utilities, completed the acceptance tests to achieve the commercial operation of the power project in Oman. Manah II Solar Independent Power Project is Sembcorp’s first greenfield renewables development in the Middle East. The project is also backed by a 20-year power purchase agreement with Nama Power and Water Procurement Company. The development is expected to be accretive to the group’s earnings per share.
  
• Solar energy storage project in India. Sembcorp Industries’ wholly owned renewables subsidiary, Sembcorp Green Infra, was awarded a build-own-operate project by India’s public sector company, Solar Energy Corporation of India. Comprising a 150 megawatt (MW) solar photovoltaic project and a 300 MW-hour battery energy storage system (Bess), this represents Sembcorp’s first solar and Bess hybrid project in India. Sembcorp also mentioned that the agreement comes as part of a bid for two-gigawatt (GW) interstate transmission system-connected solar power projects with 4 GW-hour of Bess. The project is scheduled to be commercially operational within two years from the date the agreement is signed, and it will be funded through a mixture of internal funds and debt. It is expected to bring Sembcorp’s gross renewables capacity in India to almost 6 GW.
  
• 1H24 results review. Revenue fell by 12.3% YoY to S$3.21bn in 1H24, compared to S$3.66bn in 1H23. Net profit rose by 1.1% to S$550mn in 1H24, compared to S$544mn in 1H23. Basic EPS per share rose to 30.30 S cents in 1H24, compared to 29.71 S cents in 1H23.
  
• Market Consensus.
  

(Source: Bloomberg)

Bumitama Agri Ltd (BAL SP): Good signs for palm oil prices

• RE-ITERATE BUY Entry – 0.860 Target– 0.920 Stop Loss – 0.830
  
• Bumitama Agri Ltd. produces CPO and PK, with its oil palm plantations located in Indonesia. The Company’s primary business activities are cultivating and harvesting our oil palm trees, processing FFB from its oil palm plantations, its plasma plantations and third parties into CPO and PK, and selling CPO and PK in Indonesia.
  
• Rebound in Palm Oil Prices. Malaysian palm oil prices recently rebounded to above MYR 4,600 per tonne, supported by bargain buying. The contracts are on track for their first weekly advance in three, rising over 4% since its low on 20^th December 2024, driven by optimism that the Lunar New Year festivities in key consumer China will boost demand for the commodity. On the production side, heavy rains in Malaysia led the industry regulator to project a fourth consecutive monthly decline in output for December, which could result in lower stockpiles for the third month in a row. Meanwhile, concerns about dry weather in parts of Argentina prompted speculators to unwind short positions in soybean and soymeal futures, lending additional support to palm oil prices. However, gains were capped by export data from cargo surveyors, which estimated that Malaysian palm oil shipments fell between 1.1% and 4% during December 1–25 compared to the same period in November.
  

Palm Oil Spot Price

(Source: Bloomberg)

• Palm oil prices to remain stable in 2025. According to the Council of Palm Oil Producing Countries (CPOPC), palm oil prices is expected to range between RM4,000-5,000/tonne in 2025 driven by stagnating production in key markets. As global demand for palm oil grows, stagnating production is likely to result in a supply shortage, driving prices higher. In addition, stagnating production – exacerbated by ageing plantations, unpredictable weather and limited expansion into new plantation areas – was expected to strain global supply, further pushing prices upward. Bumitama Agri is likely to benefit from a stable and better palm oil price going into 2025.
  
• Resilient business model. Bumitama Agri has demonstrated resilience over the past decade, navigating fluctuating palm oil prices driven by changing demand, adverse weather, and geopolitical tensions. The company has consistently delivered strong financial performance and shareholder returns, including a record 14% dividend yield in FY22 and 10% in FY23, supported by robust cash flow and a healthy balance sheet. Despite weather-related challenges and cost pressures in 1H24, Bumitama achieved significant QoQ growth in Q2, with gross profit, net profit, and EBITDA showing marked improvement. Core profit rose 43%, fueled by higher palm oil prices and easing cost pressures. Key growth drivers include Indonesia’s biodiesel mandate, set to increase blending requirements to 40% by 2025, boosting domestic consumption and reducing export volumes, thereby sustaining elevated global palm oil prices. Surging palm kernel prices further contribute to growth opportunities. Looking ahead, Bumitama is well-positioned for continued financial growth, supported by stable costs, strong demand, and favorable pricing for palm oil and palm kernel products.
  
• 1H24 results review. Revenue rose by 1.4% YoY to IDR7.6tn in 1H24, compared to IDR7.50tn in 1H23. Net profit fell by 29.5% to IDR1.00tn in 1H24, compared to IDR1.42tn in 1H23. Basic and Diluted EPS per share is DR494 in 1H24, compared to IDR686 in 1H23.
  
• Market Consensus.
  

(Source: Bloomberg)

Laopu Gold Co Ltd. (6181 HK): Positive outlook for Gold

• BUY Entry – 255 Target – 295 Stop Loss – 235
  
• Laopu Gold Co Ltd is a China-based company engaged in development, manufacturing and sales of gold jewelries. The Company provides manufacturing and maintenance and repair services. The products primarily comprise pure gold jewelry and gem-set jewelry (with diamonds or other gemstones inlaid in pure gold). Pure gold jewelry products range from accessories for daily wear, including pendants, bangles, rings and ear studs, to jewelry with greater gram weight, including ornaments, vessels for daily use and vessels for display. Gem-set jewelry products refers to jewelries that diamonds or other gemstones (such as colored stones) are inlaid into the pure gold settings. The Company operates in China’s market.
  
• 2025 uncertainties continues to support gold prices. Gold prices are projected to rise higher than anticipated as central banks in emerging markets accelerate their purchases. The US dollar continues to benefit from a risk-averse market environment, driven by investor caution surrounding upcoming policies from US President-elect Donald Trump and the Federal Reserve’s (Fed) next moves. At its December policy meeting, the Fed adopted a hawkish stance, raising expectations for a pause in its interest rate-cutting cycle this month. Despite the strength of the US dollar, a halt in the recovery of US Treasury bond yields appears to be supporting gold prices. This is further bolstered by heightened demand for gold as a traditional safe-haven asset amid persistent economic concerns in China and geopolitical tensions, particularly in the Middle East. Additionally, expectations of more proactive Chinese policies to stimulate growth in 2025 are providing further support for gold prices, with China remaining the world’s largest consumer of the precious metal.
  
• Quality over quantity business model. Founded 15 years ago, the company has deliberately maintained a boutique presence with just 33 stores, specializing in Buddhism-inspired heritage gold jewelry sold at fixed prices. This approach sets it apart from local competitors that typically price items based on weight. For Laopu, this distinction has elevated its luxury appeal, drawing favorable comparisons to global brands like Cartier and Tiffany, a rare accomplishment for a Chinese label. The company’s small scale also serves as a strategic advantage, enabling a focus on quality over quantity and positioning it uniquely within the emerging market for China-made luxury goods. Looking ahead, this business model is well-suited to attracting high-net-worth consumers, strengthening Laopu Gold’s long-term prospects.
  
• Expansion plans. Laopu operates a modest network of 33 stores, specializing in Buddhism-inspired heritage gold jewelry. In addition to its physical presence, the company extends its reach online through flagship stores on e-commerce platforms such as Alibaba’s Tmall, JD.com, and WeChat. Over the next three years, Laopu plans to expand strategically by adding 10 new stores in mainland China and approximately five more across Hong Kong, Macau, Singapore, and other Asian cities. Despite this growth, the company remains committed to its core philosophy of prioritizing quality over quantity.
  
• 1H24 earnings. Revenue increased by 148.3% to RMB3.52bn in 1H24, compared with RMB1.42bn in 1H23. Net profit rose to RMB587.8mn in 1H24, compared to RMB196.8mn in 1H23. Basic EPS rose to RMB4.11 in 1H24, compared with RMB1.44 in 1H23.
  
• Market consensus.
  

(Source: Bloomberg)

Lenovo Group Ltd. (992 HK): Upcoming CES Expectations

• RE-ITERATE BUY Entry – 10.30 Target – 11.50 Stop Loss – 9.70
  
• Lenovo Group Ltd is an investment holding company primarily engaged in development, manufacture and marketing of technology products and services. The Company operates its business through three segments. The Intelligent Devices Group segment is engaged in the manufacture and sale of personal computer (PC), tablet, smartphone and other smart devices. The Infrastructure Solutions Group segment is engaged in the provision of artificial intelligence (AI) products, services and partnerships, the development of comprehensive full-stack infrastructure solutions portfolio as well as the provision of storage solutions. The Solutions and Services Group segment is engaged in the provision of information technology (IT) solutions and services across PC, infrastructure, and smart verticals, including attached services, managed services and As a Service (AaS) offering. The Company conducts its business in the domestic and overseas markets.
  
• Exciting CES expectations . Lenovo is poised to make a strong impression at the upcoming Consumer Electronics Show (CES) 2025, set to begin on January 7 in Las Vegas. The tech giant is expected to unveil a range of groundbreaking products that underscore its dedication to innovation and technological advancement. Among the highlights is a self-charging Bluetooth keyboard, designed to transform how users interact with their devices. Another key debut is an AI-powered travel set, tailored to enhance convenience and efficiency for users on the move. In a potential industry first, Lenovo is rumored to introduce a laptop with a rollable screen, offering unprecedented flexibility by allowing users to expand the display as needed—setting a new standard in portable computing. The lineup also includes four new tablets, addressing diverse user preferences, and the Lenovo Legion Go S, a handheld gaming device running on SteamOS. Designed for gamers, it promises a robust and portable gaming experience. With this diverse portfolio, Lenovo is showcasing its leadership in the tech industry, demonstrating its ability to innovate and meet evolving consumer demands.
  
• Partnership to with Volcano Engine. At the recent 2024 Lenovo Tianxi Ecosystem Partner Conference in Beijing, Lenovo officially announced its partnership with Volcano Engine. Leveraging the “super brain” of the Doubao large language model, Lenovo’s AI desktop assistant, Ruyi, will evolve from a traditional system tool into a comprehensive intelligent conversational assistant. This transformation aims to significantly enhance user interaction with PC systems, offering a more advanced and intuitive experience. These upgrades are expected to drive increased consumer interest and boost demand for Lenovo’s AI-powered PCs.
  
• Unveiling its AI OS. At Lenovo’s annual ecosystem partner conference in Beijing, the company unveiled a significant upgrade to its Tianxi Personal Intelligent System (Tianxi AS). Executives highlighted that Tianxi AS operates seamlessly on traditional operating systems, integrating deeply with them while supporting cross-platform functionality across multiple devices. Built on a “one body, multiple terminals” strategy, Tianxi AS enables hybrid deployment between terminals and personal clouds, providing users with a personalized assistant tailored to their needs. The system offers scenario-based integration capabilities and connects with multiple intelligent agents within an open ecosystem, further enhancing its versatility and user experience.
  
• 1H25 earnings. Revenue increased by 21.9% to US$33.3bn in 1H25, compared with US$27.3bn in 1H24. Net profit rose by 34.8% to US$636.8mn in 1H25, compared to US$472.5 in 1H24. Basic EPS rose to 4.91 US cents in 1H25, compared with 3.57 US cents in 1H24.
  
• Market consensus.
  

(Source: Bloomberg)

Banco Marco SA (BMA US): A glimmer of hope

• BUY STOP Entry – 100 Target – 120 Stop Loss – 90
  
• Banco Macro SA attracts deposits and offers retail and commercial banking services. The Bank offers Visa and Amex credit cards, consumer loans, insurance, and other financial services. Bansud operates in Argentina and in the Bahamas through its subsidiary Sun Bank & Trust.
  
• A glimmer of hope for the Argentine economy. Argentina’s GDP grew by 3.9% quarter-on-quarter in the third quarter of 2024, marking the first positive quarterly growth since entering a recession at the end of 2023. The main drivers were increased consumption, a rebound in capital investment, and growth in agricultural and mining product exports. The annual inflation rate dropped to a new low of 166% since December 2023. President Milei’s shock therapy approach, including significant cuts in government spending and deregulation, is showing initial results.
  
• GDP growth is expected to reach 5% in 2025. The World Bank forecasts Argentina’s economy to grow by 5% in 2025, compared to a decline of 3.5% in 2024. In its new economic plan, the Argentine government will implement a 90% reduction in taxes and return tax autonomy to the provinces. On the other hand, Argentina plans to promote monetary competition by allowing the use of different currencies for transactions. One of the major goals for 2025 is to eliminate exchange rate controls.
  
• Plays a significant role in the Argentine banking industry. This bank is the second largest state-owned private bank in Argentina and the sixth largest bank (by deposits and loans). As of the third quarter of 2024, the bank’s total assets amounted to US$147.4bn.
  
• 3Q24 results. The company’s revenue declined by 22.7% to ARS$873.0bn in 3Q24, compared to ARS$1,128.7bn in 3Q23. The company’s net profit saw an increase to ARS$92.0bn in 3Q24, compared to ARS$23.9bn in 3Q23. The company reported an adjusted earnings per share of 143.9ARS in 3Q24, compared to a adjusted earnings per share of 37.39ARS in 3Q23.
  
• Market consensus.
  

(Source: Bloomberg)

Antero Resources Corp. (AR US): Benefitting from the current winter seasonality

• RE-ITERATE BUY Entry – 32.5 Target – 36.5 Stop Loss – 30.5
  
• Antero Resources Corporation explores, develops, and produces oil and natural gas. The Company focuses on the acquisition, development, and production of unconventional oil and liquids-rich natural gas properties. Antero Resources serves customers in the United States.
  
• Rallying Natural Gas prices. US natural gas futures rallied over 60% over the past 2 months. The commodity trimmed gains recently to $3.36/MMBtu following an EIA report showing a smaller-than-expected storage draw of 93 billion cubic feet for the week ending December 20, falling short of the forecasted 99 bcf decline and leaving inventories at 3,529 bcf. Futures found support, however, from colder overnight trends in the European weather model for early January, which had previously anticipated milder conditions compared to the US model. In parallel, natural gas production in the Lower 48 states averaged 103.1 bcf/day in December, while LNG exports are poised to reach a record high of 14.8 bcf/day, driven by robust global demand.
  

Natural Gas spot price

(Source: Bloomberg)

• Seasonality driving demand for natural gas. The winter season has driven up electricity demand as consumers rely on heating to combat the cold weather. This surge in electricity usage has directly increased the demand for natural gas, as reflected in the smaller-than-expected inventory decline, signaling sustained consumption. Forecasts of a January cold front in the U.S. have further elevated expectations for natural gas demand. Meteorologists predict below-average temperatures will sweep into the central and eastern U.S. from January 1-5, intensifying over the following five days. These conditions are expected to provide upward momentum for natural gas prices.
  
• Better outlook of natural gas export permits. President-elect Donald Trump has pledged to accelerate the approval of LNG export permits, reversing a Biden-era pause and paving the way for more lucrative exports compared to domestic gas sales. A new wave of North American liquefied natural gas supply is anticipated to enter the market by 2025. While global LNG prices are forecasted to weaken, U.S. natural gas prices are expected to rise, according to S&P Global Commodity Insights’ 2025 energy outlook, released on December 11. The market also anticipates the Trump administration will approve all pending LNG export projects, potentially enabling final investment decisions in the latter half of 2025.
  
• 3Q24 results. The company’s revenue declined slightly by 6.24% to US$1.06bn in 3Q24, compared to US$1.13bn in 3Q23. The company saw a net loss of US$20.4mn in 3Q24, compared to US$17.8mn net profit in 3Q23. The company reported a basic net loss per share of US$0.16 in 3Q24, compared to a net profit per share of US$0.50 in 3Q23.
  
• Market consensus.
  

(Source: Bloomberg)

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Trading Dashboard Update: Add Bumitama Agri Ltd. (BAL SP) at S$0.86, Lenovo Group Ltd. (992 HK) at HK$10.30. Take profit on East Buy Holding Ltd. (1797 HK) at HK$19.0. Cut loss on Keep Inc. (3650 HK) at HK$5.60, Sands China Ltd. (1928 HK) at HK$20.0, Sunny Optical Technology Group Co Ltd. (2382 HK) at HK$66.0, and Walt Disney Co. (DIS US) at US$110.